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Exclusive: UniCredit to pay over $1 billion to settle U.S. sanctions probes – source

FILE PHOTO: Unicredit bank logo is seen in the old city centre of Siena
FILE PHOTO: Unicredit bank logo is seen in the old city centre of Siena, Italy June 29, 2017. REUTERS/Stefano Rellandini/File Photo

April 15, 2019

By Karen Freifeld

(Reuters) – UniCredit, Italy’s biggest lender, will pay over $1 billion to U.S. authorities to settle probes of violations of U.S. sanctions on Iran and other countries, a person familiar with the matter said on Monday.

The settlement will be with the U.S. Department of Justice, the U.S. Treasury Department, the Federal Reserve, the Manhattan District Attorney and the New York Department of Financial Services.

(Reporting by Karen Freifeld)

Source: OANN

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European shares steady near four-month highs but poor earnings weigh

The German share price index DAX graph at the stock exchange in Frankfurt
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 18, 2019. REUTERS/Staff

February 21, 2019

MILAN (Reuters) – Optimism over China-U.S. trade talks helped European shares steady near four-month highs on Thursday, although a number of poorly received updates from the likes of utility Centrica, engineer Technip and shipper Moeller-Maersk weighed.

The pan-European STOXX 600 index was flat by 0830 GMT, while the trade-sensitive DAX index was up 0.3 percent and France’s CAC 40 added 0.1 percent.

A Reuters report said Washington and Beijing had started to outline commitments on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war.

Centrica was the biggest faller on the STOXX 600, down 11 percent after it warned a national price cap on energy bills would hit its 2019 results.

Moeller-Maersk fell 8.7 percent after meeting fourth-quarter expectations, while TechnipFMC also tumbled more than 7 percent as the oil services company posted a fourth quarter loss.

Prysmian was another heavy faller, down 9 percent, after the Italian cable maker said a system failure was detected in its Westernlink Interconnection.

Barclays rose 4 percent. Even though the UK bank reported a lower than forecast attributable profit, it did show signs of progress in its under-pressure investment bank, where profit for the full year increased as its equities trading unit saw income rise 25 percent.

Still in the UK, BAE Systems fell 5.9 percent. Britain’s biggest defense company said German moves to block exports to Saudi Arabia could hit its major deals with the Kingdom.

(Reporting by Danilo Masoni, Editing by Helen Reid)

Source: OANN

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Whatever it takes, Part 2?: Five questions for the ECB

FILE PHOTO: ECB President Draghi delivers a speech during a ceremony to mark the 20th anniversary of the launch of the Euro, at the European Parliament in Strasbourg
FILE PHOTO: European Central Bank (ECB) President Mario Draghi delivers a speech during a ceremony to mark the 20th anniversary of the launch of the Euro, at the European Parliament in Strasbourg, France, January 15, 2019. REUTERS/Vincent Kessler/File Photo

April 8, 2019

By Dhara Ranasinghe, Ritvik Carvalho and Abhinav Ramnarayan

LONDON (Reuters) – Just a month after the European Central Bank halted plans to normalize policy and delayed a rate increase into 2020, further signs of weakness in the economy and a whiff of panic among investors is putting the central bank back in the spotlight.

No policy changes are expected at Wednesday’s ECB meeting, especially since some board members are traveling to Washington for the International Monetary Fund’s spring meetings.

But talk of tiered rates to ease pressure on banks, global recession fears and a sense of alarm that pushed 10-year German bond yields below zero percent for the first time since 2016 suggest the ECB news conference may prove lively.

We look at five key questions on the radar for markets:

1. How close is the ECB to action to offset the impact of negative interest rates on banks?

A debate on whether to “tier” the negative interest rates that banks pay on the idle cash they park at the ECB is now underway, judging by recent ECB comments and the minutes from the March meeting.

“It’s not an obvious next step, but one that the ECB will have to face at some point,” said James Rossiter, senior global strategist at TD Securities. “We don’t expect anything official in the ECB’s statement, but it will be difficult for (ECB chief Mario) Draghi to avoid questions on this.”

Dutch central bank Governor Klaas Knot has said he would need to see clear evidence that negative rates were hurting lending to the real economy. ECB Vice President Luis de Guindos said last week that while the bank is studying ways to cut its charge on banks’ deposits, euro zone lenders should look closer to home for the causes of their meager profits.

The debate is important because if the ECB introduces tiered rates, that might suggest it is preparing to keep interest rates low, below zero percent, for longer than anticipated. No surprise then, that money markets have scaled back expectations of a rate rise and even started to factor in the risk of a rate cut this year.

(Graphic: When will the ECB raise interest rates? – https://tmsnrt.rs/2WMPcao)

2. What about TLTRO III, can we expect more details?

In March, the ECB offered some details of what TLTRO III will look like: the loans will have a two-year maturity and be offered on a quarterly basis from September until March 2021.

The ECB’s March meeting minutes showed the bank is still ironing out details.

Key questions for investors now are what interest the banks will have to pay on the loans and where the funds can be deployed. Barclays analysts, for example, expect banks will be given an incentive to take up the loans through better borrowing rates than the main refinancing operations (MRO), which provide the bulk of liquidity to the euro zone banking system.

Euro zone bank stocks and government bonds are sensitive to any TLTRO news. Yields on short-dated Southern European bonds have dropped, suggesting investors expect Italian banks in particular to take up the loans.

(Graphic: Euro zone bank stocks cheer signs of multi year loans – https://tmsnrt.rs/2WKE3H0)

3. Does the ECB see any green shoots for the economy?

The ECB is not expected to change its assessment that risks to the economy are tilted to the downside but officials are worried about the downside risks to the growth and inflation forecasts.

Unexpectedly weak manufacturing activity data from Germany rattled markets last month, and a brief inversion of the U.S. bond yield curve fueled concerns about global recession risks.

Germany’s leading economic institutes last week slashed their 2019 forecast for growth in Europe’s biggest economy and warned growth might be even lower if there is a no-deal Brexit.

Not all the data have been bad, and economists point out a pick-up in data from China — the world’s number two economy — and signs of strength from the euro zone services sector.

(Graphic: Euro zone economic data – https://tmsnrt.rs/2Vq73DG)

4. How concerned is the ECB that ultra-loose policy has failed to lift inflation expectations?

Even after last month’s unexpectedly dovish tone from the central bank, inflation and inflation expectations remain low.

Draghi has long predicted a rise in underlying inflation, only for the data to disappoint him and force the ECB to ask for even more time to lift prices.

A closely watched underlying inflation figure that excludes volatile food and energy prices slowed to 1.0 percent in March, its weakest reading since April 2018.

Economists note the timing of Easter distorts the inflation numbers and that the April data should prove more encouraging.

“It might not feel or look like it, but inflation has been delayed rather than derailed,” said Jefferies senior European economist Marchel Alexandrovich.

The ECB will be hoping that’s the case, especially since inflation expectations have tumbled. A key market gauge of long-term inflation expectations tracked by the ECB is near its lowest level since 2016. It is down 20 basis points this year — more than it fell the whole of 2018.

(Graphic: Below target inflation – https://tmsnrt.rs/2WLvvQ1)

5. Is the ECB ready for a no-deal Brexit?

Draghi told European Union leaders recently that the ECB, the Bank of England and the European Commission have made all the necessary preparations for a no-deal Brexit, according to a recent report.

But Draghi and other officials have also stressed that markets are not fully pricing in the risk of Britain’s exit from the EU without a deal — a warning the ECB chief may repeat this week.

A no-deal Brexit might also affect market liquidity, the EU commissioner in charge of financial services said last week.

Any clarity on Brexit is likely to be met with relief by investors and boost sentiment. The ECB is no doubt paying close attention.

For an interactive version of the below chart, click here https://tmsnrt.rs/2Ua88yG.

(Graphic: No deal Brexit probabilities – https://tmsnrt.rs/2CPfG3j)

(Reporting by Dhara Ranasinghe; additional reporting by Abhinav Ramnarayan; graphics by Ritvik Carvalho; editing by Larry King)

Source: OANN

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Exasperated Ecuador ends asylum for world’s worst houseguest

Did Western media and government hypocrisy bring about Julian Assange's arrest, or was it his bad manners?

The dramatic end to Julian Assange's asylum has sparked curiosity about his 7-year stay inside Ecuador's embassy in London that was marked by his late-night skateboarding, the physical harassment of his caretakers and even the smearing of his own fecal matter on the walls of the diplomatic mission.

It would've tested the patience of any host. But for tiny Ecuador, which spent almost $1 million a year protecting Assange, it was also seen as a national insult.

President Lenin Moreno called the WikiLeaks founder a "spoiled brat" in a fiery speech Thursday explaining his decision to withdraw protection of Assange and hand him over to British police.

Source: Fox News World

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Brexit hangs in balance as lawmakers to vote on May’s tweaked deal

British Prime Minister Theresa May arrives for a news conference with European Commission President Jean-Claude Juncker in Strasbourg
British Prime Minister Theresa May arrives for a news conference with European Commission President Jean-Claude Juncker in Strasbourg, France March 11, 2019. REUTERS/Vincent Kessler

March 12, 2019

By Guy Faulconbridge and Kylie MacLellan

LONDON (Reuters) – The future of Britain’s exit from the European Union hung in the balance on Tuesday as lawmakers prepared to vote on a divorce deal after Prime Minister Theresa May won last-minute assurances from the European Union.

Scrambling to plot an orderly path out of the Brexit maze just days before the United Kingdom is due to leave, May rushed to Strasbourg on Monday to agree ‘legally binding’ assurances with European Commission President Jean-Claude Juncker.

British lawmakers, who on Jan. 15 voted 432-202 against her deal, were on Tuesday studying the assurances with lawyers. The government’s top lawyer, Geoffrey Cox, is due to give his opinion on Tuesday ahead of the vote due around 1900 GMT.

“We have secured legal changes,” May said in a late night news conference in Strasbourg beside Juncker, 17 days before the United Kingdom is due to leave the EU on March 29.

After two-and-a-half years of haggling since the 2016 Brexit referendum, Juncker cautioned that this was the last chance for Britain.

“It is this deal or Brexit might not happen at all,” he said. Sterling rose 1.5 percent against the dollar and to a near two-year high against the euro.

If lawmakers vote down May’s deal, she has promised a vote on Wednesday on whether to leave without a deal and, if they reject that, then a vote on whether to ask for a limited delay to Brexit.

The United Kingdom’s labyrinthine crisis over EU membership is approaching its finale with an array of possible outcomes, including a delay, a last-minute deal, a no-deal Brexit, a snap election or even another referendum.

Brexit will pitch the world’s fifth largest economy into the unknown and many fear it will divide the West as it grapples with both the unconventional U.S. presidency of Donald Trump and growing assertiveness from Russia and China.

BREXIT VOTE

Supporters of Brexit say while the divorce might bring some short-term instability, in the longer term it will allow the United Kingdom to thrive and also enable deeper EU integration without such a powerful reluctant member.

Brexit-supporting lawmakers in May’s party had accused her of botching the negotiations with Brussels and surrendering on the detail of the backstop which sets out what happens to the Irish border if the sides fail to find a solution.

Many Brexiteers worried that the backstop, aimed at avoiding controls on the border between the British province of Northern Ireland and EU-member Ireland, could trap the United Kingdom in the EU’s orbit indefinitely.

May announced three documents – a joint instrument, a joint statement and a unilateral declaration – which she said were aimed at addressing the Irish backstop, the most contentious part of the divorce deal she agreed with the EU in November.

The immediate reaction was cautious from Brexit-supporting lawmakers and from the Northern Irish Democratic Unionist Party (DUP) which props up her minority government.

“We will be taking appropriate advice, scrutinizing the text line by line and forming our own judgment,” a DUP spokesman said.

The motion put forward by the government said the joint instrument “reduces the risk” that the United Kingdom would be trapped in the backstop.

If the backstop comes into force and talks on the future relationship break down with no prospect of an agreement, May said the unilateral declaration she announced would make clear there was nothing to stop London from moving to leave the backstop.

Former Attorney General Dominic Grieve, an opponent of Brexit, said the changes to May’s deal did not make a material difference.

(Additional reporting by Elisabeth O’Leary and Alistair Smout; Writing by Guy Faulconbridge; Editing by Janet Lawrence)

Source: OANN

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Joe Biden announces 2020 presidential bid: 3 things to know about the former vice president

Former Vice President Joe Biden officially announced his 2020 presidential bid.

"The core values of this nation, our standing in the world, our very democracy, everything that has made America — America — is at stake. That’s why today I’m announcing my candidacy for president of the United States," Biden announced in a tweet early Thursday.

Biden, 76, is the latest Democrat to enter the crowded race for the White House against President Trump. A former senator from Delaware, Biden has emerged as a frontrunner for the Democratic nomination — topping the polls alongside self-proclaimed Democratic socialist Sen. Bernie Sanders of Vermont.

Here are three things to know about the former vice president as his campaign journey begins.

He first bid for the presidency came over three decades ago

Biden’s announcement on Thursday marks the beginning of his third campaign for the White House.

As a 45-year-old senator from Delaware, Biden launched his first campaign in 1987 at the Wilmington train station. The first campaign didn’t last long, ending after it became public that he had plagiarized a speech from a British politician, according to the Delaware News Journal.

His second bid began in 2007, but he dropped out in 2008 after failing to gain enough support. Biden ultimately went on to serve as vice president for two terms under Barack Obama.

In 2016, there was much speculation that Biden would again announce a bid for president, but he decided against running for personal reasons. His son, Beau, had died in 2015 after battling brain cancer.

His choice of transportation is the Amtrak train

Aptly nicknamed “Amtrak Joe,” Biden had long been a fixture on the rail line between his home in Delaware and his office in Washington D.C.

Biden began taking the train home every night to care for his two sons after his wife and daughter died in a car accident in 1972, according to the Washington Post.

He carried on the Amtrak tradition throughout his decades-long Senate career. Biden’s affinity for the train gained national attention when he became Obama’s running mate in 2008.

He was awarded the Presidential Medal of Freedom

President Barack Obama presents Vice President Joe Biden with the Presidential Medal of Freedom on Jan. 12, 2017.

President Barack Obama presents Vice President Joe Biden with the Presidential Medal of Freedom on Jan. 12, 2017. (The Associated Press)

In January 2017, outgoing President Obama surprised Biden with the President Medal of Freedom in an emotional ceremony.

"To know Joe Biden is to know love without pretense, service without self-regard, and to live life fully," Obama said.

Biden tearfully accepted the honor.

Source: Fox News Politics

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Chinese Jet Shows Off US Tech

After months of complaints by the US administration that China is stealing intellectual property from companies in the United States, a picture of a Chinese fighter jet has been publicized on social media featuring key technology systems developed for the American F-35.

Critics have previously noted that the Chengdu J-20 is all but a mirror copy of Lockheed Martin’s F-22, an air superiority aircraft that is no longer in production. According to a report by the Washington Times, an anonymous user recently posted new images of the J-20 on Chinese military websites showing two key technologies that have long been touted as unique features of US fighter aircraft.

Alex Jones exposes the left’s obsession with domination over those they disagree with.

One of the technologies that apparently originated in the United States was the Distributed Aperture System (DAS), which is supposed to be one of the F-35’s most important sensors (the aircraft itself is often colloquially described as a flying computer). DAS has been billed by advocates as a revolutionary capability allowing a pilot to see exactly what’s going on 360 degrees around the aircraft — all but eliminating blind spots.

If you’ve ever read a report saying that the F-35 helmet lets the pilot see through the bottom of the aircraft, that functionality is made possible by DAS, Defense News notes. If the latest images suggest anything, now the Chengdu J-20 has a comparable DAS functionality as well.

“The camera lens with a relatively large optical aperture in the nose comes with a reddish-purple plating/coasting,” says the posting on the China-based Chaoji Da Benying website, as reported by the Washington Times. The post, which included four pictures of the J-20 with what looks like a fresh coat of paint, noted that “it very much resembles the F-35’s AN/AAQ-3 7 DAS.”

The F-35’s DAS, however, has been one of the driving factors behind why the jet has a low availability rate to conduct missions, Breaking Defense reported in June 2018.

(Photo by Sunson Guo, Flickr)

In an attempt to keep costs down on the DAS component of the F-35 project, prime F-35 contractor Lockheed Martin ditched its arrangement with Northrop Grumman — formerly the main subcontractor on the DAS component — and asked whether the rest of the defense contracting industry could do the job better and cheaper than Northrop. Raytheon became the new subcontractor for the DAS system, effectively swiping away all of Northrop’s business on that part of the F-35 project.

“It’s a major upset,” Richard Aboulafia of the Teal Group told Breaking Defense last June, adding that “from a revenue standpoint, F-35 remains almost the only game in town.”

“Major component changes like these are extremely rare, particularly at this stage of a procurement program.” The reliability rate of DAS was abysmal when Northrop was the main subcontractor; Lockheed announced that shifting contract execution to Raytheon’s DAS from Northrop’s would make the system five times more reliable.

“The DAS win will be worth billions of dollars across the lifetime of the F-35 program. The shift in supplies is part of a broader push by Lockheed Martin to wring costs out of the program,” said defense analyst Loren Thompson in comments to Breaking Defense last year.

The Washington Times report added that a second technology used by US aircraft, the Universal Water Activated Release System (UWARS), is also featured prominently on the photo of the J-20. UWARS helps automatically eject pilots from the jets if they hit seawater. “Getting our wish fulfilled… The improved details show that our J-20 is finally going to reveal its majesty on the open sea,” the anonymous Chinese poster said.

It’s not clear whether either of the technologies has been stolen from US government agencies or US defense contractors. US officials insist China has been stealing American technology for decades.

Steward Rhodes and William Gheen join Owen Shroyer live via Skype to reveal how the budget bill President Trump signed in order to prevent another, continuous government shutdown has provisions wedged into it by desperate democrats that grants amnesty to illegal immigrants.

Source: InfoWars

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Venezuela's Foreign Affairs Minister Jorge Arreaza talks to the media during a news conference in Caracas
Venezuela’s Foreign Affairs Minister Jorge Arreaza talks to the media during a news conference in Caracas, Venezuela April 8, 2019. REUTERS/Manaure Quintero

April 26, 2019

WASHINGTON (Reuters) – The U.S. Treasury Department on Friday imposed sanctions on Venezuela’s foreign minister and a Venezuelan judge, according to a statement on the department’s website.

Foreign Minister Jorge Arreaza and a judge, Carol Padilla, were targeted over the ongoing crisis in Venezuela, the Treasury Department said, the latest in a list of officials blacklisted by U.S. authorities for their role in President Nicolas Maduro’s government.

(Reporting by Susan Heavey, Makini Brice and Lesley Wroughton; Editing by Chizu Nomiyama)

Source: OANN

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Avengers fans gather at the TCL Chinese Theatre in Hollywood to attend the opening screening of
Avengers fans gather at the TCL Chinese Theatre in Hollywood to attend the opening screening of “Avengers: Endgame” in Los Angeles, California, U.S., April 25, 2019. REUTERS/Mike Blake

April 26, 2019

LOS ANGELES (Reuters) – Marvel Studios superhero spectacle “Avengers: Endgame” hauled in a record $60 million at U.S. and Canadian box offices during its Thursday night debut, distributor Walt Disney Co said.

Global ticket sales for the film about Iron Man, Hulk and other popular characters reached $305 million for the first two days, Disney said.

(Reporting by Lisa Richwine; Editing by Chizu Nomiyama)

Source: OANN

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Funeral of journalist Lyra McKee in Belfast
Labour Party leader Jeremy Corbyn attends the funeral service for murdered journalist Lyra McKee at St Anne’s Cathedral in Belfast, Northern Ireland April 24, 2019. Brian Lawless/Pool via REUTERS

April 26, 2019

LONDON (Reuters) – The leader of Britain’s opposition Labour Party, Jeremy Corbyn, said on Friday he had turned down an invitation to a state dinner which will be part of U.S. President Donald Trump’s visit to Britain in June.

“Theresa May should not be rolling out the red carpet for a state visit to honor a president who rips up vital international treaties, backs climate change denial and uses racist and misogynist rhetoric,” Corbyn said in a statement.

He said maintaining the relationship with the United States did not require “the pomp and ceremony of a state visit” and he said he would welcome a meeting with Trump “to discuss all matters of interest.”

(Reporting by Andy Bruce; Writing by William Schomberg)

Source: OANN

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A bedridden 67-year-old woman and more than a dozen animals were rescued Thursday after a welfare check found that they were living in a home filled with trash, urine, and feces, Florida police said.

Pinellas County sheriff’s deputies said when they arrived at the home in Dunedin around 7:20 p.m. Thursday, they could smell the odor of rotting trash and animal feces as they walked up to the driveway.

“Inside the residence, the odor of feces and urine was so overwhelming that deputies had to don masks,” the sheriff’s department said in a statement.

FLORIDA SHERIFF ON BORDER CRISIS AFTER MAJOR DRUG BUST: ‘IT MAKES ME ABSOLUTELY CRAZY’

Walking throughout the residence, the deputies found 10 emaciated dogs and puppies living in bins filled with their own feces, five large Macaw birds flying freely, rats, bugs and overall squalor.

Puppies discovered living in their own feces inside a Florida home that was filled with trash, urine, and feces.

Puppies discovered living in their own feces inside a Florida home that was filled with trash, urine, and feces. (Pinellas County Sheriff’s Office)

Deputies said due to the large amounts of trash in the home, they had to clear a path to reach the victim’s bedroom.

“None of the home’s toilets were working and all were found to be overflowing with feces,” deputies said. “The only working sink was located on the opposite end of the house from the victim’s bedroom.”

They said there was no food or water for the victim or the animals.

FLORIDA MAN IN EASTER BUNNY COSTUME CAUGHT IN VIRAL BRAWL IS WANTED IN NEW JERSEY, HAS HISTORY OF ARRESTS

The victim was transported to a local hospital for injuries that were non-life threatening, while the animals were transported to shelters.

The woman’s caretaker, Richard Lawrence Goodwin, 65, was arrested and charged with abuse and neglect of an elderly person, disabled person, and cruelty to animals.

Richard Goodwin, 69, was arrested for abuse and neglect of an elderly and disabled person after deputies found she was living in deplorable conditions.

Richard Goodwin, 69, was arrested for abuse and neglect of an elderly and disabled person after deputies found she was living in deplorable conditions. (Pinellas County Sheriff’s Office)

The sheriff’s department said this was Goodwin’s second arrest for abuse and neglect of the same victim. He was previously arrested in May 2018.

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Neighbor Victoria Muenzerbeer told FOX 13 that Goodwin and the victim were hoarders and the conditions inside the home were horrible years ago when she visited once.

“I went in and it was absolutely, a human being couldn’t live there,” she said. “The kitchen wasn’t usable and part of the wall was falling in.”

Source: Fox News National

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Libyan Minister of Economy Ali Abdulaziz Issawi speaks during an interview with Reuters in Tripoli
Libyan Minister of Economy Ali Abdulaziz Issawi speaks during an interview with Reuters in Tripoli, Libya April 25, 2019. REUTERS/Hani Amara

April 26, 2019

By Ulf Laessing

TRIPOLI (Reuters) – Libya’s U.N.-recognized government has budgeted up to 2 billion dinars ($1.43 billion) to cover costs of a three-week-old war for control of the capital, such as treatment for the wounded, to be funded without new borrowing, the economy minister said.

Ali Abdulaziz Issawi suggested the government hoped for business to continue more or less as usual despite the assault on Tripoli, in the country’s northwest, by forces tied to a parallel administration based in the eastern city of Benghazi.

Once Africa’s third largest producer of oil, Libya has been riven by factional conflict since the fall of Muammar Gaddafi in 2011, with the country now broadly split between eastern-based forces under Khalifa Haftar and the U.N.-backed government in Tripoli, in the west, under Prime Minister Fayez al-Serraj.

Still, with Haftar’s Libyan National Army forces unable so far to pierce defenses in Tripoli’s southern suburbs, normal life and business activities continue in much of the capital and western coastal towns.

Issawi, in an interview with Reuters in his Tripoli office, also said Libya’s commercial ports and wheat imports were still functioning normally, although some roads have been blocked.

He said the Serraj government estimates it will spend up to 2 billion dinars extra on medical treatment for wounded, aid for displaced people and other “emergency” war costs.

He said this was not military spending but analysts believe that the sum will also cover expenditures such as pay for allied armed groups or food for fighters.

“We could actually spend less,” he added, in comments that gave the first insight into the economic impact of the fighting.

Issawi said the Tripoli government, which controls little territory beyond the greater capital region, would not incur new debt to fund the war costs, sticking to a plan to post a 2019 budget without a deficit.

Tripoli derives revenue largely from oil and natural gas production, interest-free loans from local banks to the central bank, and a 183 percent surcharge on foreign exchange transactions conducted at official rates.

But with centralized tax collection greatly diminished, public debt has piled up – to 68 billion dinars in the west, including unpaid state obligations such as social insurance.

Some analysts expect Serraj’s government will be forced to raise new debt if the war for control of Tripoli drags on.

With much of Libya dominated by armed factions that also act as security forces, the public wage bill for both the western and eastern administrations has soared as fighters have been made public employees in efforts to buy their loyalty.

The east has sold bonds worth 35 billion dinars outside the official financial system as the Tripoli central bank does not fund the parallel government apart from some wages.

Despite its limited reach, the Tripoli government still runs an annual budget of around 46.8 billion dinars, mainly for public salaries and fuel subsidies.

“This year we cannot finance via debt…we will not borrow (by agreement with the central bank),” Issawi said.

According to International Monetary Fund data, Libya’s central government debt-to-GDP ratio is 143 percent, making it one of the most heavily indebted in the world on that measure.

Issawi declined to say what parts of the budget would be trimmed to support the extra outlay for war costs.

However, with some 70 percent of the budget allocated to public wages, fuel subsidies and other welfare benefits, a portion devoted to infrastructure is most likely to be axed.

Widespread lawlessness has meant there have been no major infrastructural projects since 2011, when a NATO-backed uprising overthrew dictator Muammar Gaddafi, leaving schools, hospitals and roads in acute need of restoration.

FOREX SURCHARGE

Issawi said the government planned to raise as much as 30 billion dinars by the end of 2019 from hard currency deals after imposing in September a 183 percent surcharge on commercial and private transactions done on the official rate of 1.4 to the U.S. dollar. That fee has effectively devalued the official rate to 3.9, much closer to the black market equivalent.

Some 17 billion dinars have been raised since then, with hard currency allocated for import credit letters now issued without delays, Issawi said. The forex fee has helped the government forecast a budget in the black for 2019.

Despite the narrowing spread between the two rates, the black market continues to thrive. Dozens of traders remained at their favorite spot behind the central bank headquarters in Tripoli when Reuters reporters visited it last week.

But traders said it could take time for the Serraj government to register the extra forex receipts as official banking channels were taking up to six months to approve import financing, keeping the black market in play for dealers.

Issawi said authorities planned to lower the forex fee from 183 percent, without saying when. The black market rate has dropped from 6 to around 4.1 since September but it has hardly moved of late as demand for black market cash remains high.

The Tripoli government has stopped subsidizing food and bread, which used to be cheaper than drinking water in Libya. Wheat imports are now being arranged by private traders and there are surplus stocks of flour at the moment, Issawi said.

(Reporting by Ulf Laessing in Tripoli with additional reporting by Karin Strohecker in London; Editing by Mark Heinrich)

Source: OANN

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