French President Emmanuel Macron will make the tough political choices needed to meet his deficit commitments, his government spokesman said, as he looked to put a bodyguard scandal behind him at his first Cabinet meeting after the summer break.

Macron and his ministers in all likelihood need to find savings in next year’s budget, to be presented to parliament next month, if they are to prevent the deficit from ballooning once again.

The president faced his first crisis in the summer when video surfaced of bodyguard Alexandre Benalla beating a protester. Macron’s own aloof response fanned public discontent.

Now the 40-year-old leader returns to work facing difficult political choices as he embarks on a new wave of reforms to reform the pensions system, overhaul public healthcare and shake-up the highly unionized public sector — tasks complicated by forecasts that economic growth is slower than expected.

“A budget is not only figures, but a strategy, and strong political choices,” Griveaux said, without giving details on the budget negotiations. “There will be [spending] increases and then we will require efforts from other sectors.”

The French economy eked out less growth than expected in the second quarter as strikes and higher taxes hit consumer spending, official data showed in July.

Macron has linked fiscal discipline to restoring France’s credibility in Europe, and while the budget deficit — forecast at 2.3 percent of GDP this year and next — should not surpass the EU-mandated 3 percent limit, it is still expected to be one of the highest in the euro zone.

“The budget equation is becoming more complicated,” Denis Ferrand, economist at COE-Rexecode told Reuters.

The Bank of France has revised 2018 growth down to 1.8 percent from 1.9 percent. Budget rapporteur Joel Giraud in July said that a revision down to 1.7 percent could see the public deficit slip by 0.2 percentage points.

Beyond raising eyebrows in Brussels and Berlin, it would also complicate Macron’s efforts to make transfers towards social policies that might help him dispel the impression among leftist critics that he is a “president of the rich.”

“It would be more difficult to find resources for social spending,” Ferrand said.

Elysee officials acknowledge growth was lower than expected in the first half, and say the housing and subsidized jobs portfolios will see sharp cuts to help finance Macron’s priorities in education, security and the environment.

Some 1 billion euros ($1.14 billion) is expected to be saved by changing rules for widely-enjoyed housing benefits, junior minister Julien Denormandie told BFM TV earlier on Wednesday.

Last year, a cut of five euros ($6) per month to the same allowance contributed to a sharp slump in the president’s popularity, which opinion polls show plumbing lows.
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Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four senior industry sources said on Wednesday.

The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries Corp., two of the sources said.

“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way — first delay then calling off,” a Saudi source familiar with IPO plans.

Saudi Aramco did not immediately respond to an emailed request for comment. The Saudi Royal Court had no immediate comment.

The proposed listing of the national champion was a central part of Crown Prince Mohammed bin Salman’s reform drive aimed at restructuring the kingdom’s economy and reducing its dependence on oil revenue.

The prince announced the plan to sell about 5 percent of Aramco in 2016 via a local and an international listing, predicting the sale would value the whole company at $2 trillion or more. Several industry experts however questioned whether a valuation that high was realistic, which hindered the process of preparing the IPO for the advisors.

Stock exchanges in financial centers including London, New York and Hong Kong had been vying to host the international tranche of the share sale.

An army of bankers and lawyers started to fiercely compete to win advisory roles in the IPO, seen as a gateway to a host of other deals they expected to flow from the kingdom’s wide privatization program.

International banks JPMorgan, Morgan Stanley and HSBC, were working as global coordinators, boutique investment banks Moelis & Co and Evercore were chosen as independent advisors and law firm White & Case as legal adviser, sources had previously told Reuters.

More banks were expected to be named but no bookrunners were formally appointed despite banks pitching for the deal.

Lawyers, bankers and auditors are all essential in the drafting the prospectus, a formal document that provides essential details on the company.

“The message we have been given is that the IPO has been called off for the foreseeable future,” said one of the sources, a senior financial advisor.

“Even the local float on the Tadawul Stock Exchange has been shelved,” the source added.

Saudi energy minister and Aramco chairman Khalid al-Falih said in the company’s 2017 annual report, released in August, that Aramco “continued to prepare itself for the listing of its shares, a landmark event the company and its board anticipate with excitement.”

Aramco had a budget which it used to pay advisors until the end of June. This has not been renewed, one of sources said.

“The advisors have been put on standby,” a third source, a senior oil industry official said.

“The IPO has not been officially called off, but the likelihood of it not happening at all is greater than it being on.”

Sources have previously told Reuters that in addition to the valuations, disagreements among Saudi officials and their advisers over which international listing venue to be chosen had slowed down the IPO preparations.
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Disney is offering to pay full tuition for hourly workers who want to earn a college degree or finish a high school diploma.

The Walt Disney Co. said Wednesday it will pay upfront tuition to workers who want to take classes starting in the fall.

Disney initially will invest $50 million into the “Disney Aspire” program and up to $25 million a year after that.

Other large corporations have begun paying tuition for workers in a job market with low unemployment.

In May, Walmart said it will offer workers the chance to get a college degree at three universities with online programs.

Disney is rolling out its program in phases, with the first limited to online classes. It is being administered by Guild Education, the same firm operating Walmart’s program.
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The U.S. economy likely created 43,000 more jobs in the 12 months through March than previously estimated, the Labor Department said on Wednesday.

The marginal increase, which the Labor Department said represented less than a 0.05 percent gain versus current estimates, is a preliminary estimate of the government’s annual “benchmark” revision to nonfarm payrolls data.

Job growth in the U.S. economy remains relatively strong despite the labor market being near full employment.

Once a year, the government compares its nonfarm payrolls data, based on monthly surveys of a sample of employers, with a much more complete database of unemployment insurance tax records.

A final benchmark revision will be published in February along with the employment report for January. Government statisticians will use the final benchmark count to revise payrolls data for months both prior to and after March 2018.
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When reforms began in Myanmar in 2011, its tourism sector was considered as one of those most likely to take advantage of the economic opportunities as the country looked to reconnect with the outside world. 

Authorities and businesspeople were confident that foreign tourists would be drawn to Myanmar, eager to see such sites as the ancient temples of Bagan, the unique culture of Inle Lake, or the picturesque beaches overlooking the Bay of Bengal. 

For a while it worked, as Myanmar’s international reputation improved in-line with the reforms happening at the time, the country was at the top of many visitors’ wish lists. Official figures showed that more than 4.68 million tourists visited the country in 2015, up from 816,000 in 2011. In 2017, 3.4 million tourists visited. 

But the situation has changed again. The tourism sector has been heavily impacted by the crisis in Rakhine State, which has seen 700,000 Rohingya cross into Bangladesh to flee a brutal army crackdown. Myanmar’s military has been accused of ethnic cleansing the Rohingya, leading many tourists to stay away because of ethical concerns. 

Myanmar’s government recognizes the need to take action, and in early August held a meeting for stakeholders to discuss what measures can be taken to improve the situation. 

At that event, de facto leader Aung San Suu Kyi said the country should focus on measures such as improving rail and water transport, providing clean accommodation and developing more community-based tourism projects.

“Tourists can get many opportunities such as viewing the beautiful scenery and enjoying new experiences,” Aung San Suu Kyi said. “That is why roads, water ways and railways should be considered aside from air travel.” 

Tourist operators in the country welcomed the remarks, but said that there are more short-term measures that can be made, and have also called for a nationwide strategic plan to tackle the malaise the industry is currently undergoing. 

“What is needed is a comprehensive integrated approach from [the government] and the private sector to improve the tourism sector,” said Aung Kyaw Swar, former principal of the Inle Heritage Foundation. “This should include infrastructure, products, channels of communication, public relations, marketing and sales.” 

He said he welcomed Aung San Suu Kyi’s speech, particularly the calls to improve infrastructure, but said a cohesive plan should be formed, including one that ensures that the respective ministries work closely together. 

He also said that the government should invest in research teams, in order to effectively research potential clients’ expectations when they visit the country.

Foreign visitors to Myanmar have traditionally been drawn towards the major cities of Yangon and Mandalay, as well as Bagan and Inle Lake, but new destinations are emerging, and tourist development in lesser known areas could bring economic benefits. 

U Bawla, a hotelier in Kale, the gateway to Chin State, one of Myanmar’s most scenic but underdeveloped regions, said that government support for tourism development would bring huge improvements for the lives of Chin people. 

“When people come to Chin State, [they say] it is an amazing, and beautiful place,” he said, adding that only a handful of tourists visit each month. “I think that if the government concentrates on [developing tourism] in Chin State, that will bring many improvements for the Chin people, including improvements in roads and transportation.” 

Bertie Lawson, managing director of Yangon-based Sampan Travel, said that Aung San Suu Kyi’s recommendations were “a good start”, but that much more needed to be done. 

As examples, he highlighted the practice by domestic airlines of charging foreigners double the price of Myanmar citizens, and the fact that buses to tourist destinations are often scheduled to arrive in the middle of the night, rather than at times more convenient for visitors. 

“This might seem small and petty, but they add up and make people wonder if Myanmar is really worth it, when they could go elsewhere and not have to deal with this,” he told VOA. 

“People aren’t complaining about the lack of CBT projects, or waterways. They’re complaining about the price, or about the issues they have traveling around the county. Those things can be changed, and should be looked at first,” he said. 

Lawson said he believed the impact of the Rakhine crisis on tourism would likely be long-term, but said there was still reason to be optimistic. 

“Repairing that reputation will take quite a long time,” he said. “I don’t think that means that tourism can’t do well, I just don’t think it will grow quite at the rate many were previously expecting.” 
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Mexico risks losing long-term passenger growth and billions of dollars if it fails to go through with building a new hub in the capital to alleviate congestion, an executive with the International Air Transport Association (IATA) said on Tuesday.

Mexico’s incoming government last week postponed a decision on whether to complete a partially constructed new airport in Mexico City, saying the public should be consulted on the fate of the $13-billion hub, which the next president initially opposed.

President-elect Andres Manuel Lopez Obrador said the project was tainted by corruption prior to his July 1 landslide election victory, and had pressed for an existing military airport north of the capital to be expanded instead.

Without the new airport, around 20 million fewer passengers would fly to Mexico City starting in 2035, year over year, said Peter Cerda, regional vice president in the Americas for IATA.

It would also mean a long-term loss of $20 billion from Mexico’s GDP and cost the country 200,000 jobs, according to an airline-industry study on the financial impact of not building the new airport, Cerda said.

IATA, the Montreal-based trade association, has 290 member airlines which together transport about 82 percent of global air traffic.

Passenger traffic is expected to double by 2035 on a global basis, including Latin America, Cerda said in an interview.

“If you don’t build an airport that’s able to meet the needs of the next 50 years you just cannot continue to grow,” Cerda said on the sidelines of the International Aviation Forecast Summit in Denver. “And that has financial implications for the country.”

Work began on the new airport, which is a few miles northeast of the current one, in 2015. The present airport, located in the east of Mexico City, has become increasingly saturated by rising air traffic and has no room to expand.

“This is an airport that was built for 32 million passengers a year and currently we have 45 million passengers traveling through,” Cerda said.

Cerda urged Mexico to make any decision on “technical justifications” rather than “public outcry that may not fully understand the consequences.”
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For Mazen Rahhal, a shop owner in a bustling district of Beirut, Lebanon’s economy has seldom felt more precarious. In one store, he sells clothes at a fraction of their previous price. Another, which he rented to a rival business, now lies empty.

Years of gradual stagnation have in 2018 merged with several newer trends: high interest rates, falling house prices and questions about the currency at a moment of profound uncertainty as politicians wrangle over forming a new government.

For Lebanese businesses and people, economic unease and the lack of a government to take firm control over policy — some three months after they voted in a general election — have become ceaseless sources of worry.

“We are struggling just to manage the costs we have to pay: from electricity, employee wages, everything,” said Rahhal. His family has owned shops on Hamra Street, the main business thoroughfare of west Beirut, since the 1970s.

As Lebanon rebuilt after its 15-year civil war ended in 1990, there was a period of economic growth, and as in its 1950s and 60s heyday, it drew Gulf Arab tourists ready to open their wallets as they escaped the stifling summer heat of home.

But problems were never far away.

In 2005 prime minister Rafik al-Hariri was assassinated, opening up wide divisions over the roles of the Iran-backed Hezbollah group, and of powerful neighbor Syria.

Syria’s own war since 2011 has aggravated those rifts, while cutting off much of Lebanon’s overland trade and scaring off the mostly Sunni Muslim Gulf tourists, who feared the growing power of the heavily armed Shi’ite Hezbollah movement.

Sclerosis ensued. After Hariri’s death, the government did not pass another state budget until last year. Parliamentary elections in 2009 were not held again until this May.

Economic growth, which averaged 8-10 percent before the Syria war, has averaged 1-2 percent since it began, and a purchasing managers’ index for Blom Bank has shown business activity in decline every month since 2013.

The state owes about 150 percent of the gross domestic product, much of it to local banks, whose own business is partly based on remittances paid into them by Lebanese working abroad, in turn partly drawn by attractive interest rates.

Difficulties 

Khoury Home is a major business in Lebanon. Its shops, a familiar sight across the country, sell home appliances. 

Romen Mathieu said he had told his staff every year since becoming the company’s chairman in 2013 that the coming year would be more difficult than the last.

“Now we reached 2018, and this year is disastrous, and I think we still didn’t see the tough part of this year,” he said. “If I have to say it in 2019, there won’t be anyone listening to me any more.”

Compounding Mathieu’s difficulties, the government last year scaled back a series of incentives to banks for home loans, which contributed to a dip in the housing market. As fewer people bought houses, fewer wanted new fridges or televisions.

“Let’s not make fools of each other. There is no money in the market and we need to adapt to this situation and get used to it,” said Mathieu.

Not all businesses are suffering. Supermarket chain Spinneys has increased sales volumes because many of its goods are imported from Europe, and currency fluctuation has brought prices down, said chief executive Michael Wright.

“We are selling more, our volumes are going up. But that’s balanced by a price drop,” he said.Since May’s election the rival political parties have squabbled over forming a new national unity government — one that contains enough of the major parties to ensure political backing across the country.

Without a new government, Lebanon cannot institute the fiscal reforms needed to get its debt under control or unlock billions of dollars in pledged foreign investment in infrastructure to get the economy moving.

Everybody Reuters interviewed said it was critical for Lebanon to form a government soon.

Meanwhile, interest rates have risen as the authorities increasingly try to attract higher levels of the bank deposits on which government debt relies.

Those high rates are hurting too.

Jessy Kojababian has been engaged for two years. Her wedding was fixed for September. But as interest rates rose, and the government incentives for banks to offer housing loans were scaled back, she and her fiance could no longer afford to buy a house.

They have now cancelled the wedding.

“We were already booking everything for the wedding. The roses, the restaurant, the church. Everything. We paid a deposit of $6,000, so how can we get it back?” she said.
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U.S. and Mexican officials postponed ministerial talks aiming for a breakthrough in the revamp of the North American Free Trade Agreement (NAFTA) until Wednesday, although one member of the incoming Mexican government met U.S. officials on Tuesday.

Since restarting last month, the talks have focused on ironing out differences between Mexico and the United States which cut to the heart of U.S. President Donald Trump’s complaint that NAFTA has hollowed out U.S. manufacturing to Mexico’s benefit.

Trump has threatened to withdraw from the 24-year-old accord if it is not reworked to his satisfaction. He hopes he can reduce the U.S. trade deficit with lower-cost Mexico and claw back jobs, particularly in the automotive industry.

Canada has been waiting for the Mexican and U.S. teams to reach common ground on autos before rejoining the negotiation.

U.S. and Mexican officials say they will push for a deal on reworking auto industry rules that could open the door for Canada to return to negotiations soon.

Ministerial talks were expected on Tuesday, but Mexico’s top trade official, Economy Minister Ildefonso Guajardo, would not meet with U.S. Trade Representative Robert Lighthizer in Washington until Wednesday, the Mexican ministry said.

But Jesus Seade, designated chief negotiator of Mexican President-elect Andres Manuel Lopez Obrador, who is due to take power in December, met Lighthizer whom he has known for years.

Entering talks, Seade said the teams were making “good progress” and “coming to the end” of their discussions. He expected bilateral issues to be resolved by early next week.

A Canadian government source said there was “nothing to report for the moment” on Canada’s return to the talks.

Trump’s son-in-law and adviser Jared Kushner also attended the talks with Seade on Tuesday. Kushner has been a regular participant in the NAFTA discussions.

Talks to rework NAFTA, which underpins the bulk of foreign trade in North America, have ground on for more than a year.

Discussions stalled ahead of the July 1 Mexican election as negotiators failed to make a decisive breakthrough.

The three sides have also yet to agree on future dispute resolution mechanisms, while Mexico and Canada oppose a U.S. demand for a “sunset” clause that would force a renegotiation of NAFTA every five years and could hinder long-term investment.

Bilateral Issues

Though NAFTA is a trilateral deal, a Mexican source said there are issues that are really “bilateral” between Mexico and the United States. In rules of origin for autos, “Mexico clearly had to look for flexibilities because Canada was relatively comfortable with the original (U.S.) proposal,” the source said.

The rules governing regional content in automobile manufacturing have been one of the biggest sticking points between the two sides.

The United States and Mexico are close to a deal to increase North American automotive content thresholds, with substantial requirements for content produced in high-wage areas.

That is expected to lift the regional content requirement for NAFTA-made vehicles to at least 70 percent from 62.5 percent now, industry sources say. It will also likely require that some 40 percent of the value come from high-wage locations paying at least $16 an hour, meaning the United States and Canada.

Mexican and U.S. negotiators are close to agreeing a five-year phase-in period to implement the changes, the source said.

Still, foreign automakers with U.S. plants oppose the move to raise the amount of regional content, and their objections could hamper progress at the talks.

Carmakers including Toyota, Volkswagen AG and Hyundai, wrote to trade-focused members of U.S. Congress expressing their concern.

Mexico’s Guajardo last month expressed hope that there could be a preliminary NAFTA deal by the end of August, but he has since appeared to pull back from that position.
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Large real-estate developments in India should be subject to the same scrutiny as industrial projects given their environmental impact, according to city planners and campaigners.

A proposal to redevelop parts of New Delhi that required the felling of thousands of trees recently provoked fierce protests, court petitions and night patrols to guard the trees.

While projects measuring more than 20,000 square meters require impact assessments, exemptions are often made and public hearings are never held, analysts said.

“Large construction projects have a huge environmental and social footprint, and deserve scrutiny for their impact on energy and water use, and urban infrastructure,” said Kanchi Kohli at New Delhi think tank Centre for Policy Research.

“Cities are already dealing with severe air pollution, water shortages and traffic congestion. Residents deserve a say in these projects,” she told Reuters.

Worldwide, cities occupy 2 percent of the land mass, but account for more than 70 percent of carbon dioxide emissions.

India is forecast to overtake China by 2024 as the world’s most populous country, with tens of millions of citizens cramming into already crowded cities.

As developers rush to cash in, unplanned urban sprawl is leading to congestion, flooding and more slums, analysts say.

Authorities have introduced stricter environmental laws for businesses in recent years, but analysts say they are poorly implemented in a rush to lure investors.

But it is not all one way.

Chirayu Bhatt, an urban planner at CEPT University in Ahmedabad, said large developments — be they residential or commercial — can be good for future generations even if today’s city dwellers often pay the price.

“While the costs of a project are borne by current residents, the benefits accrue to future residents — migrants, our children and grandchildren. We must recognize that,” he said.

In New Delhi, the National Green Tribunal — which decides on environmental matters — last week ordered that no trees be felled while the redevelopment case is examined.

Developers say subjecting real estate projects to the same scrutiny as large industrial developments is “not justified.”

“There are already stringent environmental clearances that are required, and measures such as rain water harvesting and sewage treatment plants have been made mandatory,” said Anuj Puri, chairman of Anarock Property Consultants.

But excluding citizens is not right, Kohli said.

“Citizens must be a part of the review process; more so now, because the drawing of ground water, the discharge of effluents, the use of public spaces affects us all.”
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Washington is prepared to impose more economic pain on Russia if it does not change its behavior, Trump administration officials said on Tuesday, as U.S. lawmakers pushed for stronger measures to counteract “malign” Russian activities.

“Though Russia’s malign activities continue, we believe its adventurism undoubtedly has been checked by the knowledge that we can bring much more economic pain to bear using our powerful range of authorities — and that we will not hesitate to do so if its conduct does not demonstrably and significantly change,” Acting Deputy Treasury Secretary Sigal Mandelker told the Senate Banking Committee.

U.S. President Donald Trump has repeatedly said he would like better ties with Moscow, but although he met Russian President Vladimir Putin last month, relations between the two countries have come under further strain.

Members of Congress, where both chambers are controlled by Trump’ fellow Republicans, have called for more action — including threatening sanctions “from hell” — to punish Russia for actions including its annexation of Crimea, involvement in Syria’s civil war and cyberattacks seeking to influence U.S. elections.

Two U.S. Senate committees held simultaneous hearings on Russia on Tuesday, where some lawmakers chastised administration officials for failing to sufficiently answer their questions, and for sending conflicting messages and doing too little to change Russian behavior.

Both Republicans and Democrats in Congress have criticized Trump, particularly after his summit with Putin in Helsinki last month, for failing to stand up to Moscow on issues including what they see as Trump’s failure to hold the Russian president accountable for Moscow’s meddling in the 2016 U.S. election.

Microsoft Corp said late Monday that hackers linked to the Kremlin sought to launch cyberattacks on the Senate and conservative American think tanks, warning of broader attacks ahead of congressional elections in November. 

The Kremlin rejected the Microsoft allegations and said there was no evidence to support them. Moscow has repeatedly denied attempting to influence U.S. elections, including the 2016 presidential vote that brought Trump into office. U.S. intelligence agencies have concluded that Russia interfered in the 2016 campaign, seeking to tilt the vote in Trump’s favor.

Cost to Russia

U.S. administration officials told the Senate hearings that existing sanctions were having an effect on Russia’s economy, despite continuing behavior that concerns Washington.

Separately, the Treasury Department imposed new sanctions on two Russians, one Russian company and one Slovakian firm over actions it said helped another Russian company avoid sanctions over cyber-related activities.

The United States also announced sanctions on Russian shipping over the transfer of refined petroleum products to North Korea in violation of U.N. restrictions.

Assistant Secretary of State Wess Mitchell told the Foreign Relations Committee that concern about sanctions has cost Russia $8 to $10 billion in arms deals. Without the American measures, Moscow’s behavior would be further “off the charts,” Mitchell said.

Mitchell also said foreign direct investment in Russia has fallen by 80 percent since 2013, “which is a pretty stunning number.”

“I think this administration has been clear that we are prepared to take additional steps,” Mitchell said. “There is an escalatory ladder to sanctions. We are aware of what additional steps would be needed to make an even bigger point.”

Marshall Billingslea, assistant Treasury secretary for terrorism financing, told the Foreign Relations panel it was important that European allies, particularly in eastern Europe, do more to combat money laundering.

“There is an enormous amount of money that is still being exfiltrated from Russia by both organized crime and cronies surrounding Putin,” Billingslea said.

In an interview with Reuters on Monday, Trump said he would only consider lifting sanctions against Russia if it were to do something positive for the United States, for instance in Syria or in Ukraine.
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South Africa’s state-owned Land Bank said on Monday a plan to allow the state to seize land without compensation could trigger defaults that could cost the government 41 billion rand ($2.8 billion) if the bank’s rights as a creditor are not protected.

Land Bank is a specialist bank providing financial services to the commercial farming sector and other agricultural businesses.

President Cyril Ramaphosa announced on Aug. 1 that the ruling African National Congress (ANC) is forging ahead with plans to change the constitution to allow the expropriation of land without compensation, as whites still own most of South Africa’s land more than two decades after the end of apartheid.

Land Bank Chairman Arthur Moloto said in the company’s 2018 annual report that the bank has approximately 9 billion rand of debt, which includes a standard market clause on “expropriation” as an event of default.

Moloto said if expropriation without compensation were to materialize without protection of the bank’s rights as a creditor, it would be required to repay 9 billion rand immediately.

“A cross default clause would be triggered should we fail to pay when these debts fall due because of inadequate liquidity or lack of alternative sources of funding,” Moloto said.

“This would make our entire 41 billion rand funding portfolio due and payable immediately, which we would not be able to settle. Consequently, government intervention would be required to settle our lenders.”

Moloto said the bank was generally funded by the local debt and capital markets, and more recently international multilateral institutions such as the African Development Bank and World Bank.

“A poorly executed expropriation without compensation could result in the main sources of funding drying up as investors might not be willing to continue funding Land Bank in particular, or agriculture in general,” he said.

Some investors are concerned that the ANC’s reforms will result in white farmers being stripped of land to the detriment of the economy, as happened in Zimbabwe, although Ramaphosa has repeatedly said any changes will not compromise food security or economic growth.

Since the end of apartheid in 1994, the ANC has followed a “willing-seller, willing-buyer” model under which the government buys white-owned farms for redistribution to blacks. Progress has been slow.

($1 = 14.6363 rand)
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The bull market in U.S. stocks is about to become the longest in history.

 

If stocks don’t drop significantly by the close of trading Wednesday, the bull market that began in March 2009 will have lasted nine years, five months and 13 days, a record that few would have predicted when the market struggled to find its footing after a 50 percent plunge during the financial crisis.

 

The long rally has added trillions of dollars to household wealth, helping the economy, and stands as a testament to the ability of large U.S. companies to squeeze out profits in tough times and confidence among investors as they shrugged off repeated crises and kept buying.

 

“There was no manic trading, there was no panic buying or selling,” said Jack Ablin, chief investment officer of Cresset Wealth Advisors. “It’s been pretty steady.”

 

The question now is when the rally will end. The Federal Reserve is undoing many of the stimulative measures that supported the market, including keeping interest rates near zero. There are also mounting threats to global trade that have unsettled investors.

 

For such an enduring bull market, it shares little of the hallmarks of prior rallies.

 

Unlike earlier rallies, individual investors have largely sat out after getting burned by two crashes in less than a decade. Trading has been lackluster, with few shares exchanging hands each day. Private companies have shown little enthusiasm, too, with fewer selling stock in initial public offerings than in previous bull runs.

 

Yet this bull market has been remarkably resilient. After several blows that might have killed off a less robust rally — fears of a eurozone collapse, plunging oil prices, a U.S. credit downgrade, President Donald Trump’s trade fights — investors soon returned to buying, avoiding a 20 percent drop in stocks that by common definition marks the end of bull markets.

 

“I don’t think anyone could have predicted the length and strength of this bull market,” said David Lebovitz, a global market strategist at JPMorgan Asset Management.

One of the market’s biggest winners in recent years, Facebook, wasn’t even publicly traded when the bull market began. Facebook’s huge run-up of more than 350 percent since going public in 2012, Apple’s steady march to $1 trillion in value, and huge gains by other tech companies like Netflix have helped push the broader market higher.

 

Since the rally officially began on March 9, 2009, the Standard and Poor’s 500 has risen 321 percent. In the 1990s bull market, the current record holder for the longest, stocks rose 417 percent.

 

From the start, the Federal Reserve was a big force pushing markets higher. It slashed short-term borrowing rates to zero, then began buying trillions of dollars of bonds to push longer-term rates down, too. Investors frustrated with tiny interest payments on bonds felt they had no alternative but to pile into stocks.

 

Companies moved fast to adapt to the post-financial-crisis world of sluggish U.S. growth.

 

They slashed costs and kept wage growth low, squeezing profits out of barely growing sales. They bought back huge amounts of their own stock and expanded their sales overseas, particularly to China’s booming economy. Profit margins reached record levels, as wages sunk to record lows as measured against the size of economy.

 

“What people missed was how quickly U.S. corporations were restructuring and right-sizing themselves to regain profitability,” said money manager James Abate, who publicly urged investors to start buying stocks in early 2009 when most were dumping them. “It was really a catalyst for turning things around.”

 

China’s surging growth helped the market, too. Its boom drove up the price of oil and other commodities, helping to lift stocks of U.S. natural resource companies — for a while at least.

 

Then came a downgrade of the U.S. credit rating in August 2011, which caused stocks to swoon, and 2013 brought another fall as Fed Chairman Ben Bernanke talked of easing off stimulus policies. In the second half 2014, oil plunged 50 percent, which rattled investors again.

 

Profits started falling the next year, but investors kept their nerve and didn’t sell and waited for profits to rise again. In 2016, stocks gained 10 percent then jumped 19 percent the next year. Since the start of 2018, they have risen 6.6 percent, boosted by surging profits following the massive cut in corporate tax rates earlier this year.

 

Several dangers threaten the rally.

 

The Fed has hiked its benchmark lending rate twice since January, and is expected raise it twice more by the end of the year.

 

Stocks could suffer as higher interest on bonds convinces investors to start shifting money into this safer alternative. Higher rates also increase costs for business and make expanding operations more difficult.

More worrisome, rising rates can trigger recessions, which often kill bull markets. Three of the past five recessions were preceded by rate hikes by the Federal Reserve.

 

With stocks richly priced, there isn’t much room for things to go wrong.

 

The prices investors are paying per share for companies are 2.2 times revenue per share, near historic peaks. And prices compared to long-term earnings are much higher than in 2007 before the market crashed.

 

For all its longevity and gains, the final verdict on the bull market won’t be known until it ends.

 

The financial crisis of 2008 that ended the last bull market laid bare just how much debt and risk-taking had fueled gains in the previous seven years. The dot-com bust that ended the 90s rally showed how reckless investors had been.

 

This time, many of the unanswered questions concern the Fed’s monetary stimulus.

 

How much did it help boost stocks, and thus the broader economy? Will the gains it helped manufacture prove ephemeral? What are the long-term costs of its unprecedented economic rescue effort as it faces the tricky task of unwinding its stimulus program?

 

Another question is the wisdom of so many buybacks. Companies have spent trillions in recent years repurchasing their own stock, which has helped lift prices in the short term but does nothing to expand operations, train workers and generally improve their business. Many of the purchases were made with borrowed money, adding to already sizable debts.

 

Abate, the money manager who urged people to buy early in 2009, says stock prices are too high given the threat to profits from higher borrowing costs as rates climb, higher input costs from Trump’s tariffs and, possibly, bigger raises for workers in the future.

 

“Profits are peaking and valuations are extreme,” said Abate, chief investment officer of Centre Asset Management.

 

His prediction is that stocks will plunge by the end of the year and a bear market will begin.

 

Others are more optimistic.

 

JPMorgan’s Lebovitz takes comfort in the fact investors have been skeptical of the rally all along, which he says has allowed none of the excesses of prior bull markets to build up.

 

“This is a bull market that people love to hate,” he said. “Blind exuberance hasn’t been a characteristic.”

 

Asked how much longer the rally will last, he said: “At least another year, but two might be a bit of stretch.”
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The space company of billionaire Microsoft co-founder Paul Allen on Monday unveiled details of medium-lift rockets and a reusable space cargo plane it is developing, injecting more competition into the lucrative launch services market.

With its rockets, Allen’s Stratolaunch Systems is trying to cash in on higher demand in the coming years for vessels that can put satellites into orbit. But his vehicles will have to compete domestically with other space entrepreneurs and industry stalwarts such as Elon Musk’s SpaceX and United Launch Alliance — a partnership between Boeing and Lockheed Martin.

Seattle-based Stratolaunch, founded by Allen in 2011, said in a news release its launch vehicles will make satellite deployment “as easy as booking an airline flight,” though the first rocket launch is not slated until 2020 at the earliest and the massive airplane it is building to deploy the rockets is  still in pre-flight testing.

Rather than blasting off from a launch pad, Stratolaunch’s rockets will drop at high altitude from underneath the company’s six-engine, twin-fuselage airplane — the largest ever built by wingspan.

That launch method is similar to the one being developed by billionaire Richard Branson’s Virgin Galactic.

Stratolaunch’s plane is designed to carry a rocket and payload with a combined weight of up to 550,000 pounds (250,000 kg), on par with what a SpaceX Falcon 9 rocket can launch from the ground.

Timing is everything

Around 800 small satellites are expected to launch annually beginning around 2020, more than double the annual average over the past decade, according to Teal Group space analyst Marco Caceres.

Stratolaunch announced plans for the plane years ago with the goal of flying Northrop Grumman Corp’s small-payload Pegasus rocket in 2020, and some in the aerospace industry expected Stratolaunch to eventually make its own rockets after partnerships with other manufacturers fell through.

Stratolaunch said its new medium-lift rocket with a capacity of about 3,400 kg (7,500 pounds) would fly as early as 2022. It said it was in the early stages of developing a variant with a payload capacity of 6,000 kg. It made no mention of launch customers and declined to say how much it would cost to develop its space vehicles.

Stratolaunch acknowledged it was designing a reusable space plane to carry cargo to and from Earth and a follow-on variant could carry people.
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Cuba’s decision to change its constitution and allow private property ownership has been shrugged off by small farmers, who say the island will never feed itself without far broader reform of state-run agriculture.

Economists would expect farmers to welcome the shift towards private property after decades of strict government control left the island dependent on food imports and farmers unable to earn a decent living.

And though older Cubans are wary of change, younger farmers have indeed welcomed the recent reforms to recognize private property ownership, even if few expect huge dividends.

With 30 hectares of well-maintained guava trees, sweet potato plants and concrete pig pens, Alexei Gonzales has a deep desire to buy the farmland he currently rents from the state.

But a complex web of bureaucracy — be it currency controls, fuel shortages or a lack of private credit — mean Gonzales and six other farmers who spoke with the Thomson Reuters Foundation do not expect to reap big gains from owning their own land.

“Making it easier to buy land won’t really change much if I can’t get diesel,” said 41-year-old Gonzales, pointing to his idle Soviet-made tractor. “They (lawmakers) give lots of speeches but nothing changes… My whole life is working on the land, and I have nothing to show for it.”

On July 22, Cuba’s government voted in favor of a draft for a new constitution that includes the right to own private property.  The reforms were presided over by Miguel Diaz-Canel, who became Cuba’s president in April, replacing brothers Fidel and Raul Castro, who had governed the island since 1959.

The changes are part of a broader shift as Cuba tries to woo foreign investment, boost growth and cut poverty, all while keeping political control in the hands of a single party.

Rich Soil, Slim Pickings

Despite rich soil and 20 percent of its population working in agriculture, Cuba imports more than 60 percent of its food, at an annual cost of about $2 billion.

Cubans, who on average earn about $30 a month, receive a monthly package of subsidized food from the state, including rice, beans, eggs and milk for young children.

To make up for shortfalls at state-run stores – which worsened after the collapse of its Soviet benefactor – Cubans were encouraged to grow urban gardens or cultivate small plots of land for personal consumption.

Today, Cubans can buy food from market stalls, but workers who earn the minimum government salary often cannot afford the bananas, plantain and pork sold in the private sector.

Prior to the constitutional changes approved by lawmakers last month, the state owned about 80 percent of Cuba’s farmland, leasing most of it to farmers and cooperatives.

The rest is owned by small farmers whose families received allotments from the government after Cuba’s 1959 revolution.

With sluggish economic growth, and renewed tensions with Washington hampering foreign investment, the government is eager to wean Cuba’s 11 people million off costly food imports.

The constitutional change allowing for private land ownership still needs to pass a referendum, to be held some time in coming months. The draft document will be submitted for public consultations and the final document, which could include changes, will then be put to a national referendum.

The reforms will help food production but private property rights alone will not give agricultural output a substantial boost, said Mario Gonzalez-Corzo, an economics professor at City University of New York, whose family own farms in Cuba.

In other countries, farmers can use their land as collateral for loans to buy equipment, seeds or fertilizer.

“Private ownership does not mean you can use land as collateral: in Cuba, there is no such thing as a private bank,” Gonzalez-Corzo said, so the reforms will not make it easier for farmers to buy the fuel or fertilizer they crave.

Price controls on how much farmers get for their products and other strict rules compound the inefficiencies, he added.

“The government has extensive control over agriculture, which creates massive distortions.”

Fallow Fields

Yasmany Falcon Bacallao farms 26 hectares in Matanzas, Cuba’s second largest province and home to the tourist hotspot of Varadero.

Living the inefficiencies on a daily basis, he supports private property reforms, but is not optimistic they will change his daily reality in the fields.

Much of the land inherited from family members lies fallow; he cannot find workers willing to accept $20 per month to toil in the fields or enough diesel to run his farm machinery.

Bacallao sells most of his produce to a government agency, “but often they don’t even have boxes for the mangoes when they arrive, so I can’t sell anything,’ the 37-year-old said.

Cuba’s National Association of Small Farmers, a government-linked body responsible for agriculture, declined requests for interviews or additional information about the changes.

The United Nations Food and Agriculture Organization in Cuba declined to comment on the proposed reforms, underlining the sensitivity of the issue in the socialist state.

Generational Shift

While young farmers tend to support greater private property rights, in principle at least, older Cubans are skeptical.

“I don’t want to see the big time selling of land,” said 82-year-old Miguel Barroz Lozano, sitting on the porch of the farmhouse he inherited in 1962.

“I was here before the revolution and it’s better for farmers now,” said the fruit grower, recounting how his father had toiled on a plantation owned by a rich, absentee owner.

Unease about possible exploitation has caused the government to move slowly with reform, said John Finn, a professor who studies Cuban agriculture at Christopher Newport University in the U.S. state of Virginia.

“Land reform was massively important for the ideology of the revolution,” Finn said. “They (officials) are trying to maintain the broad structures of a socialist economy, while harvesting the obvious power of entrepreneurship.”
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Foreign-brand automakers with U.S. plants do not support Trump administration rules to raise the amount of local content in North American-made vehicles, a group representing companies including Toyota, Volkswagen AG and Hyundai has told key U.S. lawmakers.

Talks between Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer are due to resume on Tuesday in Washington to try to resolve remaining bilateral issues so that Canada, which has been sidelined for weeks from the negotiations, can return to the bargaining table.

The automakers’ position was in a previously unreported Aug. 16 letter from their “Here for America” group to top trade-focused members of Congress. The letter could raise resistance to a revamped North American Free Trade Agreement from lawmakers in southern states, where foreign manufacturers have built auto plants.

“We remain concerned that, without further clarifications, assurances and modifications, many of those companies producing vehicles in multiple states will not be in a position to support legislation implementing a NAFTA 2.0,” the group said in the letter, signed by John Bozzella, president of the Association of Global Automakers.

Automotive experts have said that some foreign brand automakers with smaller North American manufacturing footprints and fewer U.S. research and development staff may have difficulty meeting the more stringent content requirements for years.

The group said its members, which also include Honda, Daimler, BMW, Nissan, Kia Motors, Subaru, and Volvo, a unit of China’s Geely Automobile Holdings , account for nearly 50 percent of U.S. vehicle production.

Detroit supportive

At the same time, the American Automotive Policy Council, which represents Detroit’s Big Three automakers is “encouraged by the direction of the discussions,” said Matt Blunt, who heads the trade group.

“We share the administration’s overall goals of strengthening U.S. auto manufacturing and creating jobs and given the importance of NAFTA to U.S. industry we urge the negotiators to quickly complete the negotiations,” added Blunt, whose group represents General Motors, Ford and Fiat Chrysler.

The United States and Mexico are closing in on a bilateral deal on autos that would lift the requirement for North American content in regionally made vehicles to at least 70 percent from the current 62.5 percent.

The deal is expected to require that some 40 percent of  the value come from high wage locations paying at least $16 an hour, meaning the United States and Canada, a Mexican source close to the talks told Reuters.

USTR officials have been meeting in recent days with individual automakers to secure support for potential changes, according to auto industry sources.

A USTR spokeswoman declined comment.

U.S. President Donald Trump, who launched the renegotiation of the 1994 pact a year ago, has said he wants the reworked deal to bring manufacturing jobs back to the United States, particularly in autos and auto parts.

Other key unresolved issues include the phase-in time for the new automotive rules to take effect and whether the U.S. demand for a “sunset” clause that forces a renegotiation every five years is adopted, making long-term investment decisions more difficult.

The letter from the ad-hoc “Here for America” group also raised concerns that national security tariffs on autos, auto parts, steel and aluminum would undermine the benefit of a NAFTA agreement.
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There’ll be no dancing in the moonlit streets of Athens.

For all the official pronouncements that Greece’s eight-year crisis will be over as its third and last bailout program ends Monday, few Greeks see cause for celebration.

 

Undeniably, the economy is once again growing modestly, state finances are improving, exports are up and unemployment is down from a ghastly 28 percent high.

 

But one in five Greeks are still unemployed, with few receiving state benefits, and underpaid drudgery is the norm in new jobs. The average income has dropped by more than a third, and taxes have rocketed. Clinical depression is rife, suicides are up, and hundreds of thousands of skilled workers have flitted abroad.

 

After the end of the bailout Monday, Greece will get no new loans and will not be asked for new reforms. But the government has agreed to a timetable of savings so strict as to plague a future generation and a half: For every year over the next four decades, governments must make more than they spend while ensuring that the economy — that shrank by a quarter since 2009 — also expands at a smart rate.

 

“Personally, I can see no hope for me in the coming years,” says Paraskevi Kolliabi, 62, who lives on a widow’s pension and helps out in her son’s central Athens silver workshop. “Everything looks black to me.”

 

Pensioners face pre-agreed new income cuts next year, while a further expansion of the tax base is due in 2020. But tax collection remains scrappy in a country where compliance was never strong, and the taxman’s increasingly extravagant demands, coupled with often slapdash policing, only strengthened the sense of injustice.

 

“My pension has been cut about thirty percent since the start of the crisis,” Kolliabi said. “I have never in my life gone through such [financial] hardship as during the past two years. There were entire days when not a single customer would enter” the shop in the Monastiraki district.

 

Greece’s once cheerfully spendthrift middle class, whose rapid growth before the state finances imploded drove a consumption-fuelled economy, has been squeezed hard by intense taxation, mortgages from the bygone days of easy credit, and job losses.

 

“What I see is that the rich are becoming richer and the poor poorer,” Kolliabi said. “We used to cater to the middle class, and the middle class is dead, they can’t make ends meet.”

 

Following one of the latest rounds of cutbacks, her son, Panagiotis, now sees more than 60 percent of his income gobbled up by taxes, pension and social security contributions. That kills any ambition for growing the business.

 

“The prospects for after Aug. 20 are not good,” he said. “There’s no way I will be able to make an investment… to expand my business.”

 

In the northern city of Thessaloniki, Christos Marmarinos, 55, had to close his clothes manufacturing unit after 25 years in business due to lack of customers. Instead, he plunged what funds he had into something altogether different, a cafeteria and grocery store.

 

“We found this way out, and employ ten people,” he said. But Greece needs more than cafeterias if the economy is to pick up again and modernize, he says. “We need real investments in manufacturing.”

 

Part of the sufferings of Greece’s private sector are due to disastrous government attempts in the panicky first months of the crisis to shield from cutbacks the bloated public sector, which has traditionally been the political fiefdom and key source of votes for any ruling party.

 

But while considerably smaller and poorer than before the crisis, the public sector remains largely ineffective and disgruntled, providing ever shoddier services.

 

The one area of the economy that’s undoubtedly flourishing is tourism, contributing some 20 percent of GDP, with officials projecting a record-high 32 million arrivals this year. Greeks, however, are finding it increasingly expensive to go on holiday in their own country, while a boom in short-term rentals in residential districts of Athens has driven rents beyond the reach of many locals.

 

Even the governing coalition, which swept to power in 2015 promising to instantly end austerity and cancel Greece’s debt — only to reverse course and sign a new tough bailout program — is low-key about the end of the bailout era.

 

“We’re not planning any parties,” said Costas Zahariadis, an official in the dominant leftwing Syriza party. “We don’t believe we should start celebrating as if a large section of Greek society didn’t have serious financial problems. But of course we won’t be shedding tears over Greece leaving the bailout era.”

 

Financial analyst Manos Chatzidakis, who is head of research at Beta Securities, says much has been done over the past eight years, although the tax and judiciary systems need further work. He said that if future governments stick to agreed reforms and fiscal policy then gradually returning confidence will allow Greece to sell its bonds at affordable rates — even if investors initially demand high returns — and attract investment.

 

The ability to tap bond markets is vital, because after the bailout program, Greece will have to finance itself, albeit initially assisted by a substantial cash buffer.

 

“I think it’s all a question of commitment to the bailout program, to the privatizations, to everything that has been agreed” with Greece’s creditors, he said. “I’m definitely more optimistic than in the past. Things had reached a point [in 2015] where they couldn’t get worse.”

 

Hatzidakis stressed that many of the bailout reforms were “unprecedented” for Greece, which took a long time to understand and implement them.

 

“So we should not be strict and expect everything to happen fast,” he said. “It took time to reach this point and a lot of effort, which I think is starting to bear fruit.”

 
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Iran’s oil minister says France’s oil giant Total SA has pulled out of Iran after cancelling its $5 billion, 20-year agreement to develop the country’s massive South Pars offshore natural gas field over renewed U.S. sanctions.

The parliament’s website ICANA.ir quoted Oil Minister Bijan Zanganeh as saying on Monday that since Total first announced its decision a while ago, Iran has been in the process of “looking for an alternative” to Total. He didn’t elaborate.

 

There was no immediate comment from TotaI.

 

Earlier this month, Iran said China’s state-owned petroleum corporation took a majority 80 percent share of the project. CNPC originally had some 30 percent of shares in the project.

 

The renewed U.S. sanctions took effect in August, after America’s pullout from the nuclear deal in May.

 

 
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Vietnam is trying to get a grip on inflation that might otherwise threaten its quick economic growth again as it did a decade ago, analysts and domestic media say.

Consumer prices in June were 4.67 percent higher than in the same month last year following an increase of 3.29 percent in the first half of 2018, the Vietnamese General Statistics Office said. The legislature had set a target of no more than 4 percent.

Prices of commodities, including crude oil, are contributing heavily to inflation, and a fuel tax proposed for October would exacerbate it, the VnExpress International news website said. Currency weakness, a rising middle class and credit growth are further raising prices.

“I think generally the trend has been upward and that’s just a result of increased spending power on behalf of Vietnamese people,” said Maxfield Brown, senior associate with the business consultancy Dezan Shira & Associates in Ho Chi Minh City.

Inflation of more than 20 percent in 2008 throttled Vietnamese economic growth over the following three years. The target of 4 percent inflation is aimed at stopping a repeat.

“It’s something to watch,” Brown said. “Obviously, if things go way, way high, then that’s a problem. But that’s not what’s happening right now.”

Noticeable change in prices

Consumers notice the higher fuel prices when pumping gas for cars and scooters. Some also found that rice prices didn’t fall as expected after a 10 percent hike before the major annual Tet holiday in February this year, said Vietnamese consumer Phuong Hong, communications director with a tech firm in Ho Chi Minh City.

Electricity costs more every year, she added, while salaries do not necessarily help common people afford the increases.

“Normally the rate of price rising is always too much and always higher than the rate we’ve got from salary support,” she said.

Vietnam raised its minimum wage 6.5 percent this year with plans for another 5.3 percent in 2019. About a third of the 93 million Vietnamese will be middle-class or above by 2020, the Boston Consulting Group estimates. Rising wealth reflects creation of jobs, a function of economic growth driven by manufacturing.

The country faces pressure to keep wages in check as low labor costs drive foreign investors to the country from around Asia, as well as a few giant American firms.

Vietnam’s GDP in the first half of this year grew about 7 percent after several years near 6 percent. The Asian Development Bank estimates 7.1 percent growth for the full year.

Risk of fallout, government follow-up

Last year “marked a breakthrough” in government work to manage prices of electricity, fuel, formula milk and healthcare fees, VnExpress International said.

Government agencies “should closely monitor price movements,” take a lead in readying goods for Tet so prices stay controlled and “set out rational measures” to stabilize the market, the Communist Party of Vietnam’s website Nhan Dan said. Last month legislators were reexamining the fuel tax.

Officials are on guard for a relapse of inflation in 2008, which followed an influx of foreign currency into the export-reliant country due to the demand for imports, analysts say. Inflation then rippled into the broader economy until 2011.

Prices have been rising now since 2015.

The inflation of 2008 prompted hundreds of wildcat labor strikes by workers who wanted more pay. Prices, strikes and a devalued Vietnamese currency then took the annual economic growth rate down to 5.3 percent before it began to rebound.

Those pressures sparked a fall in pledges for foreign direct investment – the likes of factories that make garments, furniture and car parts. Pledges fell in 2011 to $14.7 billion, from $19.9 billion in 2010, and the amount of actual foreign direct investment plummeted 35 percent that year.

Vietnam’s growth is one of the fastest in Asia today.

Analysts expect Vietnam to weather the current price hikes without the blowup of 10 years ago but warn against currency deflation that has swept other parts of Asia – partly because of the Sino-U.S. trade war. Weaker currencies usually push prices up.

“At the moment we don’t expect really a ramp-up of inflationary pressure,” said Marie Diron, managing director with Moody’s Investors Service in Singapore. But, she said, “with the weakening of the currency, inflation is likely to go up a bit further in Vietnam and other countries.”
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“For the first time since early 2010, Greece can stand on its own feet,” the European Stability Mechanism (ESM) rescue fund said as Athens exited its final, three-year international bailout program on Monday.

The ESM allocated about $71 billion over the past three years, after an agreement was reached in August 2015 to help the country cope with fallout from an ongoing debt crisis.

“Today we can safely conclude the ESM program with no more follow-up rescue programs,” Mario Centeno, the chairman of the ESM’s board of governors, said in a statement. “This was possible thanks to the extraordinary effort of the Greek people, the good cooperation with the current Greek government and the support of European partners through loans and debt relief.”

In 2010, Greece was declared at risk of default after struggling with massive debt, loss of investment and huge unemployment. Overall, nearly $300 billion in emergency loans were provided in three consecutive bailout packages from a European Union bailout fund and the International Monetary Fund (IMF). In exchange, Athens was required to put in place severe austerity-based measures and reforms.

The completion of the loan program is a major accomplishment for Greece, but the country still faces an uphill battle to regain its economic stability.

 

The office of Prime Minister Alexis Tsipras described the final bailout loan last week as the “last act in the drama. Now a new page of progress, justice and growth can be turned.”

“Greece has managed to stand on her feet again,” his office said.

 

Economic growth in Greece is slowly growing again, tourism is up nearly 17 percent in Athens this year, and once-record levels of joblessness are finally receding.

 

However, the country still faces massive challenges, including weak banks, the highest debt load in the European Union at 180 percent of GDP, and the loss of about a half-million mostly younger Greeks to Europe’s wealthier neighbors. Greece will also need to continue to repay its international loans until 2060.

The country’s three international bailouts took Europe to the brink of crisis.

 

The financial troubles exposed dangers in the European Union’s common currency and threatened to break the bloc apart. The large debt that remains in Greece and an even larger debt in Italy continue to be a financial danger to the EU.

The bailouts also led to regular and sometimes violent demonstrations in Athens by citizens angry at the government’s budget measures required by international lenders in return for the bailouts.

 

While Greece has begun to make economic progress, economics say the bulk of the austerity measures will likely need to remain in place for many years for the country to tackle its massive debt.

Some international economists have called for part of Greece’s loans to be written off in order for Greece to keep its ballooning debt payments in check. However, any kind of loan forgiveness would be a tough sell in Germany where the initially bailouts were unpopular.

The austerity measures included massive tax hikes as high as 70 percent of earned income and pension cuts that pushed nearly half of Greece’s elderly population below the poverty line.

Pensioner Yorgos Vagelakos, 81, told Reuters that five years ago he would go to his local market with 20 euros in his pocket, while today, he has just 2 euros. He says for him, the bailout will never end.

“It’s very often that just like today, I struggle, because I see all the produce on display at the market and I want to buy things, but when I don’t have even a cent in my pocket, I get really sad,” Vagelakos said.
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Americans drink a lot of beer, according to the Beer Institute, almost 100 liters for every drinking age American each year. That’s a lot of malted barley, the main ingredient that gives beer its alcoholic kick. Even smaller craft breweries in the U.S. alone, throw out some two million tons of the spent grain each year into landfills. But one entrepreneur has found other uses for all that wasted grain. She’s recycling spent barley into flour. VOA’s Jill Craig has more.
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Uncertainty reigned in Venezuela Saturday after President Nicolas Maduro unveiled a major economic reform plan aimed at halting the spiraling hyperinflation that has thrown the oil-rich, cash-poor South American country into chaos.

Ahead of a major currency overhaul Monday, when Caracas will start issuing new banknotes after slashing five zeroes off the crippled bolivar, Maduro detailed other measures he hopes will pull Venezuela out of crisis.

Those measures include a massive minimum wage hike, the fifth so far this year.

But analysts say the radical overhaul could only serve to make matters worse.

“There will be a lot of confusion in the next few days, for consumers and the private sector,” said the director of the Ecoanalitica consultancy, Asdrubal Oliveros. “It’s a chaotic scenario.”

​‘Pure lie’

The embattled Maduro, a former bus driver and union leader, said the country needed to show “fiscal discipline” and stop the excessive money printing that has been regular practice in recent years.

The new currency, the sovereign bolivar — to distinguish from the current, and ironically named, strong bolivar — will be anchored to the country’s widely discredited cryptocurrency, the petro.

Each petro will be worth about $60, based on the price of a barrel of Venezuela’s oil. In the new currency, that will be 3,600 sovereign bolivars, signaling a massive devaluation.

In turn, the minimum wage will be fixed at half a petro (1,800 sovereign bolivars), starting Monday. That is about $28, more than 34 times the previous level of less than a dollar at the prevailing black market rate.

Maduro also said the country would have one fluctuating official exchange rate, also anchored to the petro, without saying what the starting level would be.

As it stands, the monthly minimum wage, devastated by inflation and the aggressive devaluation of the bolivar, is still not enough to buy a kilo of meat.

In the capital Caracas, residents were skeptical about the new measures.

“Everything will stay the same, prices will continue to rise,” 39-year-old Bruno Choy, who runs a street food stand, told AFP.

Angel Arias, a 67-year-old retiree, dubbed the new currency a “pure lie!”

1 million percent inflation

The International Monetary Fund predicts inflation will hit a staggering 1 million percent this year in Venezuela, now in a fourth year of recession, hamstrung by shortages of basic goods and crippled by paralyzed public services.

Maduro blames the country’s financial woes on opposition plots and American sanctions, but admits that the government will “learn as we go along” when it comes to the currency redenomination.

His government pushed back Saturday against criticism of the economic reform plan.

“Don’t pay attention to naysayers,” Information Minister Jorge Rodriguez said. “With oil income, with taxes and income from gasoline price hikes … we’ll be able to fund our program.”

Electronic transactions are set to be suspended from Sunday to facilitate the introduction of the new notes.

Economy in turmoil

Oil production accounts for 96 percent of Venezuela’s revenue, but that has slumped to a 30-year low of 1.4 million barrels a day, compared to its record high of 3.2 million 10 years ago.

The fiscal deficit is almost 20 percent of GDP while Venezuela struggles with an external debt of $150 billion.

Venezuela launched the petro in a bid for liquidity to try to circumvent US sanctions that have all but stamped out international financing.

But there’s a good reason the redenomination hasn’t generated renewed hope or investor confidence: Venezuela has done this before.

Maduro’s predecessor Hugo Chavez stripped three zeroes off the bolivar in 2008, but that failed to prevent hyperinflation.

Also, Cryptocurrency rating site ICOindex.com has branded the petro a scam, and the U.S. has banned its nationals from trading in it.
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A budding trade war between the U.S. and Turkey over a detained American pastor is having global consequences. A sharp drop in Turkey’s lira, inflation and the threat of loan defaults, could drag down other economies, particularly in emerging markets. Turkey’s troubles are causing ripple effects in countries as far away as Argentina and Indonesia, while weighing on Asian currency rates and triggering currency fluctuations. VOA’s Diplomatic Correspondent Cindy Saine reports from Washington.
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