Posts Tagged ‘Portugal’

Scientific study finds asylum seekers boosting European economies

June 21, 2018

Asylum seekers moving to Europe have raised their adopted nations’ economic output, lowered unemployment and not placed a burden on public finances, scientists said on Wednesday.

An analysis of economic and migration data for the last three decades found asylum seekers added to gross domestic products and boosted net tax revenues by as much as 1 percent, said a study published in Science Advances by French economists.

Image result for europe, asylum seekers, photos

The findings come amid a rise of anti-immigrant sentiment across Europe, where immigration peaked in 2015 with the arrival of more than a million refugees and migrants from the Middle East and Africa.

An annual report by the United Nations High Commissioner for Refugees released on Tuesday showed the global number of refugees grew by a record 2.9 million in 2017 to 25.4 million.

The research from 1985 to 2015 looked at asylum seekers – migrants who demonstrate a fear of persecution in their homeland in order to be resettled in a new country.

“The cliché that international migration is associated with economic ‘burden’ can be dispelled,” wrote the scientists from the French National Center for Scientific Research, the University of Clermont-Auvergne and Paris-Nanterre University.

Image result for europe, asylum seekers, photos

The research analyzed data from Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Norway, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.

Asylum seekers contributed most to a country’s gross domestic product after three to seven years, the research found. They marginally lowered unemployment rates and had a near-zero impact of public finances, it said.

Greece, where the bulk of migrants fleeing civil war in Syria have entered Europe, was not included because fiscal data before 1990 was unavailable, it said.

Chad Sparber, an associate professor of economics at the U.S.-based Colgate University, said the study was a reminder there is no convincing economic case against humanitarian migration.

But he warned against dismissing the views of residents who might personally feel a negative consequence of immigration.

“There are people who do lose or suffer,” he told the Thomson Reuters Foundation.

“Immigration on balance is good,” he said. “But I still recognize that it’s not true for every person.”

Reporting by Sebastien Malo @sebastienmalo, Editing by Ellen Wulfhorst Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights, climate change and resilience. Visit news.trust.org

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Global conflict continues to rise, index shows

June 6, 2018

The world has become less peaceful over the last 10 years, mostly due to conflicts in the Middle East and Africa. An international index paints a dark picture, although with some brighter spots.

    
A Palestinian protester during a protest near the Gaza Strip border with Israel (picture alliance/AP Photo/K. Hamra)

Europe was the most peaceful region in the world in 2017, while the Middle East and North Africa were the least peaceful, the Institute for Economics and Peace (IEP), said in its 12th annual report published in London on Wednesday.

“There is an ongoing deterioration in global peace,” Steve Killelea, head of the Australia-based IEP, told DW. “It’s gradual and it’s been going on for the last decade.”

The conflicts in the Middle East and North Africa and the spillover effects into other areas have been the main drivers in the decline of global peace, Killelea said.

Map of how countries ranked in Global Peace Index

The IEP’s Global Peace Index (GPI) found that in 92 nations peacefulness fell in 2017, with improvements in only 71 countries. Killelea told DW this negative trend has continued for the fourth year in a row.

According to the GPI, the Middle East and North Africa region is the least peaceful region in the world. At the bottom of the 163-state ranking are Syria, with Afghanistan, South Sudan, Iraq and Somalia not far ahead.

Read more: UN appeals for record $22.2 billion in global humanitarian aid

Emerging Sub-Saharan Africa improving

The biggest positive changes in GPI in 2017 were in sub-Saharan Africa. The Gambia, for example, rose 35 places, the biggest improvement in the index. Liberia, Burundi and Senegal were also among the five countries with the largest improvements.

Western Europe falling in the index

Of the nine global regions, the IEP identified Europe as the world’s most peaceful. Of the five most peaceful countries in the world, all are in Europe: Iceland, Austria, Portugal and Denmark. Germany is in 17th place.

“But 23 of the 36 countries classified as Europe deteriorated in peace in 2017,” Killelea said, mainly in western Europe, with eastern Europe improved overall.

Infographic of changes in GPI scores

Global economy loses

Analysing data from think tanks, research institutes, governments and universities, the IEP calculaed that violence cost the global economy $14.8 trillion in 2017, that is almost $2,000 (€1,650) per person.

If the least peaceful countries, including Syria, South Sudan and Iraq, were as stable as the most peaceful — Iceland and New Zealand — it would add an extra $2,000 per head to their economies, according to the IEP study, which Killelea said was the only research that measures the economic impact of violence.

“For every 1 percent improvement in positive peace, GDP per capita income goes up by 1.8 percent,” Killelea said.

More countries invest less in armaments

Although Europe is under pressure from the US administration to increase defense spending, the global trend in military spending is downward, Killelea said. “Over the past decade, 104 countries have cut their defense spending relative to economic output and 115 countries have reduced their military personnel,” he said.

However, a look at the past 10 years also reveals that the intensity of the conflicts has increased significantly. “The death toll on the world’s battlefields has increased 246 percent, and the death toll from terrorism has increased 203 percent over the past decade,” Killelea said.

A Palestinian protester throws back a tear gas canister fired by Israeli security forces in clashes in March (picture alliance/ZUMAPRESS/W. Hashlamoun)A Palestinian protester throws back a tear gas canister fired by Israeli security forces in clashes in March

New criteria: Peace not just the absence of war

The GPI is calculated on the basis of 23 indicators in three areas: security in society, ongoing conflicts, and militarization.

In the field of security in society, the IEP looks at the murder rate, the number of people in prison, the number of police officers and also perceptions of crime. The area of militarization includes the number of soldiers, the military spending in relation to economic output and also possible arms exports.

The report methodology also introduced the category positive peace for the first time this year. This treats peace not only as the absence of conflict and war. but takes into account structures, social factors and institutions that contribute to the peacefulness of societies.

http://www.dw.com/en/global-conflict-continues-to-rise-index-shows/a-44090159

Portuguese Lessons for Spain and Italy

June 4, 2018

Investors worried when Portugal’s Socialist Party took office in 2015, but that government has proved a model of fiscal rectitude

Pedro Sánchez, leader of the Spanish Socialist Party, left, applauds during a parliamentary vote to oust Prime Minister Mariana Rajoy on Friday. Mr. Sánchez became the new prime minister.
Pedro Sánchez, leader of the Spanish Socialist Party, left, applauds during a parliamentary vote to oust Prime Minister Mariana Rajoy on Friday. Mr. Sánchez became the new prime minister. PHOTO: ANGEL NAVARRETE/BLOOMBERG NEWS

The European Union got two new governments last week. Neither looks stable. Both are backed by unlikely coalitions from opposite ends of the political spectrum, raising questions about their direction of travel.

The new Italian government combines the right-wing, anti-immigrant, euroskeptic League and the antiestablishment 5 Star Movement, whose main campaign promise was a budget-busting universal basic income.

The new Spanish Socialist government commands just 86 seats out of 350 in the Spanish Parliament and was propelled into office by a coalition of no less than 25 political parties ranging from the European Union Podemos to Catalan separatist parties and a right-wing Basque nationalist party.

At first glance, both developments look like a recipe for deepening economic uncertainty in two of the eurozone’s largest economies.

Yet it need not be this way. The EU has been here before. When Portugal’s current minority Socialist Party government took office in November 2015 backed by three radical left-wing parties, including the Communist Party, its arrival was greeted with similar nervousness in Europe’s chancelleries and the financial markets. During the new government’s first year, Portugal’s 10-year bond yield nearly doubled to above 4% amid fears that the government would pursue reckless fiscal policies and unwind past reforms, putting the sustainability of Portugal’s vast government debt in question.

Yet Portugal under António Costa has proved a model of fiscal rectitude, while making tough decisions to clean up the banking system. As a result, Portugal has regained investment-grade credit ratings and bond yields are back below 2%. Indeed, Portuguese finance minister Mário Centeno is now leads the eurozone as president of the Eurogroup.

Spain’s new prime minister has been clear that Portugal’s example is one that he intends to emulate. Pedro Sánchez pulled off a remarkable political feat in gathering such disparate political groups to bring down former Prime Minister Mariano Rajoy in a parliamentary vote of no confidence—but what made it especially impressive was that he did it without making extravagant promises to other parties. Instead, he pledged to stick with Mr. Rajoy’s proposed budget, currently in its final stages in parliament. This not only reassured the markets but was key to securing the support of the Basque Nationalists, who risked losing generous funding if Mr. Sánchez’s bid failed because parliament might then have insisted on a snap election and a new budget.

Of course, Mr. Sánchez’s government will still be weak. He won’t need to pass another budget until the end of next year, but he is unlikely to be able to pass any substantial legislation with the current parliament. His instinct will be to avoid calling elections until next year to give him a chance to build support, allies say. But to improve his party’s position, he needs support both from the left-wing Podemos and the center-right Ciudadanos. He is likely to try to woo left-wing voters by reversing some of the previous conservative government’s restrictions on civil liberties, but labor and product-market reforms that have helped fuel five years of robust growth will likely remain intact. He won’t do anything to destabilize financial markets or undermine his reputation as a pro-European centrist.

True, a Portuguese-style outcome is much harder to foresee in Italy. The coalition has dropped some of the more contentious proposals in earlier versions of its government program including demands for debt relief. And partly in response to pressure from the League’s Northern Italian business supporters, the coalition has handed the key finance and foreign ministries to well-regarded technocrats. But it is still pledged to introduce tax cuts and new welfare spending which, according to some estimates, could amount to 6% of gross domestic product. The new government also has promised to unwind changes to the pensions system and labor-market rules.

Sticking to those plans is bound to lead to a confrontation with Brussels and the financial markets. The biggest risk lies in downgrades to Italy’s credit rating that would raise questions about its long-term debt sustainability. Moody’s has already put Italy on review for a possible downgrade from Baa2, which is just two notches above junk status.

Even so, the new Italian government would hardly be the first to arrive in Brussels intent on confrontation, only to moderate its policies as the complexities of European politics become clear. After all, the current Greek government engaged in a costly six-month standoff with Brussels in 2015 but is now regarded—at least in Brussels—as a reliable partner. The current Polish government is trying to defuse a row with Brussels over its judicial reforms that threatens to overshadow its wider European interests, not least over the future EU budget. Even the U.K., which is negotiating its exit from the EU, finds itself trying to preserve as much as possible of its economic and security relationship.

Italy has broader interests in areas such as security and migration that point to the need for a more cooperative EU relationship. Besides, both coalition partners were elected because they promised to bring jobs and growth, not choke the recovery and plunge Italy into a financial crisis. They are the masters now—and they know that if they don’t deliver, they may not remain masters for long.

Write to Simon Nixon at simon.nixon@wsj.com

https://www.wsj.com/articles/portuguese-lessons-for-spain-and-italy-1528084860

What to Make of Italy’s Astonishing Bond Selloff — Are investors are complacent about the dangers Italy poses

May 30, 2018

Much of Italy’s debt is domestically owned, but the sheer size of Italy’s debt pile means a default would be catastrophic both for its own and Europe’s banks.

Italian two-year bonds had by far their worst day since at least 1989.
Italian two-year bonds had by far their worst day since at least 1989. PHOTO: PIAGGESI/FOTOGRAMMA/ROPI/ZUMA PRESS

Market reporting is prone to hyperbole, but Tuesday’s Italian bond selloff was truly astonishing. Short-dated bonds that can usually be treated as a close proxy for cash turned toxic, and bondholders showed serious panic. Prices fell and yields on short-dated bonds rose as much or more than when the euro was fighting for survival in 2011 and 2012.

The reaction in other markets was muted by comparison. Sure, stocks and the flakier end of European government bonds sold off, and there was a flight to the safety of U.S. Treasurys. But this wasn’t much more than a run-of-the-mill bad day. Portugal’s 2-year bond yield rose 0.23 percentage point and Spain’s was up 0.12 percentage point, both their worst day since early last year. The 10-year U.S. Treasury had its best day in almost two years amid a flight to safety.

By contrast, Italian 2-year bonds had by far their worst day since at least 1989, when Thomson Reuters data starts. The yield leapt more than 1.5 percentage points to 2.4% at the close of European hours, with more selling later.

There are three possible interpretations for why markets outside Italy haven’t sold off more. The first is fundamental: Europe’s weak economies have been transformed since they were threatened by contagion from Greece in the last euro crisis. Ireland is now regarded as a safe “core” country, Spain is growing fast and even Portugal has taken the medicine. Perhaps this time round the trouble can be contained.

Mamma Mia, Here We Go AgainItaly’s 2-year bond had its biggest one-day rise in yield in decades.Source: Thomson Reuters
.Percentage points2000’02’04’06’08’10’12’14’16’18’20-1.25-1.00-0.75-0.50-0.250.000.250.500.751.001.251.501.75

The second is technical: The lack of significant contagion is because investors elsewhere regard the Italian move as overdone, the result of hedge funds and others piling in to sell bonds in a market that became suddenly illiquid. Buyers stayed on the sidelines because a market that has overshot can always overshoot even further in the short run, but the bond yield isn’t a reflection of the real risks to Italy.

The third is the most troubling. Perhaps investors are complacent about the dangers Italy poses, relying on the European elite to once again come up with a way to keep truculent crowd-pleasing politicians under control, as they have so often in the past decade.

Italian bonds are cheaper (have a higher yield) because of the fear that the country will re-denominate its euro bonds into devalued lira, default on them, or both, just as it was for Greece in 2011. Greece, of course, went on to default on its bonds and briefly use capital controls to suspend convertibility of its euros into the euros used in the rest of the region, while no other country followed suit.

It is true that Europe’s weak countries—bar Italy—aren’t as weak as they were in the last crisis. Banks have been recapitalized or restructured, competitiveness improved and current account deficits turned into surpluses. Ireland, Portugal and Spain are all far stronger than they were. Italy, meanwhile, has bumbled along; as Capital Economics’ Chairman Roger Bootle points out, every other country in the region except Italy has become more competitive against Germany since 2011.

Further, Europe has a habit of doing the impossible at the last minute, offering both fiscal and eventually monetary bailouts during the last crisis despite them having previously been deemed impossible and possibly illegal.

Still, it is hard to see how the single currency could survive an Italian exit without other countries following it out the door. The country is the third-biggest borrower in the world, with €2 trillion ($2.33 trillion) of bonds and bills outstanding. Much of its debt is domestically owned, but the sheer size of Italy’s debt pile means a default would be catastrophic both for its own and Europe’s banks. It would also create political fractures that could threaten the European Union, ironic for an organization founded by the Treaty of Rome.

Economic chaos in Italy after a devaluation would be all but guaranteed, and surely hurt growth in the rest of Europe – although such chaos might persuade reluctant euro members that the pain of staying is worthwhile. Even worse from the point of view of markets would be if Italian euro exit went well, encouraging anti-Europeans in other countries to push for a repeat.

More convincing is the idea that Italy’s bond market is exaggerating the panic because it has become so hard to trade. The gap between the yield at which people were willing to buy and sell on the 2-year bond was exceptionally wide at 0.46 percentage point, according to Tradeweb, backing up the idea that liquidity had evaporated. As one hedge-fund manager shorting Italian bonds put it, there has been a “buyer’s strike” because foreigners were unwilling to buy, while domestic investors were scaling back holdings.

The problem with the technical explanation based on liquidity is that it could go either way. If buyers return and the yield falls, all well and good. But often in markets the first panicked move turns out to be right, after a period of consolidation. If the speculators are correct about the danger of the newly installed technocratic government rapidly being replaced by anti-EU populists, bond yields this high or higher might well be justified. That will be the true test of contagion.

Write to James Mackintosh at James.Mackintosh@wsj.com

https://www.wsj.com/articles/what-to-make-of-italys-astonishing-bond-selloff-1527663600

China Three Gorges launches €9bn bid for Portugal utility EDP — would be one of biggest Chinese deals in Europe

May 12, 2018
All-cash offer for full control would be one of biggest Chinese deals in Europe

Image may contain: one or more people, people standing, sky and outdoor
Capital flows: CTG, which takes its name from the Three Gorges dam on the Yangtze river, is one of several companies investing in Europe © AFP

Andrew Ward and Arash Massoudi in London and Peter Wise in Lisbon 


China Three Gorges has launched a €9bn offer to take full control of EDP, the Portuguese utility, in what would be one of the biggest Chinese takeovers of a European company.

The all-cash tender offer for the 76.7 per cent of EDP that CTG does not already own would value each share at €3.26, a 5.5 per cent premium to Thursday’s closing price of €3.09 and 17.9 per cent above the average for the past six months.

It would value the whole group at €11.8bn, or about €25.6bn including net debt. EDP had no immediate comment on the offer.

The proposed deal would add to the wave of Chinese capital which has poured into debt-laden economies of southern Europe since the financial crisis and give state-owned CTG control of energy infrastructure across the Iberian peninsula and the Americas.

It is sure to attract political scrutiny not only in Portugal, where EDP is the country’s dominant generator and distributor of electricity, but also in the US, where it has a growing portfolio of wind and solar assets.

The deal would require approval from the Committee on Foreign Investment in the US (Cfius), providing a test of Washington’s attitude to Chinese dealmaking at a time of trade tensions between the Trump administration and Beijing.

CTG’s existing 23.3 per cent stake stems from a €2.7bn deal with the Portuguese government in 2011 that completed the privatisation of EDP in the wake of the country’s bailout by the EU and the IMF.

EDP has been the subject of speculation about potential takeover interest over the past year © Reuters
People involved in the deal said CTG, which takes its name from the Three Gorges hydroelectric dam which it operates on China’s Yangtze river, wanted to use EDP as a platform for further international expansion in renewable power.

Europe’s power sector has seen an increasing tempo of dealmaking over recent months, including a multibillion-euro asset swap between German utilities Eon and RWE in March, as utilities adapt to the rapid shift from fossil fuels to cleaner forms of energy.

EDP has itself been the subject of speculation about potential takeover interest from Gas Natural of Spain and Engie of France over the past year.

Lu Chun, chairman of CTG, said the company was “strongly committed to preserving EDP’s Portuguese identity, with headquarters in Lisbon and status as a public listed company in the Lisbon stock exchange”.

The offer was conditional on CTG reaching a minimum acceptance of 50 per cent plus one share of EDP’s voting rights. Upon completion, CTG would be obliged to launch a mandatory offer for the 17 per cent of shares in EDP Renováveis, the Portuguese company’s listed renewables subsidiary, not controlled by the parent.

People involved in the deal said CTG was hopeful of political support in Portugal after a successful six-year partnership during which EDP’s finances have stabilised. About half of the company’s 12,000-strong workforce is in Portugal.

Other Chinese investments in Portugal since the financial crisis included the acquisition of a 25 per cent stake in the national power grid operator, Redes Energéticas Nacionais, by State Grid Corporation of China. Fosun, the Chinese conglomerate, has bought stakes in Millennium BCP, Portugal’s largest bank, and Fidelidade, its largest insurer.

Similar deals across Europe have prompted a push by Germany, France and Italy to create a more rigorous EU screening process for foreign takeovers, akin to the Cfius system in the US.

António Costa, Portugal’s Socialist prime minister, said on Friday night that the Lisbon government had “no reservations to raise” on the bid. Mr Costa has in the past voiced opposition to EU curbs on Chinese investment, which accounted for 45 per cent of the €9.2bn raised from Portuguese state privatisations in the three years to the end of 2011.

The Lisbon government has previously maintained powers to block unwelcome bids for national utilities. But the previous centre-right government abolished its “golden shares” in EDP and Portugal Telecom after signing its bailout agreement in May 2011.

EDP on Thursday posted a fall in first-quarter net profit of 23 per cent to €166m. The company had 26.8 gigawatts of installed generating capacity around the world, almost three-quarters of it in renewable power.

Nearly 60 per cent of its earnings came from Portugal and Spain, with a further 19 per cent from Brazil and 16 per cent North America.

CTG is being advised by Bank of America.

https://www.ft.com/content/63b807d8-5538-11e8-b3ee-41e0209208ec

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.
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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.
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Abbas’ two-hour speech in front of the 80-member council was followed by a boycott of the visiting US Vice President Mike Pence.
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The Palestinian leadership has triggered the pursuit of a more even-handed mechanism to handle negotiations with Israel.
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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.”
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But Abbas did give some hints about possible options ahead.
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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.
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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.
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International sponsors
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Abbas dispatched emissaries to Russia and China soon after Trump broke with decades of US policy with his Jerusalem declaration last month.
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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.
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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.
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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.
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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.
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The EU is the biggest donor of aid to Palestinians but it is also the largest trade partner with Israel.
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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.
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“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.
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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.
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Non-violent resistance
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For many Palestinians, the only realistic and possible alternative to US-led peace talks is what Abbas referred to as “peaceful popular resistance.”
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The Palestinian president praised the tactics deployed during the first intifada, which started in 1987, and made it clear that he abhors violence.
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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.
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“We are requesting many groups, organization, colleges, universities, and churches to boycott, divest and sanction Israel yet we eat Israeli products.”
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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.
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“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.”
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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.
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The majority of Fatah activists are deeply embroiled in the Palestinian government and most of its leaders are over 65.
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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.
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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.

New year jitters for bond markets as ECB cuts back stimulus

January 2, 2018

There were New Year jitters for the bond markets as the ECB cut back on stimulus. (AFP)
LONDON: Borrowing costs across the euro area shot higher on Tuesday as a cut in monthly ECB asset purchases became a reality, with hawkish comments from a top official and strong data hurting sentiment toward bonds on the first trading day of the year.
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Bonds from the bloc’s periphery, the biggest beneficiaries of European Central Bank stimulus, bore the brunt of the selling. Yields in Italy, Spain and Portugal rose 6-10 basis points each, widening the gap over German peers.
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But even “core” or top-rated bond markets were left unscathed from the selling pressure, with Germany’s 10-year bond yield hitting two-month highs.
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Benoit Coeure, the Frenchman in charge of carrying out the ECB’s bond purchases, sees “a reasonable chance” the 2.55 trillion euro stimulus program will not be extended again when it expires in September, he told a Chinese financial magazine at the weekend.
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The comments highlight that the days of extraordinary monetary stimulus are nearing an end given stronger economic conditions and signs of a pick-up in inflation.
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Data on Friday showed inflation in Germany, Europe’s biggest economy, hit its highest level in five years in 2017. A survey on Tuesday showed euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades.
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ECB monthly bond purchases, which have long underpinned bond yields, have fallen to 30 billion euros from 60 billion euros.
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That cut in purchases from the start of January, unveiled in October, comes just as investors brace for a hefty month of supply — a potentially powerful headwind for bond markets.
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Spain said on Tuesday it will issue bonds worth between 3.5 billion euros and 5 billion euros at a scheduled auction on Thursday.
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“While the cut in ECB asset purchases is not a surprise, there is some uncertainty as to how the markets will adjust to this in an unusually heavy month for supply,” said Rainer Guntermann, a rates strategist at Commerzbank in Frankfurt.
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“The more hawkish commentary from the ECB is also weighing on markets.”
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Germany’s 10-year bond yields rose 2.5 basis points to 0.46 percent, the highest since late October. German 30-year bond yields jumped almost 5 bps to 1.31 percent , their highest since mid-November, before dropping to 1.24 percent by late trading.
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In Italy, where borrowing costs rose last week after the president called a general election for March 4, 10-year bond yields extended their rise to a two-month high above 2 percent, going up nearly 10 bps by the afternoon.
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That pushed that gap over German equivalents to around 165 bps, its widest since Oct. 19. Spanish and Portuguese bond spreads also widened against Germany in a sign that investors were reducing their exposure to southern European bond markets.
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“The widening in peripheral spreads shows that the market is concluding that the recent spread tightening is inconsistent with a more hawkish ECB,” said Peter Chatwell, head of rates strategy at Mizuho.
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Analysts said Portuguese five-year bonds were also coming under pressure from expectations of a syndicated bond deal of this maturity next week.
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Most other euro zone bond yields were up 2-4 basis points, with trade subdued after Monday’s New Year’s holiday. There was also some caution ahead of the implementation on Jan. 3 of the wide-ranging EU financial markets directive known as MiFID II.

Portugal Asks for Help From Europe to Fight Fires — Thousands of firemen currently engaged — Portugal’s worst fire disaster in memory

August 13, 2017

LISBON — More than 3,000 firemen struggled to put out forest fires across Portugal on Sunday, after the country requested assistance from Europe to fight blazes that threaten to spread with more hot weather in the coming days.

Exceptionally dry and hot weather ignited Portugal’s worst fire disaster in memory early this summer, killing 64 people, and fires have continued to flare up in recent weeks with the arrival of each new hotter spell of weather.

Interior Minister Constanca Urbana de Sousa said the country sent the request for help to Europe late on Saturday because of concerns that high temperatures and high winds in the coming days could increase the number of fires.

Firefighters in June tried to bring a fire under control in a valley near Góis, Portugal. Credit Tyler Hicks/The New York Times

The minister said the request was carried out “because of a question of prudence” due to the weather forecast for coming days, according to news agency Lusa. It covered requests for firefighting airplanes and firemen and is part of a European mechanism for cooperation to fight fires.

Emergency services said 268 fires broke out on Saturday, the highest number for any single day this year, with 6,500 firemen fighting to put them out. There are fears that many of them could flare up again later on Sunday, with higher winds and temperatures that hit in the afternoon.

The central district of Coimbra adopted a local state of emergency to deal with fires, as did four smaller municipalities in the region.

While fires have burned through the summer none has had the tragic impact of the one in late June, as emergency services have gone to far greater efforts to evacuate villages and shut roads early in affected areas.

But the country could face many more weeks of fires before the end of summer.

More than 140,000 hectares of forest have burned this summer in Portugal, more than three times higher than the average over the last 10 years, according to European Union data.

(Reporting By Axel Bugge; Editing by Greg Mahlich)

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Portugal Forest Fires Worsen, Fed by Poor Choices and Inaction

Portugal is likely to see more massive forest fires

June 19, 2017

AFP

© AFP / by Laurence COUSTAL | Heat waves have become more frequent in Portugal, say experts

PARIS (AFP) – Highly exposed to global warming’s climate-altering impacts, Portugal is likely to see more massive forest fires such as the one — still raging — that has killed at least 60 people this weekend, experts say.- Why Portugal, why now? –

The Iberian peninsula encompassing Portugal and Spain is experiencing a warmer, drier June than usual, explains Thomas Curt, a researcher at France’s Irstea climate and agriculture research institute.

Added to that, the country has vast expanses of highly inflammable plants, including forests of pine and eucalyptus trees.

“Hotter air is synonymous with drier and more inflammable vegetation,” said Curt. “The more the mercury climbs, so does the risk of fires and their intensity.”

Temperatures in the region have warmed by more than the global average over the past half century, according to a 2014 review of climate change impacts on Portugal.

Heat waves have become more frequent, and annual rainfall slightly less, said the review published in the journal WIREs Climate Change.

More frequent and pronounced heat waves are expected in future, accompanied by a “substantial increase” in fire risk — “both in severity and in length of the fire season,” it said.

– Does global warming boost forest fire risk? –

“It is certain — we are experiencing a rise in temperatures,” said Curt.

The Northern hemisphere summer has lengthened over the past 50 years from July-to-August, to June-to-October now — meaning a longer fire risk season.

There has been an increase in major fires of more than 100 hectares, and so-called “megafires” of more than 1,000 hectares, the researcher added.

“It is truly a growing problem everywhere in the world, and notably in Mediterranean Europe.”

These mega blazes remain rare — only about 2-3 percent of all fires — but are responsible for about three-quarters of all surface burnt.

“Many analyses of climate change show that these major fires will become more and more likely,” said Curt.

– What to do? –

In the short term, reinforce firefighting capacity, deploy patrols, set up watchtowers to raise the alarm, and ban fire-making everywhere.

Over the longer term, human settlements and green areas will need to be substantially redesigned, experts say.

Some forest will have to be cut back, undergrowth cleared, and residential areas moved further from scrubland and forest borders, to reduce the risk to life and property.

“The focus of efforts should shift from combating forest fires as they arise to preventing them from existing, through responsible long-term forest management,” green group WWF said.

“Responsible forest management is more effective and financially more efficient than financing the giant firefighting mechanisms that are employed every year.”

In the yet longer term, added Curt, “of course, we need to curtail global warming itself.”

by Laurence COUSTAL

Deadly wildfires around the world

June 18, 2017

AFP

© AFP | One of Australia’s worst wildfires killed around 173 people in 2009

PARIS (AFP) – Portuguese firefighters kept up the battle Sunday after one of the worst wildfire disasters in recent history killed at least 62 people.Here is a rundown of some of the deadliest wildfires around the world over the past two centuries.

– Australia –

In February 2009, at least 173 people die in brush fires in the south east, notably in the state of Victoria where entire towns and more than 2,000 houses are destroyed. The fires lasts several weeks before being contained by thousands of firemen and volunteers. It is one of the worst fires ever recorded in Australia.

– China –

In May 1987, the deadliest forest fire in recent Chinese history kills 119 in the northeast of the country, injuring 102 and leaving 51,000 homeless.

– France –

In August 1949, in the southwest Landes region, 82 rescue workers are killed. The victims — firemen, volunteers and soldiers — are caught in a ball of fire after the winds suddenly changed direction.

– Greece –

In 2007, 77 people die at the end of August in unprecedented forest fires that ravaged 250,000 hectares (2,500 square kilometres) in the southern Peloponnese and the island of Evia, northeast of Athens. The fires are the worst recorded in Greece in recent years.

– Portugal –

In June 2017, a fire roars through Portugal’s central Leiria region, killing at least 62 people and injuring over 50 more.

In 1966, a fire in the forest of Sintra, west of Lisbon, kills 25 soldiers fighting the blaze.

– Russia –

Around 60 people die between July and August 2010 as fires rage in over a million hectares of forest, bogs and brushwood, burning entire villages in the western part of the country during an unprecedented heatwave and drought.

– United States –

Likely the country’s deadliest, a wildfire struck Peshtigo, Wisconsin in October 1871, killing between 800 and 1,200 people. The fire had been burning for several days before it ripped into the forested village with a population of 1,700, destroying it in a matter of hours. It also damaged 16 other villages and destroyed 500,000 hectares of land.

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