Search

Just another WordPress site

Zimbabwe democracy and economic recovery act of 2001

White House warns of “end of democracy in Venezuela” as U.S. imposes sanctions

by www.cbsnews.com Leave a Comment

WASHINGTON — The Trump administration authorized sanctions against 13 current and former officials of the Venezuelan government on Wednesday and threatened harsher action if Venezuela’s president goes ahead with a controversial election.

The announcement came four days before the vote to select members to an assembly tasked with rewriting the country’s constitution. Venezuela’s socialist President Nicolas Maduro established the controversial National Constituent Assembly by decree amid a growing political and humanitarian crisis.

The White House said the election would strengthen Maduro’s grip on power and solidify his status as a dictator.

On July 16, over 7 million Venezuelans voted overwhelmingly against establishing the assembly in a symbolic referendum called by the opposition. Opponents believe the assembly is meant to circumvent the Venezuelan parliament and act as a rubber stamp for Maduro. Maduro called the vote illegal.

The individuals targeted by the Treasury Department include the vice president of Venezuela’s state owned oil company, the national police chief, the national elections director, the country’s ombudsman and the Venezuelan army chief. In a statement, Treasury Secretary Steven Mnuchin threatened further sanctions against anyone elected to the National Constituent Assembly.

During a briefing with reporters on Wednesday outlining the sanctions, a senior White House official called the upcoming election a “critical line that if crossed could be the end of democracy in Venezuela.”

“Designations that the U.S. will be making this afternoon reflect the U.S. commitment to use all the economic diplomatic and legal tools available to us to respond to extraordinary threats Venezuela’s democratic institutions face,” the official said.

The official also said President Trump is considering even tougher action targeting the Venezuelan economy if Maduro presses ahead with the Sunday vote. Those measures could include a ban on Venezuelan gas imports, the White House said, which could further cripple the oil-rich nation’s economy.

“All options are on the table to take after the July 30 voting of the Constituent Assembly,” the official said. “It is certainly our hope that Maduro will change his position and not go through with the Constituent Assembly.”

Maduro showed no signs of backing down on Wednesday.

On Twitter shortly after the sanctions were announced, Maduro retweeted an interview with RT in which he said he will not suspend the election, slated for Sunday. Maduro said opposition members should compete in the election and join the National Constituent Assembly.

Maduro later appeared on national television to present the sanctioned officials with swords. He called the U.S. sanctions “insolent” and said the assembly will be Venezuela’s “revenge.”

The Venezuelan president came to power in 2013 after the death of Hugo Chavez. Under Maduro’s watch, Venezuela’s economy has careened off a cliff. Economic mismanagement and corruption have led to food shortages that have left millions on the verge of starvation .

Over 100 protesters have been killed during clashes over the past four months, and the U.S. estimates 430 political prisoners are currently being held by Maduro’s regime.

Maduro has claimed that the Constituent Assembly, which has the power to rewrite the constitution, is the only peaceful way forward for the volatile nation.

The Trump administration’s announcement of additional sanctions came hours after opposition groups launched a 48-hour nationwide strike to boycott Sunday’s vote.

Administration officials would not comment on the effect sanctions may have in the case of Josh Holt , a 25-year-old American who has been imprisoned in Venezuela for over a year. During Wednesday’s briefing, the official said the White House “once again called for his immediate release on humanitarian grounds.”

G-7 leaders end summit pledging to hurt Russia economically

by www.denverpost.com Leave a Comment

By ZEKE MILLER and GEIR MOULSON

ELMAU, Germany (AP) — Leaders of the world’s wealthiest democracies struck a united stance to support Ukraine for “as long as it takes” as Russia’s invasion grinds on, and said they would explore far-reaching steps to cap Kremlin income from oil sales that are financing the war.

The final statement Tuesday from the Group of Seven summit in Germany underlined their intent to impose “severe and immediate economic costs” on Russia. It left out key details on how the fossil fuel price caps would work in practice, setting up more discussion in the weeks ahead to “explore” measures to bar imports of Russian oil above a certain level.

That would hit a key Russian source of income and, in theory, help relieve the energy price spikes and inflation afflicting the global economy as a result of the war.

“We remain steadfast in our commitment to our unprecedented coordination on sanctions for as long as necessary, acting in unison at every stage,” the leaders said.

Leaders also agreed on a ban on imports of Russian gold and to step up aid to countries hit with food shortages by the blockade on Ukraine grain shipments through the Black Sea.

The price cap would in theory work by barring service provides such as shippers or insurers from dealing with oil priced above a fixed level. That could work because the service providers are mostly located in the European Union or the U.K. and thus within reach of sanctions. To be effective, however, it would have to involve as many consuming countries as possible, in particular India, where refiners have been snapping up cheap Russian oil shunned by Western traders. Details on how the proposal would be implemented were left for continuing talks in coming weeks.

The U.S. has already blocked Russian oil imports, which were small in any case. The European Union has decided to impose a ban on the 90% of Russian oil that comes by sea, but that does not take effect until the end of the year, meaning Europe continues to send money to Russia for energy even while condemning the war. Meanwhile, higher global oil prices have softened the blow to Russia’s income, even as Western traders shun Russian oil.

Energy themes were front and center at the summit throughout. Europe is scrambling to find new sources of oil and fresh supplies of gas as Russia dials back gas supplies in what leaders say is a political move. Meanwhile high energy prices are a headache for G-7 countries’ consumers.

The summit host, German Chancellor Olaf Scholz defended the G-7′s decision to soften commitments to end public support for fossil fuel investments, saying the war in Ukraine means time-limited support for new natural gas extraction projects may be necessary.

The G-7 nations said in a statement Tuesday at the end of their three-day summit that “in these exceptional circumstances, publicly supported investment in the gas sector can be appropriate as a temporary response.”

Before the summit’s close, leaders joined in condemning what they called the “abominable” Russian attack on a shopping mall in the town of Kremechuk, calling it a war crime and vowing that President Vladimir Putin and others involved “will be held to account.”

The leaders of the U.S., Germany, France, Italy, the U.K., Canada and Japan on Monday pledged to support Ukraine “for as long as it takes” after conferring by video link with Ukrainian President Volodymyr Zelenskyy.

The summit host, German Chancellor Olaf Scholz, said he “once again very emphatically set out the situation as Ukraine currently sees it.” Zelenskyy’s address came hours before Ukrainian officials reported a deadly Russian missile strike on a crowded shopping mall in the central city of Kremenchuk.

From the secluded Schloss Elmau hotel in the Bavarian Alps, the G-7 leaders will move to Madrid for a summit of NATO leaders, where fallout from Russia’s invasion of Ukraine will again dominate the agenda. All G-7 members other than Japan are NATO members, and Japanese Prime Minister Fumio Kishida has been invited to Madrid.

Zelenskyy has openly worried that the West has become fatigued by the cost of a war that is contributing to soaring energy costs and price hikes on essential goods around the globe. The G-7 has sought to assuage those concerns.

While the group’s annual gathering has been dominated by Ukraine and by the war’s knock-on effects, such as the challenge to food supplies in parts of the world caused by the interruption of Ukrainian grain exports, Scholz has been keen to show that the G-7 also can move ahead on pre-war priorities.

Members of the Group of Seven major economies pledged Tuesday to create a new ‘climate club’ for nations that want to take more ambitious action to tackle global warming.

The move, championed by Scholz, will see countries that join the club agree on tougher measures to reduce greenhouse gas emissions with the aim of keeping global temperatures from rising more than 1.5 Celsius (2.7 Fahrenheit) this century compared with pre-industrial times.

Countries that are part of the club will try to harmonize their measures in such a way that they are comparable and avoid members imposing climate-related tariffs on each others’ imports.

Speaking at the end of the three-day summit in Elmau, Germany, Scholz said the aim was to “ensure that protecting the climate is a competitive advantage, not a disadvantage.”

He said details of the planned climate club would be finalized this year.

___

Follow AP’s coverage of the G-7 summit at https://apnews.com/hub/g-7-summit and of Russia’s war in Ukraine at https://apnews.com/hub/russia-ukraine

S&P revises Malaysia’s sovereign credit ratings’ outlook to stable, projects GDP to grow 6.1% in 2022

by www.thestar.com.my Leave a Comment

KUALA LUMPUR: S&P Global Ratings has revised Malaysia’s long-term sovereign credit ratings outlook to ‘stable’ from ‘negative’ as it believes the country is on a strong economic recovery path compared to others at similar income levels, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, in reference to the global ratings agency’s latest report on Malaysia.

S&P also projected that Malaysia’s gross domestic product (GDP) will grow 6.1 per cent this year and 5.0 per cent in 2023 supported by strong exports, high commodity prices and domestic demand following the reopening of the economy.

In response to S&P’s GDP forecast of 6.1 per cent, Tengku Zafrul said it is in line with the government’s expectation of higher growth in subsequent quarters, and in alignment with the higher end of Bank Negara Malaysia’s official estimate of 5.3-6.3 per cent.

Concurrently, S&P has also affirmed the ‘A- long-term and ‘A -2’ short-term foreign currency sovereign credit ratings as well as Malaysia’s ‘A’ long-term and ‘A-1’ short-term local currency ratings.

“The stable outlook reflects our expectations that Malaysia’s steady growth momentum and strong external position will remain in place over the next two years.

“At the same time, we anticipate the policymaking environment will be supportive of restoring fiscal settings to a firmer footing,’’ the rating agency said in a statement.

S&P states that it may raise the ratings on Malaysia if fiscal outcomes outperform its forecasts.

“This would be shown from net debt stock falling below 60 per cent of GDP or interest payments less than 10 per cent of general government revenues,” it said.

On this, Tengku Zafrul said the government remains fully committed to fiscal consolidation and ensuring fiscal sustainability.

Supported by the gradual implementation of the Medium-Term Revenue Strategy, which aims to improve the country’s revenue base, the government will resume its consolidation path gradually and strategically as the recovery becomes more firmly entrenched.

This will balance short-term fiscal requirements with long-term fiscal and economic sustainability.

One key effort towards this is the proposed enactment of the Fiscal Responsibility Act by end-2022.

However, S&P also said Malaysia may see its ratings lowered if economic growth suffers a prolonged downturn that reduces growth trend in real GDP per capita to levels in line with that of peers.

‘’Downward rating pressure could also build if political stability in Malaysia deteriorates such that policy-making becomes materially less predictable,’’ S&P noted. – Bernama

PH credit rating seen safe despite high debt

by business.inquirer.net Leave a Comment

Credit rating agencies expect the level of the Philippines’ debt that they have been watching to be manageable and decline alongside economic recovery.

This boosts the likelihood that the Philippines will keep its investment-grade credit ratings and therefore borrowing cheap during the Marcos Jr. administration.

The latest Department of Finance (DOF) data showed that the Philippines’ general government (GG) debt as a share to gross domestic product (GDP) rose to 53.5 percent of GDP in 2021, the highest since data started getting collected in 2013.

GG debt is composed of combined obligations of the national government, local governments and social security institutions, less their bond holdings.

Debt watchers closely monitor GG debt levels for their credit rating actions. DOF data showed that the GG debt ratio climbed from 34.1 percent of GDP in 2019 prepandemic to 48.1 percent in 2020, and then further jumped last year.

In terms of actual value, GG debt rose from P6.65 trillion in 2019 to P8.63 trillion in 2020, and increased to a record P10.37 trillion in 2021.

Despite a historic-high GG debt in terms of both value and its share to GDP, analysts at credit rating agencies Moody’s Investors Service and S&P Global Ratings weren’t worried.

“The Philippines’ debt level remains in line with its sovereign ratings, reflecting our stable outlook. We expect government debt in 2022 to steady as a share of GDP on the back of strong economic recovery as the country emerges from the pandemic-driven slowdown,” S&P analyst YeeFarn Phua said in an email to the Inquirer. S&P had kept its “BBB+” investment-grade credit rating for the Philippines amid the prolonged COVID-19 pandemic.

Consistent with ratings

For Moody’s Investors Service, “the recently released data for the Philippines’ GG debt, estimated at 53.5 percent of GDP in 2021, remains consistent with the current ‘Baa2’ sovereign rating,” its senior vice president Christian de Guzman said in an email.

De Guzman said the Philippines’ GG debt ratio last year remained below the median of 62.5 percent of GDP among similarly rated peers, which was lower than the about 65 percent in 2020 at the onset of the COVID-19 pandemic. “However, whereas the Baa2 median debt burden peaked in 2020, we expect that the Philippines will do so in 2021,” De Guzman added.

Asked about his outlook on the Philippines’ debt levels, De Guzman replied: “We expect gradual fiscal and debt consolidation in the Philippines over the next few years, although this scenario is subject to increasing uncertainty given the prevailing global headwinds to growth that could have important spillovers for the Philippines.”

Economic recovery

“The ratings trajectory will be determined in part by the incoming administration’s ability to balance sustaining the economic recovery against its intentions to undertake significant fiscal repair,” De Guzman said.

Both President-elect Ferdinand Marcos Jr. and incoming Finance Secretary Benjamin Diokno have not been keen to the DOF’s fiscal consolidation proposal aimed at repaying pandemic-induced ballooning debts and narrowing the budget deficit to prepandemic levels. The fiscal consolidation pitch mainly consisted of higher or new taxes to be slapped on consumption, while delaying by three years personal income taxpayers’ scheduled tax cuts under the Tax Reform for Acceleration and Inclusion Act.

The next administration also wanted to sustain robust spending, especially for their priority programs and projects like infrastructure, despite the outgoing economic team suggesting some budget cuts.

Back in February, Fitch Ratings also kept the Philippines’ “BBB” rating—one-notch above minimum investment grade—as it projected GG debt would likely be below-average among its similarly rated peers in the next couple of years.

“The Philippines’ debt trajectory will depend on the balance of fiscal consolidation and ongoing government spending to support the economic recovery. We project GG debt-to-GDP to reach 54.5 percent in 2022, then decline to 53.1 percent in 2023, from an estimated 54 percent in 2021 (and 48.1 percent in 2020). This is still below our ‘BBB’ median forecast of 55.3 percent in 2022 and 56.6 percent in 2023,” Fitch had said.

Credit ratings are a measure of a government’s creditworthiness. As the stability of state finances was also related to a country’s performance, credit scores serve as a proxy grade for the economy.

Improved ratings will allow the government to demand lower rates when it borrows from lenders, which could translate to lower interest rates for consumers and businesses borrowing from banks using government-issued debt paper as benchmarks for their loans.

The Philippines’ credit rating status remained investment grade despite the prolonged pandemic, although some downgraded their outlook—or the timing of possible upgrades —to “negative” or a short-term deferral. The country currently enjoys investment-grade credit ratings from the top three debt watchers Fitch Ratings, Moody’s and S&P. INQ

German economy crumbles – confidence evaporates as Russia chokes gas supplies

by www.express.co.uk Leave a Comment

G7 leaders mock Putin at roundtable meeting in Germany

Sign up for our news briefing, including a daily special Russia-Ukraine edition

Invalid email

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The Gfk German consumer confidence survey showed on Tuesday that consumer sentiment in Europe’s largest economy is forecast to slide to a record low next month as the war in Ukraine and supply chain disruptions continue to drive food and energy prices higher.

The index predicted confidence would decline to -27.4 in July from a revised figure of -26.2 in June.

July’s figure is the lowest that has ever been measured by the index since it was created in 1991.

GfK consumer expert Rolf Bürkl said: “The ongoing war in Ukraine and disruptions in supply chains are causing energy and food prices in particular to skyrocket, resulting in a gloomier consumer climate than ever before.”

Mr Bürkl said the increase in the cost of living was having the most prominent impact on consumer sentiment, driving it into a downward spiral.

The report noted: “Consumers continue to see a significant risk of the German economy slipping into recession.”

Income expectations were also showing a continuously rapid descent in June, falling to -33.5 from -23.7 in May.

GfK said this was the lowest value in almost 20 years.

German chancellor Olaf Scholz

Germany’s economy is struggling in the wake of Russia’s invasion of Ukraine. (Image: GETTY)

Nord Stream 2 pipeline

The controversial Nord Stream 2 pipeline has been axed by Germany over Russia’s invasion of Ukraine. (Image: GETTY)

Falling economic and income expectations left Germany’s public less willing to spend money, the report said.

GfK’s Bürkl said the European Central Bank should adopt an appropriate monetary policy to curb inflation.

At the same time, he noted, such measures should not push the ailing German economy into a recession.

Elsewhere, the PMI survey for June also released last week showed that the fallout from the war in Ukraine had stopped Germany’s economic recovery from COVID-19 in its tracks.

Phil Smith, an economist at S&P Global which compiles the survey, said Germany’s economic sentiment had “lost virtually all the momentum gained from the easing of virus-related restrictions, with growth in the service sector cooling sharply for the second month in a row in June.”

German business morale also slumped in June amid worries that rising prices and gas shortages will continue to take a toll on the economy for the rest of the year.

Based on a survey of around 9,000 firms, the Ifo business climate index released last week fell to 92.3 points in June from 93.0 points in May amid a gloomy outlook for the remainder of 2022.

Robert Habeck

Germany’s economics minister Robert Habeck shows a bleak forecast of gas storage levels, June 23. (Image: GETTY)

fo President Clemens Fuest said: “Rising energy prices and looming gas shortages are causing great concern for the German economy.”

He cited particular stress on the chemical industry, which relies heavily on natural gas supplies from Russia.

Germany is now officially running short of natural gas and is escalating a crisis plan to preserve supplies as Russia cuts off deliveries.

The country has raised its national energy alert in the face of Russia’s “economic attack”, triggering Phase 2 of three of its emergency gas plan last Thursday.

The plan kicks in when the government sees a high risk of long-term supply shortages of gas.

The measure is the latest escalation in a standoff between Europe and Moscow since Russia’s invasion of Ukraine exposed the bloc’s dependence on Russian gas supplies.

Germany’s economy minister Robert Habeck said last week that the country is heading for a gas shortage if Russian gas supplies remain as low as they are now.

Anti-Russia protest Germany

Protests against Russia’s invasion of Ukraine on the first day of the G7 summit in Germany, June 26. (Image: GETTY)

He told Der Spiegel magazine on Friday that certain industries would have to be shut down if there is not enough gas come the winter.

He said: “Companies would have to stop production, lay off their workers, supply chains would collapse, people would go into debt to pay their heating bills, that people would become poorer.”

Mr Habeck said it was part of Russian President Vladimir Putin’s strategy to divide the country.

He called this “the best breeding ground for populism, which is intended to undermine our liberal democracy from within”, adding that Putin’s plans must not be allowed to work out.

Addressing a press conference in Berlin on Thursday, he said: “Gas is from now on in short supply in Germany.

“Even if you don’t feel it yet: We are in a gas crisis.”

Mr Habeck said he hoped rationing supplies in the industry would not be necessary to get through the coming winter, but it could not be ruled out.

Trending

Germany has however stopped short of allowing utilities to pass on soaring energy costs to customers.

Europe’s energy crisis escalated this month as Russia further choked supplies to Germany, Italy and other members of the EU over the conflict in Ukraine.

Russia’s state gas company Gazprom slashed flows through the Nord Stream 1 pipeline to Germany by 60 percent last week, blaming the move on the West’s decision to withhold vital turbines due to sanctions.

Italian energy giant ENI said Gazprom was cutting its supplies by 15 percent.

Twelve EU countries have so far been affected by Russian gas supply cuts, the bloc’s climate policy chief Frans Timmermans said on Thursday.

Mr Timmermans said: “Russia has weaponized energy, and we have seen further gas disruptions announced in recent days. All this is part of Russia’s strategy to undermine our unity.

“So the risk of full gas disruption is now more real than ever before.”

Moscow has claimed the cuts in Russia gas supplies to Europe were a result of technical issues rather than political reasons, with Kremlin spokesman Dmitry Peskov denying that there is a “hidden agenda.”