How Wall Street investors react to a possible default is crucial because they’re the ones who finance the country’s enormous debt by buying the securities that Treasury sells to fund the government. If they shy away from the market, interest rates could skyrocket, squeezing the government, businesses and consumers.
That’s why their level of confidence can serve as the strongest force to drive Washington partisans to make a deal.
For most of this year, many on Wall Street assumed that lessons learned from the 2011 crisis — including voters furious over declines in their retirement accounts as stocks plunged — would prevent such an event from happening again. That faith is starting to fade.
“Debt ceiling negotiations are essentially nowhere,” Brian Gardner, chief Washington policy strategist at investment bank Stifel, wrote in a note to clients. Gardner added that while a last-minute deal could certainly emerge, “the GOP’s narrow majority and the Speaker’s tenuous political position make the pathway to an agreement more uncertain than usual.”
To be clear, it’s nowhere near all-out panic. The government has until the summer to strike a deal, when the Treasury Department is likely to run out of room to keep paying the nation’s bills and servicing its existing debt.
But signs of stress are piling up, especially after House Speaker Kevin McCarthy came to the New York Stock Exchange on April 17 to make the GOP case that any hike in the borrowing limit must come with significant spending cuts. That’s something the White House and congressional Democrats say they won’t consider.
The shift from general nonchalance to rising concern can be seen in an obscure corner of the markets: the soaring cost of insuring against exposure to U.S. debt through instruments called credit default swaps, which mitigate risk for large holders of Treasury securities.
The cost of insuring against a U.S. default rose to its highest level in over a decade on Thursday as JPMorgan analysts said there was a “non-trivial risk” of at least a technical default on the government’s debt in which the nation runs out of borrowing ability for even a short period before a deal is reached.
Darrell Cronk, chief investment officer of Wells Fargo’s wealth and investment management division, said his biggest worry is that the “X-Date” — the moment when emergency moves to forestall default are exhausted — gets pulled forward to early-to-mid June with 2022 tax receipts likely weak after a brutal year for markets.
Goldman Sachs researchers said they also expect a much shorter timeline due to a steep reduction in capital gains revenue. And McCarthy’s hardline position — as well as questions about whether he can unify House Republicans over any strategy at all — have amped up alarms. “People seem to be dug in a little bit more in the trenches,” Cronk said.
Some bank executives said they are growing more concerned about the state of play in Washington but remain unsure how to inject themselves into the debate. Speaking out would be unlikely to sway hard-line conservatives, they fear, given that such calls would probably be dismissed as special pleading by rich Wall Streeters.
So for now, they are mostly issuing anodyne statements arguing for the importance of not allowing the U.S. to default, in a bid to nudge the two sides toward a solution.
Following McCarthy’s address, congressional Republicans urged bankers to press Biden to engage with the GOP.
“Obviously, people [on Wall Street] are worried,” Sen. J.D. Vance of Ohio said in an interview. “We’ll just say, ‘Look, it’s a two-party system. And Kevin McCarthy gets to make the first shot across the bow, but they need to put pressure on Joe Biden, to the extent they’re able to, to actually come to the negotiating table.’”
Rep. Warren Davidson of Ohio said he’s telling bankers that “the only way that we’re going to not default later is if we start taking corrective action now.”
“Joe Biden’s plan is to not take corrective action now,” said Davidson, a member of the House Freedom Caucus. “That’s a nonstarter. We’re not going to move his ‘no action now’ bill,” he said, referring to Democrats’ hopes of passing a “clean” debt limit hike with no spending cuts.
Democrats expressed frustration that the financial world hasn’t exerted more pressure on Republicans.
“Wall Street and business need to start getting energized and put pressure on Republicans to do what we’ve done all these years, which is pay for the debt that we incurred and not hold the American people hostage,” said Rep. Pramila Jayapal of Washington, who chairs the Congressional Progressive Caucus.
Senate Banking Chair Sherrod Brown (D-Ohio) said he was confident Wall Street would eventually speak up. “But I think that it’s telling that McCarthy went to Wall Street to talk about all this because he’s Wall Street’s guy,” Brown added. “So we’ll see.”
Meanwhile, concerns over the impact that a nasty fight over the debt limit could have on the economy are showing up on bank earnings calls.
Goldman CEO David Solomon identified uncertainty over the debt limit as a potential source of volatility during the bank’s call on Tuesday. An hour earlier, responding to a question from POLITICO, Bank of America CFO Alastair Borthwick told reporters he didn’t have much to say on the status of non-existent negotiations between the White House and McCarthy.
“Obviously, we’re all hoping that gets resolved successfully,” he added.
Citi CEO Jane Fraser said her bank believes it’s “now more likely that the U.S. will enter into a shallow recession” later this year. “The biggest unknown,” she told analysts on the bank’s recent earnings call, is “how the debt ceiling plays out.”
BlackRock Vice Chair Philipp Hildebrand warned at the Bloomberg New Economy Gateway Europe Forum on Thursday that default would undermine “a basic anchor” of the world’s financial system and “must not happen.”
“All we can do is to pray that everyone in the United States understands how important the sanctity of the sovereign signature of the leading currency, of the leading bond market, of the leading economy in the world is,” Hildebrand said.
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( With inputs from : www.politico.com )
“The president and the White House have failed this city,” he said, adding that a less-than-punctual state budget is only adding to the stresses.
He indicated he wants the federal government to grant Temporary Protected Status to asylum seekers so they can receive work permits because the city is currently experiencing a “black market” of workers without them.
“A substantial number of them, I believe, are being exploited, are being mistreated,” he said.
In a statement, the White House said it hopes to work with the city on its needs: “FEMA is also providing assistance to support the city as it receives migrants and will announce additional funding for receiving cities like New York City in the coming weeks, but we need Congress to provide the funds and resources we’ve requested to fix our long-broken immigration system.”
The White House also called on Congress to “reform and modernize” immigration laws so asylum seekers can get work permits, saying it has tried various administrative measures to help them.
At City Hall, it was quite the political split screen: A couple hundred feet away members of the Progressive Caucus chastised the mayor’s proposed budget cuts (which he has insisted be referred to as “efficiencies”). In the most recent round a few weeks ago, his administration asked most city agencies to cut their staffs for the upcoming fiscal year by 4 percent.
The caucus, which butts heads with the mayor routinely — even more so than the typically critical City Council — is calling for $4 billion in affordable housing funding and $350 million toward “right to counsel” services for those who cannot afford an attorney. They demanded more dollars to be earmarked to shore up mental health and education services, too.
“He is defunding everything we need to keep us safe,” said Council Member Alexa Avilés, who has defined his administration’s priorities largely through a public safety lens. The caucus lost more than a dozen of its members earlier this year amid an internal brawl over whether to defund the NYPD.
The City Council released its official response to the mayor’s budget a few weeks ago, claiming the city would make billions more this fiscal year and the next than it had originally projected.
Adams called those projections “false reporting” and said the inability of local officials to get on the same page has contributed to the federal government’s feet-dragging.
“Running your mouth is not running a city,” Adams said of his critics.
The mayor, who is in negotiations with the Council, must release his next budget proposal by April 26 — though uncertainty in Albany could muddy that timeline, too. New York City Comptroller Brad Lander, who also echoed Adams’ calls to expand temporary protected status, said a commitment in the state budget to pay a third of the costs promised by Gov. Kathy Hochul “has yet to materialize.”
Asked Wednesday about the state helping the city with the cost of the asylum seekers, Senate Majority Leader Andrea Stewart-Cousins said it would be a priority in ongoing budget talks.
“I know that members of my conference are very, very interested in making sure that we are helpful in this process,” she told reporters. “It’s not something that we’re spending a lot of time talking about, but there is a consensus that we do have to be helpful.”
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( With inputs from : www.politico.com )
SRINAGAR: National Conference General Secretary Ali Muhammad Sagar on Tuesday said that people in Kashmir are grappling with one of the worst power crises in years and that the government claims have fallen flat.
While expressing dismay over the failure of the government in rising upto the expectations of the people, Sagar said, “People across the valley are complaining of unscheduled power cuts throughout days especially during Sehri and Iftar times. Before the onset of the holy month, the government had made tall promises about ensuring steady supply of electricity to consumers. It was claimed that enduring uninterrupted power supply during Sehri and Iftar will be a priority by the Power Development Department (PDD).”
Power bills have gone up from Rs 700 to Rs 1100 but the scenario of electricity hasn’t changed, Sagar rued adding, “Most of the city areas were reeling under darkness even during the Shab-e-Qadr observance. Had the government told people to brace for prolonged power cuts, they would have made up their mind for the predicaments. For the past one week the scenario has taken an ugly turn with the outages touching 12 hours a day. The situation in upper reaches and far-flung areas is much worse. This is the everyday story now. There are frequent power cuts throughout the day and night. Situation is the same in both metered as well as non-metered areas. It is unfortunate that the electricity is unavailable when people need it the most. All the tall claims of the government have fallen flat.” (GNS)
PARIS — French President Emmanuel Macron drew a connection between his country’s pension reform and Europe’s independence from other countries, during a televised address Monday evening.
“We are a people who intend to control and choose our destiny, who do not want to depend on anyone, neither on the forces of speculation, nor on foreign powers, nor on wills other than our own, and we are right,” Macron said during the 15-minute speech.
The French head of state’s TV appearance was the first time he has addressed the nation since he signed his contentious pension reform — which raises the retirement age from 62 to 64 — into law amid a prolonged political and social crisis.
The president’s reference to independence from “foreign powers” echoed controversial comments he made earlier this month in an interview with POLITICO and French daily Les Echos. On his way back from China, the French president created a stir by saying Europe should avoid being the United States’ follower — including on the matter of Taiwan’s security.
“One cannot declare its independence: It is built through ambitions, efforts at the national and European level, in terms of knowledge, research, attractiveness, technology, industry, defense. And it is also financed collectively through work,” Macron said Monday.
European and French independence, he added, is what will “allow us to obtain more justice” and decrease inequalities.
The bill was greenlit by the country’s top constitutional court on Friday, crushing hopes of opposition parties and unions that the reform could still be stopped.
The French president, who faces the prospect of a gridlocked parliament, said his government would focus on labor, law and justice, and “progress” in the coming months, with Prime Minister Elisabeth Borne expected to present a more detailed roadmap next week.
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( With inputs from : www.politico.eu )
With a huge network of colleges and a lot of enrolment, the students are dissatisfied with the pace and process of the education they get, reports Babra Wani
Girl students of a college in Srinagar enjoying the sunshine on the premises of the college. KL Image: Bilal Bahadur
With her eyes glued to her mobile, Saima (name changed) is watching a lecture on Scaler and Vector quantities. With the uncertainty of the presence of teachers in her school looming large, she has been preparing for her upcoming examination virtually.
A student of Government Degree College, Kangan, Saima prefers not to attend the college where she is enrolled for BSc. She stopped going to her college because of the “lack of permanent staff for her subjects.” The deficit was managed by contractual lecturers, who leave the college when their contracts expire. “I mean if we talk about the present, we have no teachers there and our exams are about to begin in a month,” she said.
The lack of permanent teachers and staff is not a one-college problem but a pan-higher education issue in Kashmir. It literally triggered a sort of a “scandal” when a college principal formally ordered teachers from unrelated subjects to “engage” students in absence of the relevant faculty.
Karnah Story
Just like Saima, Zahra (name changed) is concerned and worried about the lack of teachers. A fifth-semester BA student at Government Degree College Tanghdar, Zahra recalls how she was a happy girl when she passed her higher secondary examinations just to get admission to the college. The excitement, however, soon went down as she realised the harsh realities.
“Living in a remote area was already challenging enough,” Zahra said. “We already knew that our college will not provide us with the facilities but we never knew that our issues will never be even heard.”
For her, the lack of permanent staff is her biggest concern. “Due to staff issues, we suffer from a lot of academic loss as we are not able to cover the whole syllabus and hence rely completely on self-study to prepare for examinations,” Zahra said. “Ours is a remote area so if we students face any problems here, they are rarely addressed.”
Located some 67 km north of Srinagar, beyond the Sadhna Pass, Tanghdar(Karnah) is located literally on the line of control (LOC). The area remains closed for most of the winter and there are cases when the authorities had to retain the dead in mortuaries till the road opened. The college, established in 2008 has more than 700 students on its rolls. This load is being managed by seven permanent teachers and three contractual teachers!
The Tulail Story
For 20 years old Adnan (name changed) walking for five kilometres to reach the college seems to be a daily routine. In 2019, when he and his friends heard about the establishment of a degree college, they were excited. They thought their hardships will now slow down. “We just have two permanent teachers here, one for history and one for English,” Adnan said.
For more than sixty students enrolled with Government Degree College Tulail, there are only six teachers, with two permanent and four contractual. Located at a distance of 200 km from Srinagar, Tulailis part of Gurez, the new destination for naya Kashmir tourism. The college was established in 2019.
Supposed to help residents not to migrate – as most of Gurez lives between Bandipore and Srinagar, the college could have hugely contributed. Students, however, insist this is not the case.
“We have a history teacher, right?,” one student pointed out. “History as a subject is not taught here. I mean we have other subjects here but not history so technically we have no teachers to study from.”
These teachers engage students in classes organised on a shift basis. Students insist they have bigger issues. “We do not even have our separate principal. The principal of our college watches over two different colleges (the other one is at Dawar), we neither have professors, principal nor facilities here,” Adnan who is currently studying in BA third semester said.
Due to the lack of facilities, mostly a shortage of teachers, students prefer to stay home. This, they do after paying fees and costs for the degrees. Days ahead of the examination, the colleges start assessing attendance and enforcing shortages on them. “Tell me how does it make sense that students travel long distances for hours together, jeopardising their health to study here but there are no teachers? Not even a single official has ever visited us, we have been left to the mercy of the Lord,” a visibly upset Adnan complained.
The lack of staff is not the only issue for the colleges in Gurez. “Last year, when we were writing our examinations, we knew we were appearing for three subjects,” Adnan said. “It was during the examinations that the college told us we have to appear in two more subjects – the subjects we never knew. We were desperate for what to write and a day before we had to write the examination, they sent the syllabus of that subject.”
Students arrive at a college after a gap of nearly one year, following Covid19 safety guidelines issued by the government, in Srinagar, Monday, February 15, 2021. All the educational institutes including schools, colleges and universities in Jammu and Kashmir, which were closed in March last year in wake of the COVID-19 outbreak. KL Image: Bilal Bahadur
The Kashmir Plains
The staff crisis is not a high-altitude issue. Even the colleges within and around Srinagar are suffering.
In Government Degree College, Sumbal, the students said the teachers for skill enhancement courses, which have been recently introduced, are not permanent. They are contractual and keep changing. “The continuous cycle of changing of these contractual teachers results in a month-long gap in the session,” one student said. “The month is wasted which is worrisome as it affects our studies.”
The Sumbal College was established in 2010 and has an enrolment of more than 2500 students. In the neighbouring degree college at Hajin, students are crying for a physical education teacher.
A Teacher Deficit
Subsequent governments in Jammu and Kashmir have gone into the creation of a huge network of colleges. Some villages that had put up huge struggles to get their middle schools upgraded into high schools are now addresses for the new colleges. There were around 161 colleges for general education with an overall enrolment of 151478 students manned by 5745 teachers by the end of 2020-21. With the onset of the National Education Policy (NEP-2020), the government made huge plans about improving higher education. It included making five autonomous degree-granting colleges into Multidisciplinary Education and Research Universities, a sort of deemed universities. In fact, the government said three are already operating as autonomous colleges. There was a focus on skill and innovation.
Under NEP-2020, 30 colleges have been identified for the start of research and designated as Hub colleges. These are supposed to provide basic facilities of infrastructure and logistics to the rest of the colleges in their catchment.
On the ground, however, nothing much is visible. “How can these colleges become research centres, when prestigious colleges like Amar Singh College are yet to grant the right to its first and second-semester students to get into the library,” one student, speaking anonymously asked. “Students have been desperately seeking library cards but we are told the access to the library is permitted to higher semester students.”
The NAAC accreditation is the new mad race within colleges in which the assessment is mostly based on the infrastructure and the results – nobody is seeing, if at all, the students are taught in classrooms. Officials said 55 colleges in Jammu and Kashmir are NAAC accredited 17 more will be added to the list by December 2023. By 2025, 70 old colleges will be NAAC accredited.
Right now, most colleges are battling the faculty issue. This triggered a controversy when the management of a state-run women’s college in Baramulla asked the faculty from unrelated subjects to engage “classes of the departments (currently) without staff”.Teachers from Education, Physical Education, and Sports were asked to engage in the classes of Political Science; Chemistry faculty was assigned Public Administration; Botany teachers were supposed to engage in Economics; the Zoology department was given Social Work and Mathematics was to manage the Philosophy students.
This was the outcome of the higher education department not filling the vacancies on a temporary basis by the middle of March, almost a month after the colleges opened after the winter break. It created a sort of scandal and the college principal was asked to amend or withdraw the order. As it did not happen, the authorities issued a show cause notice. Insiders said the college asserted that the faults are at the policymaking level and not the college level.
A Generation Lost
For the last nearly two decades, the higher education department has been hiring teachers on an academic arrangement basis against a consolidated sum. They are disengaged every season. They lack any rights to leave, provident fund and other facilities that permanent faculty enjoy. Over the years they have been the main players in the higher education department.
“Every year, the government used to hire 800 to 1000 teachers on an academic arrangement basis,” Dr M Yousuf, one of the contractual lecturers said. “With the NEP, the requirement might have gone slightly up, maybe up to 1200.”
For a very long time, there was a rule in Jammu and Kashmir government that if somebody worked for the government for seven years, he or she has a right to be permanently hired. They had gone to court with the plea and secured an order directing authorities to ensure the people are not disturbed. So, every year, the government would hire them on priority. Post-2019, the government stopped extending this courtesy to them and instead started hiring new faces. Some of the contractual impacts by this decision in Jammu went to the supreme court and secured an order. Yousuf said while the order was implemented in Jammu, it was breached in Kashmir. Now, they have gone to CAT and are expecting a positive decision.
“This crisis ended up almost destroying their career of nearly 500 contractual teachers –mostly PhDs’, who served the department for 15 t 20 years and then the government stopped hiring them and they crossed the age bar,” Yousuf, one of these candidates, said. “Now we are no-bodies, we gave our entire life to these institutions and now we have nothing to do.”
Yousuf said the delay in hiring teachers on an academic arrangement basis is the main issue that is hitting the colleges right now. “There is a set norm for how many students a teacher must have but I know cases, where one teacher is assigned 600 students.”
Transportation Facilities
Teaching is just one part of the crisis. Students allege, there are other issues as well. Transportation is a key factor. Though almost every college has a transport facility, quite a few busses move out of the college.
“Some students in my college walk a distance of around 26 km to reach the college,” Adnan said. “Why we do not have the transport facility as other colleges have.”
In Government Degree College Kangan, the students have a similar complaint. “We have no transportation facility here, I mean that is basic,” one student said.
Various colleges have buses but lack the funds to hire a driver. In certain cases, they have drivers but not enough money to fuel the bus.
In the newly established Government Degree College Hajin, students allege the ground is in puddles, “Whenever it rains, the ground accumulates water and it becomes difficult to even walk through it let alone be any other thing,” Ahmad (name changed) who is currently enrolled in arts stream in the college said, “We don’t even have proper classrooms. In the main building only a few classes are taught, the rest of the classes are conducted in a hut which has a couple of rooms.” Besides, he said there is still an old building, which used to be a middle school in the past, on the ground there.
“Even if available, the washrooms are not located in proper settings,” he said.
Government Degree College Hajin is one of the 52 new colleges which were established in the year 2019.
City Colleges
Zubair (name changed) and his friends made a decision to get admitted to Amar Singh College, a prominent city college. As soon as he joined the first semester his perspective changed. A student in the second semester at present, Zubair had a list of issues to share, “You know there is no punctuality, I mean the classes are never conducted on time. The teachers are always late and never on time.”
Amar Singh College, Srinagar
The college, Zubair added, lacks hygiene, has dirty desks in classrooms, unclean washrooms and abundant stray dogs. This is in addition to the staff shortage. “We have been waiting since March for the teacher, as the contract of our previous teacher expired,” he said. The lack of mics in the classrooms is yet another concern for the students. “The classrooms are huge and the teachers are not audible to everybody in the class.”
The students said they have no access t the library. It has been done so easily. The college has not issued identity cards which are basic to entry into the library.
“This college has no proper gatekeeping and outsiders who are not even enrolled in our college get in and fight with the students of our college,” one female student said. “There is nobody who can check the people getting in.” Students confirmed the drug-peddling boys moving around.
Students of Women’s’ College Nawa Kadal alleged that the government is frequently shifting their principals. This, they said, is impacted the college.
In Women’s College MA Road, the students complained how the focus has been more on extra-curricular activities and not on education, “The classwork always suffers the most.”
Officials Admit
College managers and insiders admitted to the lot of issues they are facing. However, they insist they are not supposed to talk the way they used to talk earlier. Some of them agreed to talk in utmost anonymity.
“Yes, there is no college bus for students and the majority of the faculty positions are vacant except English and History,” echoing the thoughts of the students an official posted in Government Degree College, Tulail said. The official added that they have tried bringing it to the notice of authorities from time to time, “We had taken up the matter with our ex-principal secretary and he told that they were ready to sanction the college bus but it was not possible to engage any driver as there is a blanket ban on contractual or local fund recruitment.” He also lamented over the trend of teachers from Gurez and Tulail ensuring they are transferred to other places outside Gurez. “What can we expect from the teachers who are hired on a contractual basis.”
Most of the college managers approached to offer their side of the story but refused to talk. “Maybe next time,” one college principal said.
BERLIN — German Foreign Minister Annalena Baerbock is heading to China to represent Berlin, but she’ll likely have more explaining to do about Paris in the wake of French President Emmanuel Macron’s explosive comments on Taiwan.
As Baerbock embarked on her two-day visit Wednesday evening, officials in Berlin were eager to stress that Germany and the EU care about Taiwan and stability in the region, arguing it’s mainly China that must contribute to de-escalation by refraining from aggressive military maneuvers close to the island nation.
Baerbock’s trip comes amid international backlash against Macron’s comments in an interview with POLITICO, arguing Europe should avoid becoming America’s follower, including on the matter of Taiwan’s security. Although German government spokespeople refused to comment directly on the French president’s remarks, a spokesperson for the foreign ministry specifically called out Beijing when expressing “great concern” over the situation in the Taiwan Strait.
“We expect all parties in the region to contribute to peace. That applies equally to the People’s Republic of China,” the spokesperson said, adding: “And it seems to us that actions such as military threatening gestures are counter to that goal and, in fact, increase the risk of unintended military clashes.”
Nils Schmid, the foreign policy spokesperson for German Chancellor Olaf Scholz’s Social Democratic Party (SPD), said he expects Baerbock to “set the record straight” during her trip to China, which will involve meetings with Beijing’s Foreign Minister Qin Gang, Vice President Han Zheng and top diplomat Wang Yi.
“We clearly defined in the [government] coalition agreement that we need a changed China policy because China has changed. The chancellor made that clear during his visit. Above all, Scholz also issued clear warnings about Taiwan during his visit [last year],” Schmid wrote in a tweet. “I assume that Foreign Minister Baerbock will repeat exactly that and thus set the record straight and make a clarification after Macron’s botched visit.”
Berlin traditionally has been much more in sync with the U.S. on foreign and security policy than France has, which is why many politicians and officials in the German capital reacted with horror to Macron’s comments. The French president said Europe should not take its “cue from the U.S. agenda and a Chinese overreaction,” suggesting the EU stood between the two sides, rather than being aligned with its longtime democratic partners in Washington.
Macron gave the impression to some in the U.S. that Europeans see Beijing and Washington as “equidistant” from Brussels in terms of values and as allies, said SPD foreign policy lawmaker Metin Hakverdi, who is currently on a parliamentary visit to the U.S.
“That was foolish,” Hakverdi told POLITICO, adding that “Macron potentially damaged the peaceful status quo around Taiwan” by giving “the public impression that Europe has no particular interest in the conflict over Taiwan.
“The issue of Taiwan is not an internal matter for the People’s Republic of China. Anything else would virtually invite Beijing to attack Taiwan,” Hakverdi added. “I am confident that our foreign minister will make that clear during her trip to Asia — both to Beijing and to our Asian partners.”
Katja Leikert from the main German opposition party, the center-right CDU, criticized Macron’s comments as “extremely short-sighted,” and added: “Should China decide to strike Taiwan militarily, either by invading it or by starting a maritime blockade, this would have significant political and economic repercussions for us. We cannot just wish that away.
“What we actually need to do right now is strengthen our defense against aggressive measures from Beijing,” Leikert said.
For Berlin, Macron’s comments also come at a particularly bad moment for transatlantic ties. The German government is keen to mend cracks in its relationship with Washington that have emerged over the controversial benefits for U.S. businesses under Joe Biden’s Inflation Reduction Act. Europe hopes to reach an agreement so that its own companies may also be eligible for these subsidies.
Macron’s comments “will not help in renegotiations on the Inflation Reduction Act, nor will they help Joe Biden in the election campaign against populist Republican candidates,” said the SPD’s Hakverdi.
The German foreign ministry spokesperson was quick to stress that both France and Germany were involved in shaping a joint EU-China policy | Ludovic Marin/AFP via Getty Images
The German foreign ministry spokesperson was quick to stress that both France and Germany were involved in shaping a joint EU-China policy, which was also done in cooperation “with our transatlantic partner.”
During her trip to China, Baerbock plans to raise the situation in the Taiwan Strait; Russia’s war of aggression against Ukraine; the human rights situation in China; as well as the fight against climate crisis, the spokesperson said.
Baerbock’s foreign ministry is also currently drafting Germany’s first China strategy. A draft of this seen by POLITICO last year vowed to take a much harder line toward Beijing. Baerbock and her Green party are at the forefront of pushing such a tougher position, while Scholz has long preferred a softer approach.
Incidentally, however, the German government said Wednesday it is reassessing whether to potentially take a firmer stance and ban Chinese state company Cosco from going through with a highly controversial move to buy parts of a Hamburg port terminal.
Scholz had strongly pushed for the port deal ahead of his own trip to Beijing last year, but the future of the transaction is now in doubt after German security authorities classified the terminal as “critical infrastructure.”
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( With inputs from : www.politico.eu )
Ukraine’s farmers played an iconic role in the first weeks of Russia’s invasion, towing away abandoned enemy tanks with their tractors.
Now, though, their prodigious grain output is causing some of Ukraine’s staunchest allies to waver, as disrupted shipments are redirected onto neighboring markets.
The most striking is Poland, which has played a leading role so far in supporting Ukraine, acting as the main transit hub for Western weaponry and sending plenty of its own. But grain shipments in the other direction have irked Polish farmers who are being undercut — just months before a national election where the rural vote will be crucial.
Diplomats are floundering. After a planned Friday meeting between the Polish and Ukrainian agriculture ministers was postponed, the Polish government on Saturday announced a ban on imports of farm products from Ukraine. Hungary late Saturday said it would do the same.
Ukraine is among the world’s top exporters of wheat and other grains, which are ordinarily shipped to markets as distant as Egypt and Pakistan. Russia’s invasion last year disrupted the main Black Sea export route, and a United Nations-brokered deal to lift the blockade has been only partially effective. In consequence, Ukrainian produce has been diverted to bordering EU countries: Hungary, Poland, Romania and Slovakia.
At first, those governments supported EU plans to shift the surplus grain. But instead of transiting seamlessly onto global markets, the supply glut has depressed prices in Europe. Farmers have risen up in protest, and Polish Agriculture Minister Henryk Kowalczyk was forced out earlier this month.
Now, governments’ focus has shifted to restricting Ukrainian imports to protect their own markets. After hosting Ukrainian President Volodymyr Zelenskyy in Warsaw in early April, Polish President Andrzej Duda said resolving the import glut was “a matter of introducing additional restrictions.”
The following day, Poland suspended imports of Ukrainian grain, saying the idea had come from Kyiv. On Saturday, Polish Prime Minister Mateusz Morawiecki, after an emergency cabinet meeting, said the import ban would cover grain and certain other farm products and would include products intended for other countries. A few hours later, the Hungarian government announced similar measures. Both countries said the bans would last until the end of June.
The European Commission is seeking further information on the import restrictions from Warsaw and Budapest “to be able to assess the measures,” according to a statement on Sunday. “Trade policy is of EU exclusive competence and, therefore, unilateral actions are not acceptable,” it said.
While the EU’s free-trade agreement with Ukraine prevents governments from introducing tariffs, they still have plenty of tools available to disrupt shipments.
Neighboring countries and nearby Bulgaria have stepped up sanitary checks on Ukrainian grain, arguing they are doing so to protect the health of their own citizens. They have also requested financial support from Brussels and have already received more than €50 million from the EU’s agricultural crisis reserve, with more money on the way.
Restrictions could do further harm to Ukraine’s battered economy, and by extension its war effort. The economy has shrunk by 29.1 percent since the invasion, according to statistics released this month, and agricultural exports are an important source of revenue.
Cracks in the alliance
The trade tensions sit at odds with these countries’ political position on Ukraine, which — with the exception of Hungary — has been strongly supportive. Poland has taken in millions of Ukrainian refugees, while weapons and ammunition flow in the opposite direction; Romania has helped transport millions of tons of Ukrainian corn and wheat.
Volodymyr Zelenskyy and Poland’s Prime Minister, Mateusz Morawiecki | Omar Marques/Getty Images
Some Western European governments, which had to be goaded by Poland and others into sending heavy weaponry to Kyiv, are quick to point out the change in direction.
“Curious to see that some of these countries are [always] asking for more on sanctions, more on ammunition, etc. But when it affects them, they turn to Brussels begging for financial support,” said one diplomat from a Western country, speaking on condition of anonymity.
Some EU countries also oppose the import restrictions for economic reasons. For instance, Spain and the Netherlands are some of the biggest recipients of Ukrainian grain, which they use to supply their livestock industries.
Politically, though, the Central and Eastern European governments have limited room for maneuver. Poland and Slovakia are both heading into general elections later this year. Bulgaria has had a caretaker government since last year. Romania’s agriculture minister has faced calls to resign, including from a compatriot former EU agriculture commissioner.
And farmers are a strong constituency. Poland’s right-wing Law & Justice (PiS) party won the last general election in 2019 thanks in large part to rural voters. The Ukrainian grain issue has already cost a Polish agriculture minister his job; the government as a whole will have to tread carefully to avoid the same fate.
This article has been updated.
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( With inputs from : www.politico.eu )
For Turkey’s President Recep Tayyip Erdoğan, next month’s election is of massive historical significance.
It falls 100 years after the foundation of Mustafa Kemal Atatürk’s secular republic and, if Erdoğan wins, he will be empowered to put even more of his stamp on the trajectory of a geostrategic heavyweight of 85 million people. The fear in the West is that he will see this as his moment to push toward an increasingly religiously conservative model, characterized by regional confrontationalism, with greater political powers centered around himself.
The election will weigh heavily on security in Europe and the Middle East. Who is elected stands to define: Turkey’s role in the NATO alliance; its relationship with the U.S., the EU and Russia; migration policy; Ankara’s role in the war in Ukraine; and how it handles tensions in the Eastern Mediterranean.
The May 14 vote is expected to be the most hotly contested race in Erdoğan’s 20-year rule — as the country grapples with years of economic mismanagement and the fallout from a devastating earthquake.
He will face an opposition aligned behind Kemal Kılıçdaroğlu, nicknamed the “Turkish Gandhi,” who is promising big changes. Polls suggest Kılıçdaroğlu has eked out a lead, but Erdoğan is a hardened election campaigner, with the full might of the state and its institutions at his back.
“There will be a change from an authoritarian single-man rule, towards a kind of a teamwork, which is a much more democratic process,” Ünal Çeviköz, chief foreign policy adviser to Kılıçdaroğlu told POLITICO. “Kılıçdaroğlu will be the maestro of that team.”
Here are the key foreign policy topics in play in the vote:
EU and Turkish accession talks
Turkey’s opposition is confident it can unfreeze European Union accession talks — at a standstill since 2018 over the country’s democratic backsliding — by introducing liberalizing reforms in terms of rule of law, media freedoms and depoliticization of the judiciary.
The opposition camp also promises to implement European Court of Human Rights decisions calling for the release of two of Erdoğan’s best-known jailed opponents: the co-leader of the pro-Kurdish Peoples’ Democratic Party Selahattin Demirtaş and human rights defender Osman Kavala.
“This will simply give the message to all our allies, and all the European countries, that Turkey is back on track to democracy,” Çeviköz said.
Even under a new administration, however, the task of reopening the talks on Turkey’s EU accession is tricky.
Turkey’s opposition is aligned behind Kemal Kılıçdaroğlu, nicknamed the “Turkish Gandhi” | Burak Kara/Getty Images
Anti-Western feeling in Turkey is very strong across the political spectrum, argued Wolfango Piccoli, co-founder of risk analysis company Teneo.
“Foreign policy will depend on the coherence of the coalition,” he said. “This is a coalition of parties who have nothing in common apart from the desire to get rid of Erdoğan. They’ve got a very different agenda, and this will have an impact in foreign policy.”
“The relationship is largely comatose, and has been for some time, so, they will keep it on life support,” he said, adding that any new government would have so many internal problems to deal with that its primary focus would be domestic.
Europe also seems unprepared to handle a new Turkey, with a group of countries — most prominently France and Austria — being particularly opposed to the idea of rekindling ties.
“They are used to the idea of a non-aligned Turkey, that has departed from EU norms and values and is doing its own course,” said Aslı Aydıntaşbaş a visiting fellow at Brookings. “If the opposition forms a government, it will seek a European identity and we don’t know Europe’s answer to that; whether it could be accession or a new security framework that includes Turkey.”
“Obviously the erosion of trust has been mutual,” said former Turkish diplomat Sinan Ülgen, a senior fellow at the Carnegie Europe think tank, arguing that despite reticence about Turkish accession, there are other areas where a complementary and mutually beneficiary framework could be built, like the customs union, visa liberalization, cooperation on climate, security and defense, and the migration agreement.
The opposition will indeed seek to revisit the 2016 agreement with the EU on migration, Çeviköz said.
“Our migration policy has to be coordinated with the EU,” he said. “Many countries in Europe see Turkey as a kind of a pool, where migrants coming from the east can be contained and this is something that Turkey, of course cannot accept,” he said but added. “This doesn’t mean that Turkey should open its borders and make the migrants flow into Europe. But we need to coordinate and develop a common migration policy.”
NATO and the US
After initially imposing a veto, Turkey finally gave the green light to Finland’s NATO membership on March 30.
But the opposition is also pledging to go further and end the Turkish veto on Sweden, saying that this would be possible by the alliance’s annual gathering on July 11. “If you carry your bilateral problems into a multilateral organization, such as NATO, then you are creating a kind of a polarization with all the other members of NATO with your country,” Çeviköz said.
A protester pushes a cart with a RRecep Tayyip Erdoğan doll during an anti-NATO and anti-Turkey demonstration in Sweden | Jonas Gratzer/Getty Images
A reelected Erdoğan could also feel sufficiently empowered to let Sweden in, many insiders argue. NATO allies did, after all, play a significant role in earthquake aid. Turkish presidential spokesperson İbrahim Kalın says that the door is not closed to Sweden, but insists the onus is on Stockholm to determine how things proceed.
Turkey’s military relationship with the U.S. soured sharply in 2019 when Ankara purchased the Russian-made S-400 missile system, a move the U.S. said would put NATO aircraft flying over Turkey at risk. In response, the U.S. kicked Ankara out of the F-35 jet fighter program and slapped sanctions on the Turkish defense industry.
A meeting in late March between Kılıçdaroğlu and the U.S. Ambassador to Ankara Jeff Flake infuriated Erdoğan, who saw it as an intervention in the elections and pledged to “close the door” to the U.S. envoy. “We need to teach the United States a lesson in this elections,” the irate president told voters.
In its policy platform, the opposition makes a clear reference to its desire to return to the F-35 program.
Russia and the war in Ukraine
After the Russian invasion of Ukraine, Turkey presented itself as a middleman. It continues to supply weapons — most significantly Bayraktar drones — to Ukraine, while refusing to sanction Russia. It has also brokered a U.N. deal that allows Ukrainian grain exports to pass through the blockaded Black Sea.
Highlighting his strategic high-wire act on Russia, after green-lighting Finland’s NATO accession and hinting Sweden could also follow, Erdoğan is now suggesting that Turkey could be the first NATO member to host Russian President Vladimir Putin.
“Maybe there is a possibility” that Putin may travel to Turkey on April 27 for the inauguration of the country’s first nuclear power reactor built by Russian state nuclear energy company Rosatom, he said.
Çeviköz said that under Kılıçdaroğlu’s leadership, Turkey would be willing to continue to act as a mediator and extend the grain deal, but would place more stress on Ankara’s status as a NATO member.
“We will simply emphasize the fact that Turkey is a member of NATO, and in our discussions with Russia, we will certainly look for a relationship among equals, but we will also remind Russia that Turkey is a member of NATO,” he said.
Turkey’s relationship with Russia has become very much driven by the relationship between Putin and Erdoğan and this needs to change, Ülgen argued.
Turkey brokered a U.N. deal that allows Ukrainian grain exports to pass through the blockaded Black Sea | Ozan Kose/AFP via Getty Images
“No other Turkish leader would have the same type of relationship with Putin, it would be more distant,” he said. “It does not mean that Turkey would align itself with the sanctions; it would not. But nonetheless, the relationship would be more transparent.”
Syria and migration
The role of Turkey in Syria is highly dependent on how it can address the issue of Syrians living in Turkey, the opposition says.
Turkey hosts some 4 million Syrians and many Turks, battling a major cost-of-living crisis, are becoming increasingly hostile. Kılıçdaroğlu has pledged to create opportunities and the conditions for the voluntary return of Syrians.
“Our approach would be to rehabilitate the Syrian economy and to create the conditions for voluntary returns,” Çeviköz said, adding that this would require an international burden-sharing, but also establishing dialogue with Damascus.
Erdoğan is also trying to establish a rapprochement with Syria but Syrian President Bashar al-Assad says he will only meet the Turkish president when Ankara is ready to completely withdraw its military from northern Syria.
“A new Turkish government will be more eager to essentially shake hands with Assad,” said Ülgen. “But this will remain a thorny issue because there will be conditions attached on the side of Syria to this normalization.”
However, Piccoli from Teneo said voluntary returns of Syrians was “wishful thinking.”
“These are Syrians who have been living in Turkey for more than 10 years, their children have been going to school in Turkey from day one. So, the pledges of sending them back voluntarily, it is very questionable to what extent they can be implemented.”
Greece and the East Med
Turkey has stepped up its aggressive rhetoric against Greece in recent months, with the Erdoğan even warning that a missile could strike Athens.
But the prompt reaction by the Greek government and the Greek community to the recent devastating earthquakes in Turkey and a visit by the Greek Foreign Minister Nikos Dendias created a new backdrop for bilateral relations.
A Turkish drill ship before it leaves for gas exploration | Adem Altan/AFP via Getty Images
Dendias, along with his Turkish counterpart Mevlüt Çavuşoğlu, announced that Turkey would vote for Greece in its campaign for a non-permanent seat in the United Nations Security Council for 2025-26 and that Greece would support the Turkish candidacy for the General Secretariat of the International Maritime Organization.
In another sign of a thaw, Greek Defense Minister Nikos Panagiotopoulos and Migration Minister Notis Mitarachi visited Turkey this month, with Turkish Defense Minister Hulusi Akar saying he hoped that the Mediterranean and Aegean would be a “sea of friendship” between the two countries. Akar said he expected a moratorium with Greece in military and airforce exercises in the Aegean Sea between June 15 and September 15.
“Both countries are going to have elections, and probably they will have the elections on the same day. So, this will open a new horizon in front of both countries,” Çeviköz said.
“The rapprochement between Turkey and Greece in their bilateral problems [in the Aegean], will facilitate the coordination in addressing the other problems in the eastern Mediterranean, which is a more multilateral format,” he said. Disputes over maritime borders and energy exploration, for example, are common.
As far as Cyprus is concerned, Çeviköz said that it is important for Athens and Ankara not to intervene into the domestic politics of Cyprus and the “two peoples on the island should be given an opportunity to look at their problems bilaterally.”
However, analysts argue that Greece, Cyprus and the EastMed are fundamental for Turkey’s foreign policy and not much will change with another government. The difference will be more one of style.
“The approach to manage those differences will change very much. So, we will not hear aggressive rhetoric like: ‘We will come over one night,’” said Ülgen. “We’ll go back to a more mature, more diplomatic style of managing differences and disputes.”
“The NATO framework will be important, and the U.S. would have to do more in terms of re-establishing the sense of balance in the Aegean,” said Aydıntaşbaş. But, she argued, “you just cannot normalize your relations with Europe or the U.S., unless you’re willing to take that step with Greece.”
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( With inputs from : www.politico.eu )
Beirut: The development of Lebanon’s real estate sector is slowing down, with demand for properties falling by around 80 per cent in 2022 and 2023 compared to the years before the ongoing financial crisis which first erupted in 2019, according to economists.
Nassib Ghobril, head of the economic research department at Byblos Bank, told Xinhua news agency that demand for properties has dropped by at least 80 per cent in the four years after the crisis, due to the lack of market liquidity.
In 2020 and 2021, buyers could still pay for their properties through cheques, which were needed by the real estate developers to settle their bank loans, said Ghobril.
However, after paying off most of their bank debts, the developers only accepted cash, making it very difficult for Lebanese buyers to afford properties as the bankrupt banks froze tens of billions of dollars saved in their accounts, he noted.
Adnan Rammal, a real estate developer and representative of the trade sector in the Economic and Social Council, attributed the decline in demand to Lebanese buyers’ reduced purchasing power following the devaluation of their currency as a result of the severe financial crisis.
Before the crisis, according to Rammal, around 60 to 70 per cent of properties sold were small apartments priced at approximately $150,000.
However, buyers of these apartments, mostly employees paid on wages, saw their purchasing power decreased a great deal during the crisis.
Making matters worse, the collapse of the banking sector made those employees who relied significantly on loans no longer had access to them.
According to developers, the sharp decrease in property demand in Lebanon led to a price drop of around 50 per cent from pre-crisis levels.
Developers have stressed the necessity for the government to take urgent measures to revive the real estate market and some other sectors of the economy.
Rammal said that the banking sector must be restructured in order for it to provide loans to buyers as before.
The economic and financial crisis that started in October 2019 has been further exacerbated by the dual economic impact of the Covid-19 pandemic, and the massive Port of Beirut explosion in August 2020, according to the World Bank.
Of the three, the economic crisis has had by far the largest (and most persistent) negative impact.
In July last year, Lebanon was reclassified by the World Bank as a lower-middle income country, down from upper middle-income status.
Unemployment has also increased from 11.4 per cent in 2018-19 to 29.6 per cent in 2022.
Earlier this month, the Lebanese currency collapsed to 100,000 LBP per US dollar for the first time in history.
Lebanon’s economists have been calling on authorities to elect a new president and form a new cabinet to end the political deadlock and allow the country to implement necessary reforms and stop the collapse.
Meanwhile, officials in London, Brussels, Berlin, Dubai and Kyiv questioned Washington about how the information ended up online, who was responsible for the leak and what the U.S. was doing to ensure the information was removed from social media. They also questioned whether the Biden administration was taking steps to limit the distribution of future intelligence. As of Monday morning, U.S. officials had told allies the administration was investigating and that they were still trying to understand the full scope of the leak, the European officials said.
Ukraine has long worried about information it shares with the U.S. spilling out into the open. “This case showed that the Ukrainians have been absolutely right about that,” said one of the European officials, who like others was granted anonymity to speak about the sensitive leak. “Americans now owe the Ukrainians. They have to apologize and compensate.”
The saga has left the U.S. relationship with its allies in a state of crisis, raising questions about how Washington will correct what officials worldwide view as one of the largest public breaches of U.S. intelligence since WikiLeaks dumped millions of sensitive documents online from 2006 to 2021.
The distress over the leak is particularly problematic because the majority of the documents focus on the war in Ukraine — an effort the U.S. has repeatedly said hinges on collaboration among allies in NATO, Europe and elsewhere.
“The manner of the leak and the contents are very unusual,” said a former U.S. intelligence analyst who focused on Russia. “I can’t remember a time when there was this volume of a leak and this broad of a subject matter of authentic information that was just put on social media rather than say, the Snowden files, that went through a group of journalists first.”
The Pentagon, CIA, ODNI, and FBI declined to comment.
More than 100 U.S. intelligence documents were posted on Discord, a secure messaging app, as early as March 2 and contained sensitive, classified information about the war in Ukraine, Russian military activity, China and the Middle East. The photographed papers, which appeared to have been folded over and then smoothed out, contained top secret information, including from the Central Intelligence Agency.
POLITICO’s review of the documents shows some that appear to have been assembled into a briefing packet by the Joint Staff’s intelligence arm, known as J2, with summaries of global matters pulled from various U.S. intelligence systems. Some of the documents contain markings in the corners that correspond with specific wires with information that appear to be compiled in summary form — a practice often used by individuals inside the government to prepare briefing packets, the former U.S. intelligence analyst said.
It’s still unclear the extent to which the documents have been altered — and by whom. The documents posted in March do not appear to show any glaring alterations, but when some of those were reposted on Discord in April, at least one paper appears to have been altered to show significantly inflated Ukrainian death tolls.
Pentagon spokesperson Sabrina Singh said in a statement Sunday that the administration has assembled an interagency team “focused on assessing the impact these photographed documents could have on U.S. national security and on our allies and partners.” She confirmed that U.S. officials had engaged with “allies and partners” across the globe, adding that the department was still assessing the “validity” of the documents posted to social media.
It’s unclear who from the Biden administration is involved in that interagency effort. The senior U.S. official said only the highest levels of government were in discussions about how to manage the leak. Even those senior officials who work on Ukraine and Russia policy and on portfolios that pertain to countries mentioned in the documents did not know as of Sunday how the administration would respond.
“I have no idea what the plan is,” another senior U.S. official said. “I’d like to know myself how we’re going to handle.”
Meanwhile, in Kyiv where military leaders are busy preparing for a spring counteroffensive, senior officials blamed Russia for the leak and characterized it as a disinformation campaign.
“It is very important to remember that in recent decades, the most successful operations of the Russian special services have been carried out in Photoshop,” Andriy Yusov, the representative of the Ukrainian Defense Intelligence Main Directorate, said on Friday — adding that a preliminary analysis of the documents showed “distorted figures” on losses suffered by both Russia and Ukraine.
A senior Ukrainian lawmaker said the leak was “not seen as a big issue here.”
But elsewhere in Ukraine in the senior national security ranks, officials were angered by the leak, according to one of the European officials. While the documents are dated and likely have no immediate impact on the country’s battlefield operations, the publishing of the information was viewed internally as an embarrassment and potential long-term security problem for Ukraine’s military commanders.
It’s unclear the extent to which the U.S. will alter its intelligence sharing on the Ukraine war in the days and weeks ahead.
The U.S. has made it a habit of sharing intelligence with Ukraine and European allies since 2022. In the months leading up to the war, the U.S. intelligence community shared information with allies to build a coalition of support for Kyiv and to prepare targeted sanctions on Russian government entities and businesses. Senior U.S. officials have heralded that strategy as a major success — one that allowed the U.S., its allies in Europe and in Kyiv to better prepare for the eventual Russian assault.
Veronika Melkozerova contributed to this report.
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( With inputs from : www.politico.com )
