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Crisis-hit Volkswagen scraps German job protection deal

By - Sep 10,2024 - Last updated at Sep 10,2024

FRANKFURT, Germany — Volkswagen on Tuesday axed an agreement protecting jobs in Germany that had been in place three decades, as the ailing auto titan pushes ahead with a controversial cost-cutting plan.

Europe's biggest carmaker said it had officially notified unions about the end of the deal, whose current version guaranteed jobs at German plants until 2029.

Even after the deal's termination, jobs are still protected until the end of June next year.

"We must put Volkswagen in a position to reduce costs in Germany to a competitive level in order to invest in new technologies and new products from our own resources," said VW in an internal memo.

It called for talks with employee representatives to secure the "long-term competitiveness" of Volkswagen, whose brands range from Porsche and Audi to Skoda and Seat.

Volkswagen made the bombshell announcement last week that it was considering the unprecedented step of closing factories in Germany, where it employs about 300,000 people, for the first time in its 87-year history.

The group is battling high manufacturing costs in Germany, a difficult transition to electric vehicles, as well as fierce competition in key market China from homegrown rivals.

VW had already flagged earlier that a series of agreements with employee representatives would be axed. But Tuesday's move nevertheless sets the stage for a tough showdown with workers.

Daniela Cavallo, chairwoman of VW's powerful works council, vowed to put up "fierce resistance to this historic attack on our jobs. With us, there will be no layoffs".

After VW announced possible factory closures in Germany, thousands protested at the group's historic Wolfsburg headquarters last week as executives sought to justify the plans.

The trouble at Volkswagen has also come as a heavy blow to Chancellor Olaf Scholz's government at a time the domestic economy was already struggling.

Spain's Sanchez urges negotiated solution to China-EU trade tensions

By - Sep 10,2024 - Last updated at Sep 10,2024

Spain's Prime Minister Pedro Sanchez talks with attendees after the inauguration of China's second Cervantes Institute in Shanghai on Tuesday (AFP photo)

SHANGHAI — Spanish Prime Minister Pedro Sanchez called for "a negotiated solution" at the World Trade Organisation (WTO) to end a stand-off between Beijing and the European Union.

Sanchez's visit to China has seen him meet top officials including President Xi Jinping and call for "dialogue and cooperation" with the world's second largest economy.

The trip comes against the backdrop of mounting trade tensions between the European Union and China, primarily over Beijing's subsidies for its electric vehicles sector.

Speaking at the inauguration of the Spain-China Business Forum in economic powerhouse city Shanghai, Sanchez called for "a European Union and a China open to the world, beyond geopolitical and economic tensions".

"That's why we are betting on honest dialogue to solve existing tensions, that result in large part from the imposition of tariffs on Chinese electric vehicles," he added.

"And what do we propose from Spain? A solution negotiated and agreed in the WTO framework, that contributes to developing balanced and fair and avoids commercial escalation that benefits no-one," Sanchez said.

The European Commission, which oversees the bloc's trade policy, announced last month that it planned to impose five-year import duties of up to 36 per cent on electric vehicles imported from China.

In China's capital Monday, Sanchez called for Madrid and Beijing to defend what he called a "fair trade order".

"We must work together to resolve differences through negotiation, in a spirit of dialogue and collaboration, and within multilateral frameworks," he wrote on social media after meeting President Xi.

Lebanon judge orders arrest of ex-central bank chief: official

By - Sep 09,2024 - Last updated at Sep 09,2024

Protesters lift placards during a rally outside the Palace of Justice in Beirut where Lebanon's former Central Bank chief Riad Salameh is set to attend a questioning hearing on Monday. (AFP photo)

BEIRUT, Lebanon — A Lebanese judge Monday issued an arrest warrant for ex-central bank chief Riad Salameh, a judicial official said, after the embattled former governor was questioned in an embezzlement case.

Salameh, 74, who headed the central bank for three decades, faces numerous charges including embezzlement, money laundering and tax evasion in separate probes in crisis-hit Lebanon and abroad.

The most senior Lebanese figure to be arrested in the wake of the country's dramatic economic collapse in 2019, Salameh has repeatedly denied any wrongdoing.

The investigating judge questioned Salameh for two and a half hours and "issued an arrest warrant against him", the official told AFP, requesting anonymity as they were not authorised to brief the media.

The judge scheduled another hearing Thursday to continue questioning Salameh, the official said.

The warrant, a procedural formality, ends his provisional detention and places him under formal arrest, the official added, with the measure indicating the judge's suspicions against Salameh had "strengthened".

On Tuesday last week, Lebanese authorities for the first time provisionally arrested Salameh after questioning over the alleged embezzlement of more than $40 million, another judicial had told AFP.

The official said at the time that the case was "completely separate" from others being investigated.

The following day, Lebanon's financial prosecutor initiated legal proceedings against Salameh over allegations of "embezzling" public funds, as well as "illicit enrichment and money laundering", and the case was referred to the investigating judge, the same official told AFP.

In a statement on Friday carried by Lebanon's official National News Agency, Salameh's office said he had cooperated with the Lebanese judiciary "before and after finishing his official duties" and "has continued with this cooperation since his detention".

'Thief' 

Salameh, who also has French nationality, is widely viewed as a key culprit in Lebanon's economic crash, which the World Bank has called one of the worst in recent history.

A handful of protesters gathered outside Beirut's justice palace on Monday, some trying to attack a convoy of vehicles transporting Salameh as he arrived, hitting the windows and yelling "Riad Salameh is a thief," an AFP correspondent said.

Unemployed protester Simon al-Barrak, among many Lebanese who have been unable to access their savings since late 2019, said his money had been "stolen".

"We're here in support of a clean justice system," he said, in a country known for its history of official impunity.

"It's not just Riad Salameh we want to see in prison," he added, accusing the political class broadly for the economic collapse.

After Monday's questioning, Salameh was returned to the jail where he has been detained in recent days, the first judicial official said, adding he was being held in an individual cell in "good conditions".

In May last year, Germany and France issued arrest warrants for Salameh over accusations including money laundering and fraud, though German prosecutors later cancelled their warrant, saying Salameh could no longer use his post to suppress evidence.

In August last year, the United States announced coordinated sanctions with Canada and Britain against Salameh.

Salameh, who left office at the end of July last year, has repeatedly said his wealth comes from private investment and his previous work at US investment firm Merrill Lynch.

He has defended his legacy, saying he is a "scapegoat" for Lebanon's economic collapse.

Greek PM announces plans to boost purchasing power, tackle crises

Plan includes 14% increase in minimum wage, 2.5% increase in pensions

By - Sep 08,2024 - Last updated at Sep 08,2024

Greek Prime Minister Kyriakos Mitsotakis delivers a speech during the opening of the annual Thessaloniki International Fair (TIF) in Thessaloniki, northern Greece, on Saturday (AFP photo)

ATHENS — Greek Prime Minister Kyriakos Mitsotakis has announced a new set of policies aimed at boosting citizens' purchasing power and tackling the country's housing crisis.

The measures include a 14 per cent increase in the minimum wage, a 2.5 per cent increase in pensions and a new tourist tax.

Mitsotakis vowed to bring prosperity to Greece — which in 2023 had the second lowest GDP per capita in the European Union — by 2027 during a speech at the opening of the Thessaloniki International Fair (TIF) on Saturday.

The premier referred to nine challenges facing his government, including the convergence of public and private sector wages, the green transition using cheaper energy and the mitigation of the effects of the runaway growth in tourism.

He also vowed to create an effective response to the country's declining and ageing population.

The country of 10 million people — which relies heavily on tourism — has endured a near decade-long economic crisis exacerbated by the post-pandemic recession.

Housing and food prices had soared due to sky-high inflation, which has only just begun to fall.

Average annual income in Greece was half the European average in 2023, while the minimum wage of 830 euros a month ($920) is less than half that of France.

Mitsotakis vowed to increase pensions by up to 2.5 per cent in 2025 and to gradually push up the minimum wage to 950 euros by 2027.

He also announced new incentives to boost the birth rate and tax benefits to galvanise the rental market.

A special levy on the self-employed will be gradually abolished, while the 243 million euro revenue from a windfall tax on energy companies will be distributed to vulnerable citizens.

Mitsotakis also announced a new fee for passengers disembarking from cruise ships in Greek ports and a Golden Visa scheme for foreigners investing at least 250,000 euros in start-ups.

Dutch match US export curbs on semiconductor machines

By - Sep 07,2024 - Last updated at Sep 07,2024

THE HAGUE — The Dutch government announced recently broader restrictions on exports of semiconductor-making machines produced by sector heavyweight ASML, aligning itself with US curbs on technology.

The measure, which will take effect on Saturday means ASML will be able to apply for export licences directly with the Dutch authorities instead of the US government to export the equipment outside the European Union.

The Netherlands had previously not applied restrictions on certain equipment that was under US export controls, forcing the Dutch company to request licences from US authorities.

"I've made this decision for reasons of security," Foreign Trade Minister Reinette Klever said in a statement on the measure.

"We see that technological advances have given rise to increased security risks associated with the export of this specific manufacturing equipment, especially in the current geopolitical context," Klever said.

The new restrictions will apply to "more types of equipment" on top of curbs that have been in force since September 2023, the government said.

ASML said in a statement that the measure "will harmonise the approach for issuing export licenses".

"Since this is a technical change, this announcement is not expected to have any impact on our financial outlook for 2024 or for our longer-term scenarios," the company said.

Shares in ASML were down 1.4 per cent at midday on the Amsterdam stock exchange.

The Netherlands and Japan have previously joined the United States in imposing certain export restrictions on advanced chip-making equipment.

The Dutch government said Friday the equipment can be used to produce advanced semiconductors which "in turn play a key role in advanced military applications".

"Thus, the uncontrolled export of this type of manufacturing equipment has implications for the Netherlands' security interests," the statement said.

ASML said the updated licence requirement will apply to its TWINSCAN NXT:1970i and 1980i DUV (deep ultraviolet) immersion lithography systems, which print the tiny elements of a microchip.

Dutch export licences already existed for other types of DUV systems as well as its extreme ultraviolet (EUV) lithography machines, which are used to make more advanced semiconductors.

The government said Friday it would "assess applications on a case-by-case basis, so this is not an export ban".

The Netherlands has a unique, leading position in this area. This entails certain responsibilities, which we take seriously," Klever said.

"We have proceeded in a careful and targeted manner, so as to minimise the disruption to global trade flows and value chains," she said.

The move comes a day after the United States tightened its own restrictions on certain technology.

The US Commerce Department said on Thursday it was implementing worldwide export curbs on specific types of items such as quantum computers and machines needed to make advanced semiconductor devices.

Iraqi date farmers fight drought to protect national treasure

By - Sep 07,2024 - Last updated at Sep 07,2024

Iraqi farmers climb palm trees during date harvest season in a field in Janjah village in Iraq's Al Qasim district south of Babylon on Wednesday (AFP photo)

JANAJAH, Iraq — Bare feet pressed against the rough trunk of a palm tree, his back supported by a metal and fabric harness, Ali Abed begins the climb to the dates above.

In Iraq, the date palm and its bounty are national icons, but they are being battered by drought.

Once known as the country of "30 million palm trees", Iraq's ancient date-growing culture had already suffered from upheaval, especially during the 1980-88 war with Iran, before climate change became a major threat.

In the still lush countryside of central Iraq, near Janajah village in Babylon province, hundreds of date palms stand tall and majestic, surrounded by vines and fruit trees.

During harvest season, the branches are heavy with clusters of yellow and red dates.

Rising at dawn to avoid the searing heat, harvesters climb the palms using only their upper body strength, aided by a harness and rope wrapped around the trunk.

"Last year, the orchards and the palm groves were thirsty; we almost lost them. This year, thanks to God, we had good water and a good harvest," said Abed, a 36-year-old farmer from Biramana, a village a few kilometres from Janajah.

Once at the top, they pick the ripe dates, filling baskets that are lowered to the ground and emptied into basins, which are then loaded onto lorries.

Abed noted, however, that the harvest is much smaller now — about half of what it used to be. He once collected more than 12 tonnes but now brings in just four or five.

Abed criticised the lack of government support, saying aerial insecticide campaigns are not enough.

'Used to be paradise'

Iraq has spent over a decade trying to revive the date palm, a vital economic asset and national symbol.

Authorities and religious institutions have launched programmes and mega-projects to encourage tree planting and growth.

An agriculture ministry spokesperson told the official INA news agency last month that, "for the first time since the 1980s", the number of date palms had risen to "more than 22 million", up from a low of just eight million.

During the Iran-Iraq War, palm groves were razed in vast areas along the border to prevent enemy infiltration.

Today, dates are Iraq's second-largest export product after oil, which dominates export revenues and generates more than $120 million, according to the World Bank.

In 2023, Iraq exported around 650,000 tonnes of dates, official statistics show.

Yet, around Janajah, many palm trees lie dead and decapitated.

"All these palm trees are dead due to the drought; the whole region is suffering," said 56-year-old farmer Maitham Talib.

"Before, we had water. People irrigated abundantly. Now, we need complicated machinery", he said, observing the harvest.

The United Nations has labelled Iraq one of the five countries in the world most vulnerable to some of the effects of climate change.

The country has endured four consecutive years of drought, though this year saw some relief with winter rainfall.

Alongside rising temperatures that have hit 50ºC (122 Fahrenheit) in summer and declining rainfall, Iraq also faces falling river levels, blamed on dams built upstream by Iran and Turkey.

Kifah Talib, 42, lamented the slow devastation wrought by the drought.

"It used to be paradise: apple, pomegranate, citrus trees and vines  — everything grew here," he said.

UK meets bridge milestone on new high-speed rail track

Project's costs trebled to more than estimated $132b

By - Sep 05,2024 - Last updated at Sep 05,2024

MAPLE CROSS — Britain on Thursday finished building its longest-ever rail bridge after fitting the final segment of the Colne Valley Viaduct for the new high-speed HS2 train line, company bosses announced.

The curved 3.4 kilometre-long structure northwest of London is set to carry high-speed trains running to and from the capital at speeds of up to 320 kilometres per hour, HS2 Ltd said in a statement.

It surpasses in length the 3.3 kilometre Tay Bridge linking Fife and Dundee in Scotland, a record that stood since 1887.

"Lowering the Colne Valley Viaduct's final deck segment into place today marks the culmination of more than 10 years of planning, design and construction," said HS2 Senior Project Manager Billy Ahluwalia.

The bridge is made of 1,000 pre-cast segments which support its 54 arches and that will carry the high-speed line up to 10 metres above land and water.

The HS2 project has been mired in controversy owing to spiralling costs that saw the previous Conservative government axe key legs of the railway planned for northern England.

Originally to have run between London in southeast England and Manchester in the north, the project was drastically altered last October.

That came after the project's costs almost trebled to more than an estimated £100 billion ($132 billion), in part owing to a surge in inflation.

The remaining route, linking London to Birmingham, is not expected to open until 2029 at the earliest — and could still end up costing £67 billion, according to an official estimate made in February.

At the same time, parliament's cross-party Public Accounts Committee strongly criticised the scaled-down plans, claiming they delivered "very poor value for money".

High Speed 2 is Britain's second such fast track, after the line that carries Eurostar trains from London to the Channel Tunnel, which in turn links the country with France.

China's Xi promises $50 billion for Africa over next three years

By - Sep 05,2024 - Last updated at Sep 05,2024

African leaders applaud Chinese President Xi Jinping (C) after his speech at the opening ceremony of the Forum on China-Africa Cooperation (FOCAC) in Beijing's Great Hall of the People on September 5, 2024 (AFP photo)

BEIJING — Chinese leader Xi Jinping on Thursday pledged over $50 billion in financing for Africa over the next three years, promising to deepen cooperation in infrastructure and trade with the continent as he addressed Beijing's biggest summit since the pandemic.

More than 50 African leaders and UN Secretary General Antonio Guterres are attending this week's China-Africa forum, according to state media.

African leaders already secured a plethora of deals this week for greater cooperation in infrastructure, agriculture, mining, trade and energy.

Addressing the leaders at the forum's opening ceremony in Beijing's ornate Great Hall of the People on Thursday, Xi hailed ties with the continent as in their "best period in history".

"China is ready to deepen cooperation with African countries in industry, agriculture, infrastructure, trade and investment," he said.

"Over the next three years, the Chinese government is willing to provide financial support amounting to 360 billion yuan ($50.7 billion)," Xi said.

Over half of that will be in credit, he said, with $11 billion "in various types of assistance" as well as $10 billion through encouraging Chinese firms to invest.

He also promised to help "create at least one million jobs for Africa".

The Chinese leader pledged $141 million in grants for military assistance to the continent as well.

Beijing would "provide training for 6,000 military personnel and 1,000 police and law enforcement officers from Africa", Xi said.

Also addressing the meeting, UN chief Guterres told African leaders that growing ties between China and the continent could "drive the renewable energy revolution".

"China's remarkable record of development -- including on eradicating poverty -- provides a wealth of experience and expertise," he said.

 

Deals and pledges 

 

China, the world's number two economy, is Africa's largest trading partner and has sought to tap the continent's vast troves of natural resources including copper, gold, lithium and rare earth minerals.

 

It has also furnished African countries with billions in loans that have helped build much-needed infrastructure but sometimes stoked controversy by saddling governments with huge debts.

Analysts say that Beijing's largesse towards Africa is being recalibrated in the face of economic trouble at home and that geopolitical concerns over a growing tussle with the United States may increasingly be driving policy.

But bilateral meetings held on the sidelines of the summit delivered a slew of pledges on greater cooperation in projects from railway to solar panels to avocados.

Following meetings on Wednesday, Zambian President Hakainde Hichilema said he had overseen a deal between the country's state-owned power company ZESCO and Beijing's PowerChina to expand the use of rooftop solar panels in his country.

Nigeria -- one of Beijing's biggest debtors on the continent -- and China inked a joint statement agreeing to "deepen cooperation" in infrastructure, including "transportation, ports and free trade zones".

 

Expanding transport links 

 

Tanzanian President Samia Suluhu Hassan, in turn, obtained a commitment from Xi to push for new progress on a long-stalled railway connecting his country to neighbouring Zambia.

That project -- which Zambian media has said Beijing has pledged $1 billion towards -- is aimed at expanding transport links in the resource-rich eastern part of the continent.

Zimbabwe also won promises from Beijing for deeper cooperation in "agriculture, mining, environmentally friendly traditional and new energy [and] transportation infrastructure", according to a joint statement by the two countries.

The southern African nation and Beijing also agreed to sign a deal that would allow the export of fresh Zimbabwean avocados to China, the joint statement said. 

And Kenyan leader William Ruto said Xi had promised to open up China's markets to agricultural products from his country. 

The two sides agreed to work together on the expansion of the country's Standard Gauge Railway -- built with finance from Exim Bank of China -- which connects the capital Nairobi with the port city of Mombasa.

And Ruto also secured a pledge for greater cooperation with China on the Rironi-Mau Summit-Malaba motorway, which Kenyan media has said is expected to cost $1.2 billion.

Ruto last year asked China for a $1 billion loan and the restructuring of existing debt to complete other stalled construction projects. The country now owes China more than $8 billion.

US trade deficit widest in two years on imports surge

By - Sep 04,2024 - Last updated at Sep 04,2024

Avianca Cargo employees unload flower crates from a cargo plane at the Miami International Airport in Miami, Florida, on February 12 (AFP photo)

WASHINGTON — The US trade deficit in July expanded to its largest since mid-2022, according to government data released Wednesday, as imports rose more quickly than exports.

Overall, the trade gap widened to $78.8 billion, from a revised $73 billion in June, the Department of Commerce said.

The growth was slightly more than analysts expected and the widest since June 2022.

Businesses were likely to be frontloading imports ahead of an increase in tariffs, analysts say, given that Washington earlier unveiled plans to hike levies on Chinese goods ranging from semiconductors to batteries and solar panels.

In July, imports jumped 2.1 per cent to $345.4 billion, boosted by capital goods like computer accessories, as well as by industrial supplies.

Exports, meanwhile, edged up 0.5 per cent to $266.6 billion, the Commerce Department report said.

Among individual segments, exports of semiconductors rose but auto shipments and that of consumer goods fell as well.

Capital goods imports have been supported by boosts from investments relating to government incentives in the Inflation Reduction Act and CHIPS Act, said Matthew Martin, US economist at Oxford Economics.

Another source of support is the prospect of lower interest rates, he added.

"Depleted inventories and resilient consumer demand should ensure the other components of imports stay on a strong growth path as well," said Martin.

US consumer demand has held up in the face of high interest rates, as the central bank hiked the benchmark lending rate in recent years to counter soaring inflation.

Households have continued spending, dipping into savings, supported by a robust jobs market.

A reduction in interest rates, widely expected later this month, could bring the world's biggest economy a further boost.

Exports have had a harder time with global demand weakening and with a strong dollar, analysts noted earlier.

China trade

In July, the US goods deficit with China increased by $4.9 billion to $27.2 billion, as exports fell and imports picked up.

"The trade gap with China blew out in July," said economists Carl Weinberg and Rubeela Farooqi of High Frequency Economics in a note.

 

Stock markets, oil prices retreat as China weighs

By - Sep 03,2024 - Last updated at Sep 03,2024

LONDON — Stock markets and oil prices retreated on Tuesday, weighed down by China's struggling economy according to analysts.

Brent North Sea crude shed more than 2 per cent, as European and Asian equities slid.

A stream of indicators, including the latest on manufacturing, has highlighted weakness in the Chinese economy, the world's second largest after the US.

China's "only plan for recovery seems to be in exporting its way out of economic doldrums", noted John Evans, analyst at oil broker PVM.

"Yet, external demand flounders in the face of a global economy that on the whole is sputtering at best."

Traders were awaiting US manufacturing figures on Tuesday ahead of key American jobs data on Friday, hoping for a clearer picture on the pace of US interest-rate cuts set to begin this month.

Wall Street reopens on Tuesday after a long holiday weekend in the US.

In foreign exchange, the yen strengthened after Bank of Japan chief Kazuo Ueda restated his intention to lift interest rates again if inflation and the economy meet its forecasts.

The bank's surprise decision to hike in July, hours before the Federal Reserve indicated it was ready to begin cutting US borrowing costs, sparked a massive unwind of the so-called "yen carry trade" in which investors used the cheap currency to buy high yielding assets like stocks.

In company news on Tuesday, shares in Cathay Pacific slipped as the Hong Kong carrier said that 15 of its Airbus A350 jets needed new engine parts after inspecting its entire fleet, which was grounded following a "first of its type" engine component failure.

British engine manufacturer Rolls-Royce on Tuesday confirmed that its Trent XWB-97 engines powered the planes, helping its shares recover slightly after starting the week with a 6.5-per cent drop.

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