Posts Tagged ‘Belgium’

Italy turmoil shows banking ‘doom loop’ still a powerful force

June 5, 2018

National banks exposed but Eurozone lenders also have large sovereign debt holdings

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© FT montage / EPA

Martin Arnold and Judith Evans in London

A clear lesson from last week’s sharp sell-off in Italian bond markets: the “doom loop” that creates a direct link between eurozone countries and their banking systems is still a powerful force.

Within hours of Sergio Mattarella, Italy’s president, causing political palpitations in Rome by blocking the appointment of a Eurosceptic economy minister by populist parties, investors were scurrying to check which banks were most exposed to Italian sovereign bonds.

On Friday, Mr Mattarella approved a government, after the anti-establishment Five Star movement and the far-right Northern League proposed a slate that included a different economy minister.

But the knee-jerk reaction was based on experience. Investors have been burnt before, most recently when Greece flirted with leaving the eurozone in 2015, hobbling its own banking system and inflicting losses on the many foreign banks holding Greek sovereign debt.

“The doom loop still exists,” said Filippo Alloatti, a senior credit analyst at Hermes Investment Management. “The longer there is volatility and a widening of Italian bond market spreads, the more likely there will be a mark-to-market impact on banks, it is almost a given.”

The idea that Italy could vote in a referendum to leave the eurozone and bring back the lira still sounds far-fetched to most investors. But even the faintest chance of such a dire outcome for anyone holding Italian sovereign bonds was enough to prompt Moody’s to put the credit ratings of 12 Italian banks on review for downgrade last week.

The country has one of the highest debt levels in the world at more than 130 per cent of gross domestic product. Its banks are heavily exposed, with Italian sovereign bonds accounting for almost 10 per cent of assets at the country’s lenders at the end of last year, according to the Bank of Italy. This is a higher proportion than most other European countries, even though it has come down in recent years as Italy’s big banks have started to diversify their bond portfolios.

It follows that Italy’s biggest lenders have the highest overall exposure to the country’s sovereign debt: Intesa Sanpaolo had €76bn at the end of 2017 and UniCredit had €54.5bn. In both cases, their exposure exceeded the size of their capital buffers — underlining how much is at stake.

Banca Monte dei Paschi di Siena’s exposure to its own government made up more than 90 per cent of the €21.7bn of sovereign debt held by the recently bailed-out bank at the end of June 2017, according to the European Banking Authority. This explains why shares in Italy’s three biggest banks have all fallen by about a fifth in the past fortnight.

However, the potential impact is wider than the Italian banks. Spanish, Belgian, German and French lenders are also exposed to Italian sovereign debt. Belgium’s Dexia had €22bn of such exposure at the end of last year, a reflection of the state-owned bank’s legacy business of public sector finance. Germany’s Commerzbank had €9bn. In Spain, Banco Sabadell had €10.5bn in June 2017, while BBVA had €9.6bn and Banco Santander had €8.8bn.

France’s BNP Paribas had €9.8bn of Italian sovereign debt at the end of last year, a legacy of its acquisition of Italy’s BNL more than a decade ago. Its French rivals BPCE and Crédit Agricole, which have both invested in Italy, had €8.5bn and €7.6bn of exposure respectively.

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European insurers are also on the hook. Italy’s Generali is the insurer with by far the most exposure to Italian government bonds, according to analysts at Citi: shareholder exposure stands at 92 per cent of tangible book value, compared with between 10 and 13 per cent for Axa, Allianz and Zurich, while Prudential has no exposure, they said.

Despite the extent of Generali’s holdings, a report from Moody’s said the group “has been improving its resilience to a hypothetical scenario of stress on Italian assets in recent years”, in part by diversifying outside Italy. Moody’s noted, however, that Allianz’s Italian division holds about 35 per cent of its investment portfolio in Italian sovereigns, placing the division under review for a potential downgrade.

This broad dispersion of Italian sovereign exposure underlines why last week’s sell-off in banking shares was a Europe-wide phenomenon. Equally, the cost of insuring against default by European banks shot up, as the iTraxx senior financials index produced by Markit rose more than 50 per cent to hit its highest level for more than a year.

The fear of contagion is also fed by memories of how the Lehman Brothers bankruptcy and Greek debt crisis exposed deep links between banks, which fund each other via the interbank wholesale loan market as well as “repo” funding, credit default swaps and derivatives.

There are several other ways the Italian bond market shock has hurt the wider banking sector. As well as increasing funding costs for banks generally, it has also thrown cold water on hopes the European Central Bank could soon raise interest rates from their current negative levels, which has been squeezing bank profit margins.

Italian banks will benefit in the short term from higher yields on sovereign bonds, in which they invest much of their cash from depositors. But the political crisis unfolding in Rome is mostly negative for the banks, particularly as it is likely to stymie the progress they have been making in selling non-performing loans, which still account for more than 10 per cent of their total loan books.

Reflecting this gloomy outlook, it now costs almost €1.40 to insure €100 of five-year senior bonds from UniCredit and Intesa against default — more than double a month ago. However, to put this in context, it remains a fraction of the €10-plus cost of insuring €100 of UniCredit senior debt when the last eurozone crisis peaked in late 2011.

This shows that while investors are worried, they are yet to reach the levels of panic seen in June 2012 when Mario Draghi, president of the ECB, promised to do “whatever it takes to preserve the euro”. Bankers across Europe will be hoping Mr Draghi’s resolve is not seriously tested again.


Belgium: Shooting, stabbing in Liege leaves two police officers and a passer-by dead — Gunman shouted “Allahu Akbar”

May 29, 2018

A stabbing and shooting attack in the eastern Belgian city has left two police officers and a passer-by dead. Authorities have launched a terror investigation but the terror alert level remains unchanged.

A bomb squad arrives at the scene following a shooting in Liege, Belgium on Tuesday. Photo by Michel Tonneau/EPA-EFE

A gunman stabbed and shot dead two police officers before killing a bystander in the eastern city of Liege on Tuesday, Belgian media reported.

The country has been on alert since suicide bombers killed 32 people at Brussels airport and in the subway system in 2016.

Read more: Refugee child dies in Belgium after police chase

What we know so far

  • The attack happened at around 10.30 a.m. local time (08.30 UTC) near a cafe in the Boulevard d’Avroy, located in the administrative district of the city.
  • The attacker, who was armed with a knife, approached the two officers from behind and stabbed them several times, before seizing their weapons and shooting them dead, prosecutors said.
  • He then shot dead a 22-year-old man in a vehicle parked nearby.
  • La Libre Belgique newspaper quoted a police source as saying the gunman shouted Allahu Akbar — God is greatest in Arabic.
  • The shooter then fled to a nearby school where he took a woman hostage.
  • Broadcaster RTBF said the gunman was later shot dead by police.
  • At least two officers were injured in the subsequent shoot-out.
  • The Belga news agency reported that the children from the school were quickly moved to a safe area.

Police and ambulance are seen at the site where a gunman shot dead three people, two of them policemen, before being killed by elite officers, in the eastern Belgian city of Liege on May 29, 2018. (Photo by JOHN THYS/AFP/Getty Images)

Terror probe opened

Terrorism investigators took over the case within two hours of the shooting.

“There are elements that point in the direction that this is a terrorist act,” said Eric Van Der Sypt, spokesman for the Belgian federal prosecutors office.

Belgian Interior Minister Jan Jambon said on Twitter: “Our thoughts are with the victims of this horrible act. We are in the process of establishing an overview of exactly what happened.”

Terror nerves: Belgium remains on edge following several years of extremist Islamist activity, most notably the March 2016 suicide bombings on Brussels airport and a metro station which killed 32 people.

Read more: Belgium charges suspect over 2016 Brussels attacks

Extremist cells, previous shooting

In January 2015, police smashed a terror cell in the town of Verviers that was planning an attack on police. The cell had links to Abdelhamid Abaaoud, the mastermind of the November 2015 Paris attacks.

Liege itself was the scene of a shooting in 2011, when a gunman killed four people and wounded more than 100 others before turning the gun on himself.

mm/rt (AFP, AP, dpa, Reuters)


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In this grab taking from video Tuesday, May 29, 2018, people run in the street after hearing gun shots, in Liege, Belgium. A gunman killed three people, including two police officers, in the Belgian city of Liege on Tuesday, a city official said. Police later killed the attacker, and other officers were wounded in the shooting. (Victor Jay via AP)

BBC News

What happened?

The shooting unfolded late morning on Tuesday near a cafe in the city centre.

Prosecutors said the man followed and attacked police with a knife, before taking a gun from them and opening fire.

He also shot dead a man who was sitting in the passenger seat of a passing car.

The gunman then fled to a nearby school and briefly took a hostage.

A map showing the site of a shooting in Belgium

Footage on social media showed people running to safety as several gunshots rang out. Children at the school were moved to safety.

Belgium’s Prime Minister Charles Michel said he was following the situation closely and expressed his support for those caught up in the shooting.

What’s the wider situation?

Belgium remains on alert after a series of jihadist attacks in the country and in neighbouring France.

A Brussels-based cell was involved in the 2015 Paris attacks which left 130 people dead in several locations.

Brussels itself saw three suicide bombings in March 2016, with 32 people killed. Both the Paris and Brussels attacks were claimed by the Islamic State-group.

Later in 2016 a man attacked two police officers with machetes while shouting “Allahu Akbar” before being shot dead.



Gunman kills three before being shot dead: Belgian police

LIEGE, Belgium (Reuters) – A man killed two policewomen and a woman passer-by in the Belgian city of Liege on Tuesday, public broadcaster RTBF said, before being shot dead in an exchange of fire that sent people scattering and scurrying to take cover.

The city authorities confirmed the death toll.

The national crisis center, on high alert since past attacks by Islamic State in Paris and Brussels, said it was looking into whether terrorism might have been a motive for Tuesday’s attack in Belgium’s third city.

RTBF named the alleged assailant as a 36-year-old Belgian who had been released on parole from a prison near Liege, close to the German and Dutch borders, on Monday.

He was serving time for drug offences and classified as “unstable”, according to RTBF. It remained unclear how the incident, during which pupils at a nearby high school were moved to a place of safety, had unfolded.

“The children in the local schools are safe,” Liege city authorities said on Twitter, adding that apart from the two police officers the passenger in a car had been killed.

RTBF said the man may have attacked the police officers with a box-cutter and then seized one of their weapons.

La Libre Belgique newspaper quoted a police source as saying the gunman shouted “Allahu Akbar” — God is greatest in Arabic — and RTBF said investigators were looking into whether he might have been converted to Islam and radicalized in prison.

“(Terrorism) is one of the questions on the table, but for the moment all scenarios are open,” a spokesman for the crisis center told Reuters.

Federal prosecutors took over the investigation, a further indication that a terrorist motive was possible.

Prime Minister Charles Michel, expressing his condolences to the families of the victims, said it was too early to say what had caused the incident.

RTBF said the attacker had a history of minor criminal convictions but was not on a list of possible violent extremists.

Two other police officers had been injured, a spokeswoman for the Liege public prosecutors office said.

Slideshow (18 Images)

Images on social media showed people scurrying for safety on Liege’s central boulevard d’Avroy with shots and sirens being heard in the background.

Liege, the biggest city in Belgium’s French-speaking Wallonia region, was the scene of a mass shooting in 2011, when a gunman killed four people and wounded more than 100 others before turning the gun on himself.

Belgium has been on high alert since a Brussels-based Islamic State cell was involved in attacks on Paris in 2015 that killed 130 people and Brussels in 2016 in which 32 died.

The Brussels IS cell had links to militants in Verviers, another industrial town close to Liege, where in early 2015 police raided a safe house and killed two men who had returned from fighting with radical Islamists in Syria.

Reporting by Robert-Jan Bartunek, Alissa de Carbonnel and Philip Blenkinsop; Editing by Alastair Macdonald and Richard Balmforth

The race to own Antarctica

May 24, 2018

Competition for natural resources, research and tourism is putting pressure on the cold war-era treaty that guarantees order on the continent

© FT montage / AFP | View of China’s military base in the King George island, in Antarctica.

Leslie Hook in London and Benedict Mander in Buenos Aires

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Antarctica is a continent with no government. The closest thing it has is a drab, 10-person office, with a small sign on its wooden door in Buenos Aires that reads “Secretariat of the Antarctic Treaty”. This is the group whose job it is to keep things running smoothly among the 53 nations that together govern Antarctica.

If that sounds like a quixotic system for a continent twice the size of Australia that contains vast untapped natural resources, it is. But the idealism underpinning it is very clear.

“One of the amazing things is that Antarctica is the only continent where people work together for peace and science,” says Jane Francis, head of the British Antarctic Survey, who last week attended the annual Antarctic Treaty Consultative meeting that brings all of the nations together. “You wouldn’t believe that 53 nations after two weeks can agree . . . It can be done in this world.”

However, not everyone does agree. And at last week’s meeting in the Argentine capital some of those divisions were on show. There is a growing number of issues that the Antarctic Treaty System, which has kept order on the continent for almost six decades, is struggling to deal with. From climate change to fishing, new geopolitical tests are facing Antarctica that are increasingly difficult for a consensus-based group to address.

“One of the things the treaty system needs is almost like a new kind of vision,” says Klaus Dodds, a professor of geopolitics at London’s Royal Holloway University, and an expert on Antarctic governance. “One where parties are explicit about what they are trying to do.”

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China’s base, King George Island, Fildes Bay, Antarctica

The Buenos Aires meeting was typical: it produced a series of agreements that represented relatively low-hanging fruit, such as new rules for drone use, and guidelines for heritage sites (like the hut built by Ernest Shackleton and his team more than 100 years ago).

But the thorniest issues — for example, what happens when countries violate the treaty rules — are almost never addressed. Scientists and diplomats are growing concerned that the existing system will be unable to respond to the new pressures. At stake is the last pristine continent, one that contains the world’s largest store of freshwater, huge potential reserves of oil and gas and the key to understanding how quickly climate change will impact the world through rising sea levels.

“What we are seeing at the moment . . . is almost like a lethargy among the treaty parties to take the necessary steps,” says Daniela Liggett, professor of geography at New Zealand’s University of Canterbury. The last major binding protocol in the treaty system came into force 20 years ago, she adds. Any new protocol must be approved by consensus, so even one dissenting country effectively has veto power.

The greatest areas of tension are those that touch on the growing economic and strategic interests in Antarctica, such as tourism and fishing (mining is banned). Signatories to the treaty, which dates back to 1959, agree to set aside their territorial claims, and use the continent only for peaceful purposes.

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However the growing number of signatories has made the system unwieldy: In 1980 there were just 13 countries that had “consultative” status to make the key decisions on treaty matters — today that number has risen to 29, a diverse group ranging from Finland to Peru, India and Belgium. Meanwhile the number of permanent scientific research stations on the island, a proxy for activity, has grown to more than 75. China has been a particularly enthusiastic builder of new research stations since it joined the treaty in 1983, and the environmental approvals for its latest, a fifth base, have caused division among the treaty members.

“Resources have always been the big trigger,” says Prof Dodds. “Once you get more explicit about resource exploitation, then you raise the troubling issue of who owns Antarctica. That’s the issue that haunts the Antarctic Treaty, and the Treaty System more generally.”

Those anxieties are growing in tandem with Antarctica’s importance. The continent is covered in an ice sheet up to a mile thick and represents a window into how the planet is changing. Temperatures in some parts of Antarctica are rising much faster than the global average, and the pace of glacial melting there will help determine how quickly global sea levels rise in future.

The Southern Ocean, which surrounds Antarctica, is becoming a significant fishing ground, as resources in other seas are depleted. And it plays a crucial role in absorbing heat and carbon from the atmosphere, in ways that are not yet fully understood.

“Things have changed profoundly,” says Damon Stanwell-Smith, a marine biologist who first visited Antarctica more than 25 years ago. “It is visible in a human lifetime — the change in coastal waters, ice, retreat of glaciers, and then the related wildlife movement. Nowhere else has it been so obvious.”

A critical factor is the addition of many more visitors. Mr Stanwell-Smith heads the International Association of Antarctica Tour Operators (Iaato), the closest thing the region has to a tourist police.

The race to understand Antarctica

Last month the association reported that the number of visitors to the region rose to more than 51,000 last season an increase of 17 per cent on the previous year. That number is expected to keep growing. Some 20 new polar expedition vessels are under construction, adding to the 33 already registered with Iaato, to serve the growing interest, says Mr Stanwell-Smith.

For most tourists — who pay between $10,000 and $100,000 for a trip — visiting Antarctica involves stepping off the boat at just a handful of highly regulated landing sites. But there are loopholes in the system, such as private yachts that flout permitting rules, as well as a growing number of tours that involve activities such as kayaking or skiing.

“It’s becoming a bit of an adventure playground, and the trouble is the unregulated tourism,” says Prof Francis, at the British Antarctic Survey. “It has become much easier for people just to sail their yachts to Antarctica, to fly their private aircraft to Antarctica.”

The fastest-growing source of new visitors last year was China, which was second only to the US in the ranking of total tourists. At the same time Beijing is investing heavily in polar missions to Antarctica, part of its plan to become a “polar great power” — moves that have not always been welcome. One idea that has been met with concern is China’s proposal for a special “code of conduct” that would apply for a large area around its Kunlun Station research base, which has been seen as an attempt by China to limit activities near its base.

The construction of China’s fifth research base has also been controversial because preliminary building activities were started before the environmental impact assessment was complete, in violation of protocol. The lack of punishment for these — and similar infractions by other countries — is one of the weaknesses of the treaty system.

China spends more on its Antarctic research programme than any other country, according to Anne-Marie Brady, professor of political science at the University of Canterbury and editor of The Polar Journal. China’s interest is not limited to the potential natural resources available, but also the continent’s strategic importance — having a ground station near the South Pole can increase the accuracy of global satellite navigation systems.

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The US, Russia and China all have critical infrastructure in Antarctica to aid their global positioning systems. “That makes Antarctica very, very interesting right now,” says Prof Brady. She adds that the Antarctic Treaty System may be poorly equipped to respond to a growing “clash of values” in the region.

“There is a lot that is unresolved [in the treaty] and may not be fit for purpose for our current global strategic environment,” she says. “If the Antarctic Treaty is going to be sustainable, there has to be more high-level attention paid by government on how to adjust to the changing environment and how to protect Antarctica.”

The Chinese Arctic and Antarctic Administration declined a request for an interview.

China and other countries are positioning themselves for a day when the current confines of the Antarctic Treaty System may no longer apply. While it does not technically expire, the provisions on the treaty that ban mining could change after 2048 — the year in which the environment protocol is expected to come up for review.

As the number of signatories has expanded it means there will be far more voices involved in any potential review. “What role do these countries [not among the 12 original signatories of the 1959 treaty] intend on playing? For sure, they have one eye focused on the resources that might be available in the future,” says Máximo Gowland, Argentina’s director for Antarctic foreign policy.

He points out that both water and mineral resources could become an issue. “You don’t know how quickly the situation might evolve,” he says, mentioning the severe water shortages in Cape Town, where the idea of towing an iceberg from Antarctica to South Africa, to ease the crisis, was discussed.

Already the treaty system is struggling to protect resources in the Southern Ocean, where fishing for krill is on the rise. Opposition from China and Russia has repeatedly delayed the creation of new marine protected areas, a topic that will be discussed again at the next meeting in October.

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Princess Elisabeth Antarctica Research Station

Another unresolved issue is bio-prospecting — taking biological samples from Antarctica to study in a lab. Because the species that exist in Antarctica are adapted to extreme cold conditions, they could contain compounds with valuable commercial or pharmaceutical applications. Yet the question of who owns the intellectual property from these samples is impossible to solve, because of the many and varied sovereign claims on the continent.

While there is no indication that anyone is about to take the step of quitting the Treaty System, there is equally little hope that it will be able to reform itself. A risk is that it simply becomes less relevant as it fails to address the challenges facing the continent, says Prof Liggett.

Evan Bloom, the top polar diplomat in the US, which sends the largest number of scientists and tourists to Antarctica each year, says Washington supports the treaty system despite its limitations. “It has worked quite well in terms of setting aside those political differences, and allowing science to occur,” he says.

How much longer that continues to be the case will rely on a fragile treaty that is about to face its greatest tests.

‘Limited friction’: Tradition of co-operation endures on the continent 

The Antarctic Treaty, signed in 1959 at the height of the cold war, was focused on denuclearising the continent and avoiding military conflict, and the 12 original signatories all agreed to set aside any territorial claims there for the duration of the treaty. Subsequent agreements addressed issues like fishing rights and extraction of resources (which is banned), creating a group of deals called the Antarctic Treaty System.

“There are these aspects of the Antarctic Treaty that were unquestionably pioneering,” says Prof Dodds, who describes the treaty as an experiment in human governance.

Eight years after it was signed, it was used as a loose model for the Outer Space Treaty, and is still seen as a template for how to govern areas that fall outside of traditional national boundaries. Today diplomats wonder if it could be a model for the Arctic region, where climate change has opened up new shipping routes and created new sources of tension.

Evan Bloom, the head of the US Office of Oceans and Polar Affairs, says that many of the geopolitical tensions in the rest of the world are filtered out in Antarctica. Everyone who endures the South Pole’s harsh climate has to rely on their neighbours to survive.

“Those frictions are relatively limited in part because the tradition of co-operation in Antarctica flows from the way that the science programmes relate to each other,” he says. “If you are running a science camp or a research station in a remote place, you have a real incentive to work with other nearby stations, regardless of their nationality.”

Mr Bloom says occasionally his colleagues at the US state department will ask him whether similar models could be applied in other parts of the world. “Middle East peace negotiators come and say, this Antarctic Treaty System has worked out really well, is there something we can apply,” he says with a laugh.


Iran turns to diplomacy amid high regional tensions

May 11, 2018

Iran’s foreign minister will embark on a diplomatic tour to try to salvage the nuclear deal amid high tensions following the US withdrawal and global fears over reports of unprecedented clashes with Israel in Syria.

© AFP / by Eric Randolph | Map of Syria locating the main Israeli strikes on Thursday, the Iranian presence and the rocket attacks attributed to Iran by Israel.


Iran’s Foreign Minister Mohammad Javad Zarif will leave late Saturday for visits to Beijing, Moscow and Brussels, a spokesman said Friday, holding meetings with all five of the remaining parties to the 2015 nuclear deal.

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Iran appeared determined not to be drawn into a wider regional conflict with Israel during the sensitive negotiations.

That is despite Israel’s claims that it struck dozens of Iranian targets inside Syria early on Thursday as part of “Operation House of Cards”.

Israeli Defence Minister Minister Avigdor Lieberman urged Syrian President Bashar al-Assad to “throw the Iranians out” from his country.

Israel said the strikes were in response to a missile volley fired from southern Syria by Iran’s Al-Quds force, that struck the occupied Golan Heights without causing casualties.

But Iran flatly denied the Israeli version of events on Friday, saying Israel’s attacks were carried out on false “pretexts”.

“The repeated attacks by the Zionist regime on Syrian territory were carried out under pretexts that were invented by themselves and are without foundation,” said foreign ministry spokesman Bahram Ghasemi, without offering further details.

Iran must tread a delicate line as it seeks to show resolve against Trump and the Israeli strikes without alienating the European partners it needs to salvage something from the nuclear deal.

Zarif will hold high-pressure talks with the other parties to the deal, first in Beijing and Moscow, and then with his counterparts from Britain, France and Germany in Brussels on Tuesday.

All five have condemned Trump’s move to walk out of the deal and reimpose crippling sanctions, but European companies in particular will be highly vulnerable to economic pressure from Washington.

France still hopes for a wider settlement that will cover Iran’s activities across the Middle East, and warned Tehran on Thursday “against any temptation for regional dominance”.

President Hassan Rouhani told German Chancellor Angela Merkel in a telephone call late Thursday that he did not want “new tensions” in the Middle East.

– Fog of war –

Southern Syria was quiet but tense early Friday, with monitors saying that Syrian, Iranian and allied Lebanese forces from Hezbollah were still on high alert.

The Israeli raids had prompted concern that Iran could activate its powerful ally Hezbollah to retaliate from its positions in southern Lebanon, opening up a deadly new front in the conflict.

It remained unclear exactly what had happened between Syria and Israel in the early hours of Thursday.

A conflict monitor said Israel’s strikes had killed 23 fighters.

Iranian analysts said Israel had struck first, and that any retaliation was the work of the Syrian military, not Iran.

“The Israelis want to make this into an Iran-Israel thing, but it isn’t. Whatever happens in Syria happens under the command of the Syrians,” said analyst Mohammad Marandi, who was part of Iran’s negotiation team leading up to the nuclear deal.

Analysts say Israel feels it has a green light from Washington to move more aggressively against Iran’s presence in Syria, particularly after Trump’s withdrawal from the nuclear deal.

Iran has said it will stay in the deal only if the remaining members — Britain, France, Germany, China and Russia — can provide solid guarantees that its trade benefits will continue in spite of renewed US sanctions.

Russia — which is alone in having close relations with both Iran and Israel — has sought to position itself as a mediator to prevent all-out war.

Its foreign minister Sergei Lavrov said “all issues should be solved through dialogue” and that it had warned Israel to avoid “all actions that could be seen as provocative”.

However, one analyst at London’s Chatham House, Yossi Mekelberg, told AFP the strikes on Iranian targets “were likely undertaken with tacit Russian approval”.

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“Russia is not happy with Iran gaining too much power, too much influence there,” he said.

Israel’s Haaretz newspaper reported that intelligence officials briefed ministers on Thursday and told them another clash with Iran in Syria was unlikely after the intensity of the strikes the night before.

But the paper also warned in an editorial: “It would be better not to get caught up now in the self-assured arrogant spiral evident in the reactions in some television studios, at the Knesset and on social media… Tehran could nevertheless roll out its heavier weapon, Hezbollah, in which case the conflict could take on an entirely different scope.”


China is Iran’s biggest trading partner.


See also:

Russia seeks to mediate between Iran, Israel

Anbang Insurance Founder’s Stunning Fall Ends With 18-Year Prison Term

May 10, 2018

Shanghai No. 1 Intermediate People’s Court also fined Wu $1.65 billion

Anbang’s Wu Xiaohui in Beijing last year.
Anbang’s Wu Xiaohui in Beijing last year. PHOTO: THOMAS PETER/REUTERS

Disgraced Chinese insurance magnate Wu Xiaohui was sentenced to 18 years in prison on Thursday after being convicted of fraud and abuse of power connected with the meteoric rise of the company he founded, Anbang Insurance Group Co.

The penalties handed down by Shanghai No. 1 Intermediate People’s Court, which included a confiscation of 10.5 billion yuan ($1.65 billion) in assets, followed a one-day trial of Mr. Wu in late March. The 18-year jail term combines a 15 year sentence for fraud—including illegal fundraising—and 10 years for abuse of power stemming from Mr. Wu’s efforts to mask how he controlled Anbang, the court said.

The jail term is one of the lengthiest given to a fallen private business executive in China. It also caps a dramatic reversal in fortunes for Anbang, which was seized by government regulators earlier this year following an overseas acquisition spree that saw it snap up the Waldorf Astoria hotel in New York and other overseas luxury properties. Regulators have described Anbang’s blazing expansion as a potential systemic risk to the country’s financial system.

Mr. Wu, 51 years old, expressed remorse and asked for leniency during his trial, according to a summary published by the court in March. But Mr. Wu also pushed back against the prosecution by saying Anbang’s growth strategies weren’t unique in the industry. He also expressed doubt that he violated laws.

It isn’t clear if Mr. Wu appeared or made a statement during the Thursday sentencing. A lawyer for Mr. Wu couldn’t be reached.

In its sentencing statement, the court said Mr. Wu instructed other people to falsify documents and he personally pocketed some premiums from Anbang’s insurance products, according to China’s official Xinhua News Agency. The sentence also suggested Anbang abused its mandate as an insurer by selling what were essentially short-term, high-yielding investment products, estimating costs to the nation of about $10.2 billion.

The Waldorf Astoria hotel in New York early last year.
The Waldorf Astoria hotel in New York early last year. PHOTO: KATHY WILLENS/ASSOCIATED PRESS

In early April, Anbang said it would receive a capital injection of nearly $9.7 billion from an industry rescue fund to keep the company solvent and help stabilize its operations. Chinese authorities have said they plan to oversee Anbang’s operations for at least a year while it seeks new investors, and they intend for the company to remain a private insurer.

In a statement Thursday, Anbang said Mr. Wu was previously removed from the firm and that under government supervision its operations “remain stable.” It added that it has sufficient cash flow to fulfill its commitments to all customers “and ensure that the legitimate rights of policyholders are effectively protected.”

In fewer than two decades starting in the early 2000s, Mr. Wu built Anbang from a small regional car insurer into the country’s third-largest insurer by assets. Mr. Wu’s employees described him as hands-on as the company designed new investment options for younger people and marketed the products nationwide using the internet. As its premium income soared, Anbang plowed funds into building a global financial services brand by buying weak insurers in South Korea and the Netherlands and a bank in Belgium. Mr. Wu spoke of making the businesses tech savvy and responsive to a fast-changing global financial sector.

But Anbang captured international attention with its purchases of trophy hotel and property assets in the U.S. and elsewhere, including its $2 billion splurge on the Waldorf in 2015.

This week, an Anbang spokesman said the firm has no plans to shed overseas assets, but the company has been speaking with bankers in the wake of the government takeover so they can have “a better understanding of the situation of the value” of the holdings.

Chinese authorities, with increasing doubts about economic growth and a continuing buildup of debt, have recently been redoubling efforts reduce risks in the nation’s financial sector. Mr. Wu is the first tycoon to be formally prosecuted in this push.

Mr. Wu’s trial started without notice in March about nine months after he disappeared last summer, raising questions about the fates of other high-profile Chinese executives whose whereabouts aren’t known and are widely believed to be under investigation by Chinese authorities.

Xiao Jianhua of bank holding company Tomorrow Group, for instance, hasn’t been seen since early 2017. He hasn’t made a statement. More recently, oil-focused conglomerate CEFC China Energy Co.’s Ye Jianming also disappeared with no statement.

The challenges aren’t confined to private businesspeople. Last month, the Communist Party unveiled an investigation into possible graft by the chairman of the country’s largest state-owned debt restructuring company, Lai Xiaomin of China Huarong Asset Management Co.

Write to James T. Areddy at and Stella Yifan Xie at

Appeared in the May 10, 2018, print edition as ‘China Sentences Tycoon To Prison.’

Paris attacks suspect Salah Abdeslam convicted of attempted murder in Brussels shootout

April 23, 2018

The sole surviving member of the Islamic State of Iraq and Syria (ISIS) cell behind the 2015 Paris extremist attacks, who was once Europe’s most wanted fugitive, was found guilty Monday of attempted terrorist murder.

By Lizzie Dearden

The Independent

Paris attacks suspect Salah Abdeslam has been convicted of attempted murder over a shoot-out with police in Belgium.

The 27-year-old is allegedly among the only surviving members of an Isis cell that murdered 130 victims in Paris in 2015, fleeing the city to his hometown of Brussels.

Four months later, police investigating a terrorist safe house in the city were met with a hail of gunfire and killed one militant, before finding Abdeslam’s fingerprints and other clues that led them to a hideout nearby.

Abdeslam was charged with opening fire on police in the gun battle and with involvement in the Paris attacks, and has been imprisoned in northern France.

Paris Attacks Suspect Leaves French Prison To Stand Trial In Brussels: Source

Salah Abdeslam, Paris attacker

He attended the opening day of his trial in February but later refused to answer questions.

Court president Luc Hennart said he and accomplice Sofiane Ayari, who admitted fighting for Isis in Syria, chose not to attend the reading of the verdict and sentencine,

“Their presence was not mandatory,” he added. “If they had wished to be present they could have been there, but they decided not to be present.”

November 13, 2015: ISIS militants killed 130 people in France's worst atrocity since World War II

November 13, 2015: ISIS militants killed 130 people in France’s worst atrocity since World War II

Federal prosecutors are seeking 20-year prison sentences for both men for attempted murder with a terrorist connection.

It is unclear when Abdeslam will face trial over the Paris attacks, while several other suspected terrorists have been imprisoned for links with the massacres and bombings in Brussels.

Abdeslam became the world’s most wanted terrorist when he allegedly fled Isis’ massacres on 13 November 2015, calling friends to drive him back to Belgium after his own brother blew himself up at a restaurant.

He passed through police checkpoints unhindered and disappeared with the suspected help of accomplices linked to the criminal underworld, where he was formerly known as a drug dealer and thief.

The trail went cold until March 2016, when Belgian and French police stormed what they believed was an empty terrorist safe house in the Brussels district of Forest.

But they were met by a hail of bullets and Algerian Isis militant Mohamed Belkaid was shot dead as two suspects fled across surrounding rooftops.

A search of the flat resulted in the recovery of Abdeslam’s fingerprints on a glass, convincing authorities that he was still in Brussels, and the renewed search led police to his hideout just metres from his former home in Molenbeek.

November 2015 Paris attacks

See also:

Verdict delivered against sole surviving Paris attacks suspect


Belgium takes back Brussels’ Grand Mosque from Saudi government — reports it promotes radicalism

March 16, 2018


BRUSSELS (Reuters) – Belgium is taking back control of the Grand Mosque of Brussels by terminating Saudi Arabia’s lease of the building with immediate effect over concerns it promotes radicalism, the government said on Friday.

 Image result for Grand Mosque in Brussels, photos

FILE PHOTO: View of the Grand Mosque in Brussels, Belgium, October 3, 2017. REUTERS/Francois Lenoir/File Photo

The announcement is Belgium’s first official confirmation of the move which comes after months of behind the scenes diplomacy to prevent any fall-out with Saudi Arabia, as reported by Reuters in February.

Concerns over Brussels’ biggest mosque, located near the European Union’s headquarters, surfaced after Islamist militants who plotted their assault in Brussels killed 130 people in Paris in 2015, and 32 in the Belgian capital in 2016.

 Image result for Grand Mosque in Brussels, photos

Friday’s decision breaks Saudi Arabia’s unusual 99-year, rent free use of the building, the government said.

“The concession will be terminated immediately … in order to put an end to foreign interference in the way Islam is taught in Belgium,” the Belgian government said in a statement.

Belgium leased the Grand Mosque to Riyadh in 1969, giving Saudi-backed imams access to a growing Muslim immigrant community, mostly from Morocco and Turkey, in return for cheaper oil for its industry.

It has been run by the Mecca-based Muslim World League (MWL), a missionary society mainly funded by Saudi Arabia. The MWL denies it espouses violence.

Belgian Interior Minister Jan Jambon tweeted of Friday’s announcement that “in this way we are tackling Salafist, violent extremist influences.”

Riyadh’s quick acceptance of Brussels’ request to relinquish the lease reflects a new readiness by the kingdom to promote a more moderate form of Islam – one of the more ambitious promises made by Crown Prince Mohammed bin Salman under plans to transform Saudi Arabia and reduce its reliance on oil.

The handover of the mosque coincides with a new Saudi initiative, not publicly announced but described to Reuters by Western officials, to end support for mosques and religious schools abroad blamed for spreading radical ideas.

Justice Minister Koen Geens said the sprawling complex will instead house the offices of the Muslim Executive of Belgium, an official body which represents Muslim communities across the country.

The mosque will have to register as a place of worship, he said.

Geens and other Belgian leaders couched the move as a way to promote a “European Islam” better aligned with their values – a familiar refrain across Europe following recent Islamic State attacks.

“From now on, the mosque will have to establish a lasting relation with the Belgian authorities, while respecting the laws and the traditions of our country, which convey a tolerant vision of Islam,” Geens said.

In what he decribed as a way to promote more “diversity and tran

EU tells Poland time running out to restore rule of law

February 27, 2018


BRUSSELS (Reuters) – Western EU states told Poland on Tuesday that time was running out for it to address concerns in a dispute over democratic freedoms, but held off from further action as a deadline for a response from Warsaw approaches.

Thousands of protesters took to the streets across Poland urging Duda to exercise his veto [Reuters]Thousands of protesters took to the streets in Poland last year

In a long-running and bruising clash, the executive European Commission has accused Poland’s nationalist Law and Justice (PiS) party of undermining the rule of law with reforms to the judiciary and state media since taking power in late 2015.

After repeatedly declining to backtrack on its judicial reforms, Warsaw has now sat down to negotiations as paralell talks on the bloc’s next joint budget starting in 2021 get under way.

EU ministers held their third debate on the matter in Brussels on Tuesday, with Germany and France warning Poland against using discussions with the Commission as a smokescreen.

“The clock is ticking. The European Commission and a series of EU members are very concerned about the rule of law situation, particularly the independence of the judiciary,” said Michael Roth, Germany’s minister for EU affairs.

“In recent days I have noticed positive signals of willingness (from Poland) to engage in dialogue. That’s an important point, but at the end it’s not about promises but concrete acts,” Roth told reporters.

Image may contain: 1 person, suit

Jaroslaw Kaczynski

Brussels has recommended that the bloc launch an unprecedented Article 7 punitive procedure against Warsaw – which could lead to suspending Poland’s voting rights in the EU – unless it concedes ground by March 20.


Poland’s Deputy Foreign Minister Konrad Szymanski said Warsaw would soon publish an explanation of some 13 laws PiS has passed on the court system to demonstrate to other EU states it acted to rid Poland of the vestiges of communist rule.

“We expect member states to make their own assessment of this situation and really consider whether there is any serious risk of a serious breach of the rule of law. In our view, there is no such serious risk,” he said.

The Commission and the bloc’s founding members – which include the Netherlands, Belgium, Luxembourg and Italy as well as France and Germany – say the PiS measures risk undermining the EU’s internal market and judicial cooperation.

“The need for reform of the judiciary can never be an excuse to enhance political control over the judiciary. The judiciary should be independent. The separation of powers is a fundamental principle,” Commission deputy head Frans Timmermans said.

Timmermans said he would assess the new Polish document when it comes to see whether it was promising enough to continue talks, or else ask EU states to take action against Warsaw.

Stripping Poland of its voting rights is highly unlikely to occur because it would require unanimity, and Hungary’s Prime Minister Viktor Orban has promised to block any such action against his Polish ally.

But the dispute could badly hurt Poland if other member states move to cut vital funding in the looming budget talks. Poland is currently the biggest beneficiary of the EU budget.

Senior Polish officials have hinted Warsaw could tweak some of the new judiciary laws, though details have yet to be agreed.

The ministerial session on Tuesday ran for longer than planned, suggesting a lively discussion. Some of Poland’s fellow ex-communist neighbors said the Commission should not push Warsaw too hard.

“Today is no time for decisions,” said Deputy Prime Minister Ekaterina Zakharieva of Bulgaria, which holds the EU’s rotating presidency, adding that Poland’s willingness to enter again into talks with Brussels represented “huge progress”.

German patients turn to Croatia for organ donations — “One life came to an end and helped save another one.”

January 31, 2018

The number of people willing to donate organs in Germany has hit an all-time low. Patients in the country are increasingly dependent on a European cross-border organ exchange program.

Organ transplant surgery (picture-alliance/epa/B. Mohai)

Yasmin Redjepagic will never forget the sunny autumn afternoon in 2010 when her father died. “He had a stroke,” she said. “It happened very fast. He was only 65 years old. Our family was shocked; it was so sudden, so unexpected. It just came out of the blue.”

While Yasmin’s family was mourning his death, she got a phone call from the hospital in Zagreb where her father had been treated. The doctors there asked if they could remove healthy organs from the deceased. Yasmin’s father was registered as a potential organ donor. The family asked for some time to think it over and shortly afterwards, they consented.

“Our parents always thought that it was better to save the lives of other people than to let the organs be wasted,” Yasmin said. “All of our family members are potential organ donors. We have spoken about it often.”

Croatia‘s donor network

Yasmin’s family members are reflective of a growing trend. While the number of potential donors has been dropping drastically in Germany for years now, more and more Croatians are willing to donate organs. Nikola Zgrablic, the president of the Croatian Donor Network (HDM), says that German patients are reaping the benefits of changing habits in Croatia.

“In 2017, we had 132 donors whose organs were actually removed,” he said. “We have more than 30 organ donations per 1 million inhabitants. This makes Croatia one of the most successful of the eight countries in the Eurotransplant Foundation, which allocates donated organs.”

Screenshot HDM Croatia ( patients in Germany benefit from organ transplants through Croatia’s donor network, the HDM

Croatia’s organ donor program is based on an opt-out arrangement. That means every citizen can theoretically become an organ donor if they have not explicitly stated their refusal to do so before they die. In Germany, however, citizens 16 years of age and older must register their decision to donate organs.

The Spanish system

At just 9.3 organ donations per 1 million inhabitants, Germany has one of the lowest percentages of actual organ donations in Europe. Spain lead worldwide with 46.9 donors per 1 million inhabitants in 2017.

“Croatia has practically copied the Spanish system,” Zgrablic told DW. “What is extremely important is the fact that the transplantation managers, meaning the key figures in the organ donor system, are all doctors who work in hospitals.”

This means doctors work locally. They can identify and register potential donors, train staff and provide support to family members.

“Donating an organ is a humane, dignified deed,” said Yasmin. “However, we must not forget that it involves a tragedy, the death of a family member. It is not merely a bureaucratic process, but also a deeply moral issue. People need the support and empathy of medical professionals. That is what helped us in these sorrowful circumstances.”

Heart transplant (picture-alliance/dpa/B. Wüstneck)Germany has one of the lowest percentages of organ donation in Europe

Her father’s organs were removed in the middle of the night. The doctor in charge of the procedure called the next morning to thank the family and tell them it was over.

“That gesture moved us deeply,” Yasmin said. “After the shock and endless grief over the premature loss of my father, I felt that we had done something good. One life came to an end and helped save another one.”

Government support for donor system

The Croatian organ donor system has been kept alive by dedicated doctors like Nikola Zgrablic. In recent years, the government has also been helping the organ donor system with more funding, supportive legislation and infrastructure.

Germany benefits greatly from the willingness of other countries to donate organs. In 2017, as in past years, German hospitals received hearts, livers and kidneys from Eurotransplant — around 200 organs from Belgium, the Netherlands, Croatia, Hungary, Austria and Slovenia reached Germany through the network.

According to the German Organ Transplantation Foundation (DSO), around 10 thousand seriously ill people nationwide are on a waiting list for organ donations. On average, three of them die every day because a suitable organ is not available on time.

Palestinians search for alternatives to US-led peace process

January 29, 2018

A Palestinian student from the Balata refugee camp near Nablus in the Israeli occupied West Bank protests against the reduction of the services of the UN agency and against US president’s decision to cut aid, on Sunday. (AFP)
AMMAN: Palestinian President Mahmoud Abbas has triggered a frantic search for a new strategy toward ending Israeli occupation and establishing a Palestinian state.
During the Palestine Central Council meeting earlier this month, Abbas angrily declared that US-brokered negotiations were over after President Donald Trump recognized Jerusalem as Israel’s capital.
Abbas’ two-hour speech in front of the 80-member council was followed by a boycott of the visiting US Vice President Mike Pence.
The Palestinian leadership has triggered the pursuit of a more even-handed mechanism to handle negotiations with Israel.
Hani Al-Masri, a Ramallah-based Palestinian analyst, described Abbas’ speech as having delved “deep into history, passed quickly over the present, and largely — almost totally — ignored the future.”
But Abbas did give some hints about possible options ahead.
Palestinians have long claimed the talks were biased in favor of Israel and Abbas called for any further discussion to be brokered by an international committee.
He also said they would pursue Israel at the International Criminal Court for war crimes, encourage popular resistance and continue to work with Israeli peace activists.
International sponsors
Abbas dispatched emissaries to Russia and China soon after Trump broke with decades of US policy with his Jerusalem declaration last month.
But the focus of Palestinian diplomatic strategy has been on Europe where the hope is that Brussels can provide balance to the pro-Israel US role.
Abbas visited Belgium last week and urged European countries to respond by recognizing the state of Palestine with its capital in East Jerusalem. But the plea was met with a muted response.
Slovenia’s foreign minister said he hoped his country would later this year become the 10th European nation to recognize Palestine. Sweden is the only country to have recognized Palestine while being part of the EU. Countries like the Czech Republic and Hungary did so before joining the bloc. Ireland, Portugal, Luxemburg and Belgium are debating whether to follow suit.
While the EU assured Abbas of its commitment to a two-state solution with Jerusalem as a shared capital, there was little support during his visit for his call to immediately recognize the Palestinian state, Reuters reported.
The EU is the biggest donor of aid to Palestinians but it is also the largest trade partner with Israel.
In a meeting in Washington on Wednesday, the head of Palestine’s mission to the US, Husam Zomlot told a delegation of European diplomats that the issue is no longer one of the negotiations but of implementation.
“The time is ripe for the activation of the international community led by Europe to take a lead role in a peace implementation process that is based on international law,” he said.
While efforts in Brussels and other international moves will continue, it is not expected that this alone will lead to significant progress in the near future.
Non-violent resistance
For many Palestinians, the only realistic and possible alternative to US-led peace talks is what Abbas referred to as “peaceful popular resistance.”
The Palestinian president praised the tactics deployed during the first intifada, which started in 1987, and made it clear that he abhors violence.
Mubarak Awad the founder of the International Center for Nonviolence told Arab News that peaceful resistance must be a dedicated strategy, not a short-term tactic.
“We are requesting many groups, organization, colleges, universities, and churches to boycott, divest and sanction Israel yet we eat Israeli products.”
He suggested that Palestine begin forming local communities to take care of people in preparation for an economic struggle against Israel that will inevitably lead to a cut in the Palestinian budget.
“Local bodies need to organize, prepare and help their members to be prepared for the cost and sacrifice that will come with the struggle for freedom and independence. They need to work towards bringing unity and self-reliance.”
At the present time, Awad and others are aware that neither Abbas nor most of his Fatah movement are capable of leading a physically demanding national non-violent campaign.
The majority of Fatah activists are deeply embroiled in the Palestinian government and most of its leaders are over 65.
Awad also suggested that Palestinians should consider using a different currency than the Israeli Shekel, such as the Jordanian dinar, Egyptian pound, or create a Palestinian currency.
There is also the challenge of political apathy among Palestinian parties and factions, especially in Gaza where living conditions are the worst and people feel they have been pawns in the hands of local and regional powers and ideologies.