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FILE PHOTO: Britain’s Chancellor of the Exchequer Philip Hammond is seen outside Downing Street in London, Britain, April 3, 2019. REUTERS/Toby Melville
April 4, 2019
By Andy Bruce
LONDON (Reuters) – An end to austerity in Britain does not mean all government departments will see their budgets keep pace with inflation, Conservative finance minister Philip Hammond said on Friday.
Last year Hammond announced that years of self-enforced thrift over government spending was coming to an end, a claim parliament’s Treasury Committee criticized as “imprecise” and lacking in detail.
On Friday he spelled out more about what an end to austerity would mean for a multi-year review of government spending due toward the end of the year alongside his annual budget.
“All Spending Reviews are about prioritization and efficiency, and it would be odd to define ending austerity as meaning that every department sees an annual real terms increase in its budget,” Hammond said in a letter to the chair of the Treasury Committee, Nicky Morgan.
Day-to-day spending on public services was likely to rise 1.2 percent a year above inflation over the coming years, compared with an average real-terms fall of 1.3 percent a year between 2015 and 2020, and double that in the five years before.
The last spending review before the financial crisis, conducted by a Labour government in 2007, envisaged real-terms cuts to spending on foreign affairs, justice, and the administration of pensions and social benefits.
Delivering faster job growth, a higher minimum wage and lower income tax bills for many workers also counted toward ending austerity, Hammond added.
Morgan said Hammond’s comment was “noteworthy”.
Britain’s budget deficit looks on track to drop to its lowest since 2001/02 at just over 1 percent of national income in the 2018/19 financial year that has just ended, down from 10 percent just after the global financial crisis in 2009/10.
Last month, Hammond said he could free billions of pounds for extra public spending or tax cuts, as long as parliament resolves its Brexit impasse.
Britain could ask the European Union for a long Brexit delay next week if crisis talks between Prime Minister Theresa May’s government and the opposition Labour Party fail to find a way out of the impasse over the divorce from the European Union.
It is nearly three years since the United Kingdom shocked the world by voting 52 percent to 48 to leave the bloc. Supporters of Brexit fear betrayal and opponents are pushing for another referendum.
Hammond last month repeated his forecast that there would be a Brexit deal “dividend” as companies regained confidence, despite criticism from the Treasury Committee over his use of the phrase.
(Editing by David Milliken)
Source: OANN
FILE PHOTO: U.S. President Donald Trump talks with Energy Secretary Rick Perry after delivering remarks during an “Unleashing American Energy” event at the Department of Energy in Washington, U.S., June 29, 2017. REUTERS/Carlos Barria/File Photo
April 4, 2019
By Timothy Gardner
WASHINGTON (Reuters) – The flagship of the Trump administration’s advanced nuclear power research program could cost about 40 percent more than a government official estimated earlier this year, a U.S. Department of Energy document shows.
Energy Secretary Rick Perry has tried to breathe life into the country’s nuclear power industry, which is suffering in the face of competition from plants burning cheap natural gas as well as falling costs for wind and solar power.
Perry announced the versatile test reactor, or VTR, in late February, saying it was a “key step to implementing President (Donald) Trump’s direction to revitalize and expand the U.S. nuclear industry,” and critical for national security.
The VTR would allow U.S. companies to conduct advanced technology and fuels tests without having to go to competitors in Russia and China, Perry said. Meant to be built by late 2025, it would be the first new nuclear test reactor built by the Energy Department, or DOE, in many decades.
Perry did not put a price on the reactor, which would be led by the department’s Idaho National Laboratory. But an internal DOE document dated Jan. 22, obtained by public policy group the Union of Concerned Scientists (UCS) through a freedom of information request, puts the estimated cost for construction and starting the VTR at $3.9 billion to $6 billion. The document, seen by Reuters on Thursday, had not been reported previously.
The high end of that range is nearly 42 percent more than an estimate by Kemal Pasamehmetoglu, the head of the Idaho National Laboratory’s VTR program, who was quoted in the Morning Consult news outlet in February saying it would cost up to $3.5 billion in today’s dollars.
The UCS estimated that VTR’s cost for the next seven years would be about $550 million to $850 million annually, compared to the $740 million appropriated in the fiscal year 2019 budget for the department’s entire advanced nuclear technology development, which contained just $65 million for VTR.
If successful, the VTR is meant to lead to a new wave of so-called fast reactors, reviving nuclear power companies. Fast reactors breed their own fuel, unlike today’s fleet of light water reactors. They also have a safety benefit of allowing a plant to operate under low pressure conditions.
But critics worry that the fuel cycle of fast reactors will likely depend on the reprocessing or recycling of plutonium or uranium, both of which can be used as fissile materials for nuclear weapons.
“Fast reactors are less safe, less secure, and more proliferation-prone than light-water reactors,” said Ed Lyman, a senior scientist at UCS. “The DOE should not be asking taxpayers to spend billions on this dangerous reactor.”
Lyman also said cheaper approaches to advanced nuclear power could be developed at Oak Ridge National Laboratory, the DOE-sponsored research and development center in Tennessee.
The DOE did not immediately respond to a request for comment.
VTR has already led to business for nuclear companies. In November, the Idaho lab said it had contracted GE Hitachi Nuclear, a venture between General Electric Co and Hitachi Ltd, to support the conceptual design and safety activities for an unspecified amount.
(Reporting by Timothy Gardner; Editing by Tom Brown)
Source: OANN
FILE PHOTO – Ethiopian Federal policemen stand at the scene of the Ethiopian Airlines Flight ET 302 plane crash, near the town of Bishoftu, southeast of Addis Ababa, Ethiopia March 11, 2019. REUTERS/Tiksa Negeri/File Photo
April 4, 2019
By Jason Neely
ADDIS ABABA (Reuters) – Ethiopia Airlines’ doomed 737 MAX jet hit excessive speed and was forced downwards by a wrongly-triggered automation system as pilots wrestled to regain control, a preliminary report into the crash that has shaken the aviation world showed on Thursday.
Three times the captain Yared Getachew cried “pull up”, before the Boeing plane plunged into a field six minutes after takeoff from Addis Ababa last month, killing all 157 passengers and crew, said the report by Ethiopian investigators.
The disaster – and parallels with another 737 MAX crash in Indonesia where 189 people died last October – has led to the grounding of Boeing’s flagship model.
It has also brought uncomfortable scrutiny over new software, pilot training and regulatory rigor.
While the Ethiopian Civil Aviation Authority’s Accident Prevention and Investigation Bureau had a remit to investigate rather than blame, it implicitly pointed the finger at Boeing by defending the pilots, recommending the U.S. company fix its control systems, and saying regulators must be certain before allowing the MAX back in the air.
“The crew performed all the procedures repeatedly provided by the manufacturer but was not able to control the aircraft,” Transport Minister Dagmawit Moges told a news conference.
“Since repetitive uncommanded aircraft nose down conditions are noticed … it is recommended that the aircraft control system shall be reviewed by the manufacturer.”
Boeing, the world’s biggest planemaker and one of the United States’ most important exporters with a $500 billion order book for the MAX, says a new software fix for its anti-stall system will enable pilots to always override if necessary.
According to the report by the Ethiopian investigators, an alarm indicating excess speed was heard on the cockpit voice reporter as the jet reached 500 knots (575 miles per hour) – well above operational limits.
FRAGMENTS IN A CRATER
The plane had faulty “angle of attack” sensor readings, its nose was pushed down automatically, and the crew lost control despite following recommended instructions, it said.
“Most of the wreckage was found buried in the ground,” the report said, indicating the strength of the impact on an arid field in an agricultural zone. No bodies were recovered, only charred fragments among the debris in a crater.
Boeing has seen billions wiped off its market value since the crash, but its shares actually rose 2.4 percent on Thursday. Morgan Stanley said the report of flight control problems, which Boeing was already trying to fix, meant a “worst case scenario” of a new cause was probably off the table.
Families of the victims, regulators and travelers around the world have been waiting to find out to what extent Boeing technology or the pilots’ actions played a role.
A final report is due within a year.
The preliminary report into the Lion Air disaster in Indonesia suggested pilots also lost control after grappling with so-called MCAS software, a new automated anti-stall feature that repeatedly lowered the nose based on faulty sensor data.
“It had to take a second disaster to wake up the major players to pay attention to something that could’ve been resolved after the first disaster,” said one woman, who lost her father in the Ethiopian crash, asking not to be named.
“Whatever the issues were, they better be 110 percent sure about their resolution, otherwise the 157 lives lost would have been for nothing if something like this happens again. This is a lesson to not take shortcuts in order to try and save bucks.”
“PROFITS OVER SAFETY”?
U.S. regulator the Federal Aviation Administration, under fire for its certification of the MAX, cautioned the inquiry was not over. “As we learn more about the accident and findings become available, we will take appropriate action,” it said.
Boeing may press to know how crew members responded to problems triggered by the faulty data. Questions on whether the pilots had leveled out the plane before disengaging MCAS and how many times MCAS activated were not answered at the news conference in Addis Ababa that lasted about 40 minutes.
The New York Times quoted Dagmawit as saying pilots turned MCAS off and on, which is not the step recommended in published Boeing procedures telling crew to leave it off once disabled.
With bereaved families angry and confused, relatives of one woman killed in the Ethiopian crash filed the first lawsuit on behalf of a U.S. victim in Chicago.
The complaint accused Boeing of putting “profits over safety” and also targeted Rosemount Aerospace, the manufacturer of the angle of attack sensor.
U.S. consumer activist Ralph Nader, whose niece died in Ethiopia, called for consumers to boycott the MAX.
Pilots around the world were watching closely too.
“If the preliminary report from the Ethiopian authorities is accurate, the pilots quickly identified the malfunction and applied the manufacturer’s checklist,” said Captain Jason Goldberg, spokesman for Allied Pilots Association, which represents American Airlines pilots.
“Following this checklist did not appear to allow the pilots to regain control of the aircraft.”
(Reporting by Jason Neely in Addis Ababa, Eric Johnson in Seattle, Katharine Houreld and Maggie Fick in Nairobi, Tim Hepher in Paris, Jamie Freed in Singapore, Tracy Rusinski in Chicago, David Shepardson in Washington; Writing by Andrew Cawthorne; Editing by Alexandra Hudson)
Source: OANN
FILE PHOTO: The robusta coffee fruits are seen in Sao Gabriel da Palha, Espirito Santo state, Brazil May 2, 2018. REUTERS/Jose Roberto Gomes
April 4, 2019
By Marcelo Teixeira
SAO PAULO (Reuters) – The Brazilian government is considering offering put options to coffee producers as a way to shore up prices at a 13-year low and assure a minimum income for struggling farmers, two people with knowledge of the talks told Reuters on Thursday.
The program, if approved, would give producers the right to sell their crops to the government at a fixed price, setting a floor for coffee prices in the world’s largest coffee producer and exporter. That would likely force buyers to pay more for Brazilian coffee and encourage other coffee-growing countries to follow suit.
Producers have been pressuring Brasilia to offer put options and rebuild government bean inventories that had been sold off earlier this decade.
“We have talked to the government and they liked the idea,” a director at a Brazilian coffee cooperative told Reuters.
“It would be a win-win program. Farmers can be guaranteed better prices, and the government can later profit from the sales of that coffee when prices recover,” he said.
Another industry source said he had also heard about the talks from producers that he advises. That source said that many details still needed to be worked out, such as the program’s size and the level of the price floor.
The sources asked for anonymity because they were not authorized to speak publicly about the issue.
Brazil’s Agriculture Ministry did not respond to a request for comment.
Coffee prices in New York hit a fresh 13-year low this week as output surpasses demand in the global market. Arabica prices were trading at 95.20 cents per pound on Thursday, down 0.16 percent.
The Brazilian government has been active in the coffee market in the past, intervening with policies to help farmers when market prices were at or below production costs.
Brazil last used options in 2013, when it offered contracts for farmers to sell up to 3 million bags to the government at a fixed price. The put options required coffee producers to pay a small fee for the right to sell their coffee to the government.
If market prices are below the fixed price set for the options when they expire, the producer normally exercises the option and delivers the product to government warehouses.
The Brazilian government sold off the beans acquired in the 2013 program when prices recovered and by 2017 had eliminated its coffee inventories.
One obstacle for the program would be the potential cost to the government of billions of reais at a moment when President Jair Bolsonaro has pledged to rein in public spending and reduce a large budget deficit.
Even if the Agriculture Ministry agrees to the idea, it would have to pass muster with Economy Minister Paulo Guedes, who has vowed to cut industry-specific subsidies, before getting Bolsonaro’s signature.
The first source said the idea would be to launch the program in 2020, when Brazil is expected to produce a larger crop, based on its biennial coffee production cycle.
2019 is an off-year for Brazil’s coffee fields, and the government expects production to fall to between 50.5 million and 54.5 million 60-kg bags from the record of 61.6 million bags produced in 2018.
(Reporting by Marcelo Teixeira; Editing by Brad Brooks, Brad Haynes, Phil Berlowitz)
Source: OANN
Ever since the beginning of the “Powell Pause,” Peter Schiff has been saying it won’t be enough.
“If the Fed doesn’t want to upset the markets, soon it will be forced to go back to QE and zero percent interest rates.”
Peter isn’t alone in saying this. After the most recent FOMC meeting, Ryan McMaken at the Mises Institute echoed Peter’s message.
“Put simply: the days of quantitative easing are back, and we’re not even in a recession yet.”
Of course, a lot of people in the mainstream are cheering the Fed, saying the central bank is making the right move. The stock market certainly likes the dovish Fed. But as Peter said after the last FOMC meeting, “The Fed is not getting it right.”
“What the Fed is doing now just proves how much they got wrong in the past. The reason the Fed had to abort the process prematurely is because they couldn’t finish it. The reason they had to stop raising rates was because they couldn’t keep raising them because we have too much debt. The reason they had to call off the reduction of their balance sheet was because they can’t do it. The Fed can’t do what they were pretending they were going to be able to do the entire time.”
McMaken also asserts that the Federal Reserve has got it all wrong. He focuses on two consequences of the Fed’s easy-money policy: inflation and wealth inequality.
Mike Adams exposes the agenda of the private Fed as a war against the prosperity of Americans that simply want to make America great.
The following article by Ryan McMaken was originally published at the Mises Wire. The views expressed do not necessarily reflect those of Peter Schiff or SchiffGold.
The Federal Reserve’s Federal Open Market Committee voted unanimously to keep the federal funds rate unchanged. Overall, the FOMC signaled it has made a dovish turn away from the promised normalization of monetary policy which the Fed has promised will be implemented “someday” for a decade.
Although the Fed began to slowly raise rates in late 2016 — after nearly a decade of near-zero rates — the target rate never returned to even three percent, and thus remains well below what would have been a more normal rate of the sort seen prior to the 2008 financial crisis.
Much of the Fed’s continued reluctance to upset the easy-money apple cart comes from growing concerns over the strength of the economy. Although job growth numbers have been high in recent years — and this has been assumed to be proof of a robust economy — other indicators point toward less strength. Workforce participation numbers, wage growth, net worth numbers, auto-loan delinquencies and other indicators suggest many Americans are in a more precarious position than headlines might suggest.
The Fed’s refusal to follow through on raising rates, however, has highlighted this economic weakness, and today’s front-page headline in the Wall Street Journal reads: “Growth Fears to Keep Fed on Hold”
Abandoning Plans to Reduce the Balance Sheet
For similar reasons, the Fed has also signaled it won’t be doing much about its enormous balance sheet which ballooned to over four trillion dollars in the wake of the financial crisis. Faced with enormous amounts of unwanted assets such as mortgage-backed securities, the Fed began buying up these assets both to prop up — and bail out — banks and to produce an artificially high price for debt of all sorts.
This kept market interest rates low while increasing asset inflation — all of which is great for both Wall Street and for the US government which pays hundreds of billions in interest on federal debt.
At best, “total balance sheet will be around $3.8 trillion, down from $4.5 trillion at its peak.” Moreover, “the Fed will soon be a net buyer of Treasurys once again,” analysts said, and some estimate “the Fed is on course to be buying $200 billion of net new Treasurys by the second half of 2020.”
Put simply: the days of quantitative easing are back, and we’re not even in a recession yet.
Some observers might simply respond with “big deal, the economy’s growing, and better yet, the Fed has given us both growth and little inflation.”
But things are not all as pleasant as they seem.
Problems with Easy-Money Policy
First of all, even by the Fed’s own measures, inflation isn’t as subdued as the headline “core inflation” or CPI measure suggests. According to the Fed’s “Underlying Inflation Gauge” which takes a broader view beyond the small basket of consumer goods used for the CPI, inflation growth over the past year has returned to the elevated levels found back in 2005 and 2006.
This hasn’t been great for consumers, and it’s been especially problematic when coupled with ultra-low interest rates. The low interest rates are a problem because people of ordinary means — i.e., the non-wealthy — don’t have the ability to access the high yield investments that wealthier investors do.
Rising Inequality
Earlier this week, finance researcher Karen Petrou explained the problem that comes from ultra-low rates which lead to yield-chasing for the wealthy:
When interest rates are ultra-low, wealthy households with asset managers acting on their behalf can play the stock market to beat zero or even negative returns. We’ve shown in several recent blog posts how wide the wealth inequality gap is and how disparate wealth sources help to make it so. However, even where low-and-moderate income households can get into the market, their investment advisers should not and often cannot chase yields. As a result, ultra-low rates mean negligible or even negative return.
Thus, ordinary people are faced with rising asset prices — driven in part by the Fed’s balance sheet purchases — while also finding themselves unable to save in a way that keeps up with inflation.
Meanwhile, the wealthy reap the most benefits from Fed policy as they’re able to more effectively engage in yield-chasing.
Ordinary people get the short end of the stick from Fed policy in other ways. Petrou continues:
“Historically, pension funds and insurance companies have invested only in the safest assets. These are now in scarce supply due in large part to QE and comparable programs by central banks around the world. Pension plans and life-insurance companies increasingly have two terrible choices: to play it safe and become increasingly unable to honor benefit obligations or to make big bets and hope for the best. Under-funded pension plans are so great a concern in the U.S. that the agency established to protect pensioners from this risk, the Pension Benefit Guaranty Corporation, faces its own financial challenges. Yield-chasing life insurers are also a prime source of potential systemic risk.”
Middle-class people who have been told for decades to rely on pensions are now imperiled by Fed policy as well.
Not surprisingly, this has led to rising income inequality. While some free-market advocates tend to dismiss inequality as an unimportant metric, this is not a good approach when we’re talking about public policy. Fed policy — and resulting inequality — does not reflect natural trends arising from market transactions. Monetary policy is something imposed on markets by policymakers. And that’s what’s going on when we witness rising inequality due to the Fed’s monetary policy.
This has been going on since the late 1980s when Alan Greenspan relentlessly opened the easy-money spigot to spur economic growth throughout the 1990s. But, there were problems that resulted, as noted by Daniell DiMartino-Booth:
[A]t the National Association for Business Economics recent annual conference, University of California-Berkeley economics professor Gabriel Zucman presented his findings on the widening divide between the “haves” and “have nots” in the U.S. His conclusion: “Both surveys and tax data show that wealth inequality has increased dramatically since the 1980s, with a top 1 percent wealth share around 40 percent in 2016 vs. 25 – 30 percent in the 1980s.” Zucman also noted that increased wealth concentration has become a global phenomenon, albeit one that is trickier to monitor given the globalization and increased opacity of the financial system.
Defenders of ultra-low policy tend to claim low rates aren’t the real culprit here because even middle-class buyers can take advantage of easy money.
But experience suggests this hasn’t been the case. Part of the problem is that banking regulations handed down by the Fed and other federal regulators make loaning to smaller enterprises and lower-income households less attractive. Writes Petrou:
“But, wasn’t there a burst of lower-rate mortgage refinancings that allowed households to reduce their debt burden and thus accumulate wealth? Did low rates allow higher-risk households at least to reduce their mortgage debt through refinancings? Again, low-and-moderate income households were left behind. They continued to seek refis after the financial crisis ebbed, but subprime borrowers current on their loans regardless of loan-to-value (LTV) ratios were less likely than prime or super-prime borrowers to receive refi loans even though higher-scored borrowers may or may not have been current and lower rates enhance repayment potential.”
The overall effect suggests the accelerating reliance on quantitative easing and near-zero interest rates has been great for some Wall Street hedge fund managers — but for those at the low end of the lending and saving apparatus, things are even more constraining than ever. It’s hard to get a loan, and it’s also hard to save.
But at least the aggregate numbers are great, right?
Well, the Fed can’t brag about even that. A policy that favors billionaires might work on paper, of course, so long as the aggregate numbers point toward sizable growth. But even those numbers are so iffy as to prompt growth fears at the FOMC, and to ensure that the Fed puts an end to its promises to return policy to something that might be called normal.
As it is, it looks like we should expect a continuation of the policies which have coincided with both an unimpressive economy and rising inequality.
If that’s not evidence of the Fed’s failure, it’s hard to imagine what is.
Gerald Celente reveals on what’s ahead as the Federal Reserve crashes the debt & real estate bubble it created worldwide.
Source: InfoWars
FILE PHOTO: Pipe assembly is pictured aboard the NordStream 2 pipe laying vessel Audacia close to Ruegen island in the Baltic Sea, Germany, November 13, 2018. REUTERS/Axel Schmidt/File Photo
April 4, 2019
By Madeline Chambers
BERLIN (Reuters) – Keen to use its presidency of the U.N. Security Council to demonstrate its commitment to multilateralism, Germany has laid itself bare to criticism from disenchanted allies of double standards on defense spending, energy and arms exports.
Powerful business interests and the compromises needed to hold together conservative Chancellor Angela Merkel’s loveless coalition with the Social Democrats (SPD) have led to go-it-alone decisions that have angered the United States, France, Britain and other Europeans.
Merkel won plaudits in Davos in January and a standing ovation at the Munich Security Conference in February for strong appeals to maintain the post-World War Two rules-based international order.
Her SPD foreign minister, Heiko Maas, is singing from the same hymn sheet.
“When faced with a new order in which great-power rivalry is back on the agenda, our response shouldn’t be: my country first. It should be a close alliance of all those committed to a rules-based international order,” he said in New York this week.
Such rhetoric rings hollow for some.
An unwavering commitment to the NordStream 2 gas pipeline from Russia has angered the United States, Ukraine and eastern European partners. A freeze on arms exports to Saudi Arabia after the murder of journalist Jamal Khashoggi led Paris to accuse Berlin of jeopardizing joint tank, combat jet and drone development.
Germany’s long insistence on austerity and refusal to rein in its large current account surplus, which reflects its export prowess, have perpetuated a view among euro zone peers that they must play to Berlin’s tune.
“IN DENIAL”
Berlin has also exasperated close allies by pouring cold water on deeper euro zone reform ideas from France, and especially by rowing back on NATO defense spending goals.
Not to mention Merkel’s unilateral disavowal of EU rules in 2015 which let migrants enter Germany, a move which most commentators say contributed to the rise of the far right.
Constanze Stelzenmueller, senior Robert Bosch Fellow at the Brookings Institution, said it is an “ultimately misguided and only semi-functional attempt” to articulate a foreign policy opposed to U.S. President Donald Trump’s “America First” stance.
“No other country has been so deeply in denial about the tension between its high-minded normative convictions and its own selective compliance with them,” she said, adding that other European countries are looking to Germany for leadership.
“Germany today is – for all its wealth and power, including soft power – also increasingly lonely, overwhelmed and beset by internal rifts,” she said, adding it risked being shaped by events, competitors and adversaries.
In its one-month presidency of the U.N. Security Council which started on Monday, the spotlight will be on Germany if any Security Council response is needed to global crises.
But with the legacy of the Nazi era and World War Two still weighing on it, Germany is wary of being seen as too assertive on the world stage. As it struggles to find a role to match its economic might, its foreign policy is deeply embedded in international bodies such as the EU, NATO and United Nations.
CREDIBILITY AT STAKE
So why, ask critics, did SPD Finance Minister Olaf Scholz last month announce plans which mean Germany will fall even shorter of a NATO goal of spending 2 percent of economic output on defense in coming years than it was previously going to?
Having previously said it would reach 1.5 percent by 2024, Scholz’s plans now see a decrease to 1.25 percent of gross domestic product by 2023.
“It doesn’t serve German credibility if we start questioning the goal of 1.5 percent by 2024 after committing to the 2 percent goal in 2014,” said Roderich Kiesewetter, a senior lawmaker in Merkel’s conservative party.
It gives ammunition to Trump, who singles out Germany for “not paying its fair share”. U.S. Vice President Mike Pence said this week Germany was a top offender, pointing out it had for generations benefited from U.S. protection of Europe.
“Whether Scholz is pandering to his own pacifist wing of his party or its anti-Americanism base, or has his sights on the chancellery, Germany’s credibility inside NATO is being dented,” wrote Judy Dempsey, a senior fellow at Carnegie Europe.
The government insists it is committed to the 2024 goal. Maas says Germany has raised defense spending by nearly 40 percent since 2014 and the defense budget will continue to rise — but the debate exposes a classic German dilemma.
“After World War Two and the Nazi era, it’s in our political DNA that military solutions are almost never the answer, rather political solutions,” said senior SPD lawmaker Thomas Oppermann.
Another major driving force is business.
Berlin has long sought to protect its powerful car industry from EU attempts to curb emissions and has also dug in its heels in over a pipeline that will secure supplies of Russian gas needed by German industry – and bypass Ukraine.
Brushing aside opposition from the United States, eastern European and Baltic states who warn that Europe will become over dependent on Russian energy, Merkel has let firms, including Uniper and BASF’s Winterhall unit, push ahead with NordStream 2.
Even after the EU imposed sanctions on Russia for annexing Crimea in 2014, Merkel insisted it was a commercial project and only last year acknowledged it had a political element and saw the need to reassure Ukraine on transit revenues.
“Allowing it to trundle along was a mix of business driving it hard and the government taking its hands off, hoping for the best – and that turned out not to be,” said Stelzenmueller.
One other factor affecting policy is Merkel’s reliance on the SPD as a coalition partner, seen in last week’s extension of an arms exports ban to Saudi Arabia.
The original ban last year, which took European partners by surprise, prompted London and Paris to warn that billions of euros of military orders were in danger.
While the SPD, seeking to win over traditional voters for regional and European elections later this year, insisted on extending the ban, they bowed to pressure from France and Britain and allowed loopholes for joint projects.
However, if Merkel is to fulfil her aim of joint European development and export of defense equipment, she may have to convince Germans to change their mindset.
“It won’t work if Germany says we are passionate Europeans but only on our terms. We must get used to the idea that we have to compromise,” said Oppermann.
(Additional reporting by Paul Carrel; Editing by Alison Williams)
Source: OANN
FILE PHOTO: A newly constructed Target store is shown in San Diego, California May 17, 2016. REUTERS/Mike Blake/File Photo
April 4, 2019
By Nandita Bose
WASHINGTON (Reuters) – Target Corp will raise its U.S. minimum wage to $13 an hour in June, from $12 currently, increasing its payroll costs and putting new pressure on rival Walmart Inc to attract retail workers in a tight labor market.
Minneapolis-based Target employs over 300,000 workers and runs 1,845 stores in the United States. The discount chain is investing billions of dollars to improve its supply chain, grow its online sales and improve delivery of merchandise to shoppers’ homes.
Target previously raised minimum hourly pay to $12 in March 2018 from $11. In 2017, Target, said it was committed to raising its minimum wage to $15 an hour by 2020. The wage increase will affect “tens of thousands” of employees, a Target spokeswoman said.
Retailers have been finding it tougher to attract workers, with U.S. unemployment at its lowest level in nearly 50 years, while there has been growing political pressure on companies to pay workers a fair living wage.
Walmart, the world’s largest retailer and the largest U.S. private sector employer, pays workers $11 an hour at entry-level. Walmart did not immediately respond to a request for comment.
Amazon.com Inc raised its minimum wage to $15 an hour in October after facing harsh criticism over poor pay and working conditions. The online retailer said at the time that it would lobby Washington for the federal minimum wage to be raised.
The $15 minimum wage movement has found support from Democrats, including Senator Elizabeth Warren, who is running for the party’s 2020 presidential nomination, and Representative Alexandria Ocasio-Cortez, part of a new crop of Democrats swept into office this year on a stronger liberal platform.
“Croissants at LaGuardia (New York airport) are going for seven dollars a piece,” Ocasio-Cortez tweeted on April 1. “Yet some people think getting a whole hour of personal, dedicated human labor for $15 is too expensive??”
Amid the growing political pressure, other companies have also moved to raise wages. For example, Costco Wholesale Corp raised its minimum wage twice in a year and since March pays employees at least $15 an hour.
In a blog post due to be published on Target’s website on Thursday, the company’s Chief Human Resources Officer Melissa Kremer tied the minimum wage hikes to the company’s strong holiday performance, saying it “made a big difference.”
In March, Target forecast 2019 profit above Wall Street estimates after a strong holiday season.
“We were able to start them all (seasonal hires) at $12 or more – and that helped us reach our seasonal hiring goal ahead of schedule, which gave our teams a lot of extra time to train and prepare for our busiest season of the year,” Kremer said.
It was not immediately clear if Target employees who already make $13 an hour will also see an increase in pay.
Target’s spokeswoman said the company would evaluate hourly pay rates for such employees and make adjustments as appropriate. With some of Target’s previous wage hikes, such employees have been entitled to an annual merit raise and a pay-grade hike.
(Reporting by Nandita Bose in Washington, Editing by Rosalba O’Brien and Lisa Shumaker)
Source: OANN
FILE PHOTO: People take part in “March for Zero Tolerance”, during the four-day meeting on the global sexual abuse crisis at the Vatican, in Rome, Italy, February 23, 2019. REUTERS/Yara Nardi/File Photo
April 4, 2019
VATICAN CITY (Reuters) – The Roman Catholic archbishop of the U.S. island territory of Guam, Anthony Apuron, has been definitively convicted of sexual abuse of minors and removed from office, the Vatican said on Thursday.
Apuron, who was accused of abusing three young men decades ago, was first convicted by a Vatican tribunal a year ago and had appealed. He has denied wrongdoing.
The tribunal of the Vatican’s Congregation for the Doctrine of the Faith upheld the first verdict, a statement said.
Apuron, 73 and a native of Guam, was removed from office and prohibited from living on the island, even temporarily, the Vatican said.
The allegations against Apuron first emerged in 2016 when one of the victims, a former altar boy, came forward when he was in his 50s and other victims followed.
The Vatican said the decision announced on Thursday was definitive and no longer could be challenged on appeal. Apuron had served as the island’s archbishop since 1986.
The Church’s credibility has been crushed in much of the world by abuse scandals in countries including Ireland, Chile, Australia, France, the United States and Poland, paying billions of dollars in damages to victims and forcing parishes to close.
The scandals have reached the upper echelons of the Vatican itself with the conviction of Cardinal George Pell, jailed this month for six years for abusing boys in his native Australia. He had served as the Vatican treasurer and a member of the pope’s innermost council of cardinals until his conviction last year.
Other senior Church officials have been accused of knowingly covering up abuse, including the archbishop of Lyon who was convicted this year in France for failing to report abuse.
Archbishop Michael Byrnes, a former assistant bishop of Detroit, succeeds Apuron as archbishop of the island’s single archdiocese, Agana.
The archdiocese, which has been hit by a number of lawsuits by victims of abuse, has filed for reorganisation bankruptcy in the island’s U.S. district court.
Guam’s population of about 170,000 is predominantly Catholic.
(Reporting By Philip Pullella, Editing by Raissa Kasolowsky, William Maclean)
Source: OANN
FILE PHOTO: Power lines connecting pylons of high-tension electricity are seen in Montalto Di Castro, Italy, August 11, 2017. REUTERS/Max Rossi/File Photo
April 4, 2019
By Ron Bousso and Susanna Twidale
LONDON (Reuters) – European oil companies have started to address what they worry may one day be an existential threat to their business — the end of a century of oil demand growth in a low carbon world.
The emergence of the electric vehicle and demand among investors and consumers for cleaner energy to limit climate change has pushed the European side of Big Oil to take baby steps towards refocusing their businesses from oil production and refining to electricity via natural gas and renewables.
Their funding for oil exploration dwarfs any alternatives, but they are buying up power generation and retail utilities to integrate with their long-standing natural gas and emerging renewables ventures.
Relatively small investments in electricity aim to help them ride the energy transition by offering households and businesses cleaner power than coal can provide and giving their petrol stations a green edge with EV charging.
Testing an electrification route also helps meet demands from shareholders that they “future proof” their businesses.
The International Energy Agency predicts regulatory changes to curb carbon emissions will mean demand for electricity will grow much faster than that for oil as Asia’s power-hungry middle class expands. The industry sees oil demand peaking any time from 2020 to 2040.
Diversification is not new to the oil and gas business and has a patchy record at best. Oil majors have bought stakes in coal, household cleaning, pet food, nutrition, shrimp trading, nappies, hotels and steel, with limited success. Critics say power will not deliver the profits the oil and gas companies need to sustain the large dividends their investors are used to.
BP lost billions in its first foray into renewables 20 years ago when it rebranded itself “Beyond Petroleum”. It closed its solar manufacturing division in 2011 and tried to get rid of its wind farms but says it now has a more successful model.
“Most of the things we do today are linked to our core capabilities,” Dev Sanyal, head of BP’s alternative energy division, told Reuters. “If you can start combining molecules and electrons in an integrated offer you start creating something of greater interest.”
PROFIT
Profit is the first challenge when joining the dots between renewables, gas-fired plants and utilities facing growing competition in markets that are fragmenting fast. None of the companies break down their results from renewables or power.
BP returned to solar in 2017 with a $200 million investment in UK solar generator Lightsource and dipped a toe into UK electricity retail the same year by buying a 25 percent stake in Pure Planet, a small challenger brand supplying some 100,000 customers with renewable electricity.
“The renewables business last year was free cash flow generative… we’ve been moving in a positive trajectory over the past three years,” Sanyal said. “Today we have industrial customers and over time there could be retail customers.”
He said BP plans to expand its alternative energy capacity – the biggest among the majors, according to CDP, a climate-focused research provider that works with major institutional investors. Gazprom’s large hydropower interests put it in second place ahead of Total and then Shell, CDP calculations show.
On retail, the French and Italians are ahead.
French giant Total ‘s purchase of Direct Energie last year gave it a portfolio of gas fired and renewable energy power plants and a platform to challenge state-controlled utility EDF .
It is targeting seven million customers in France and Belgium by 2022 and said in a recent investor presentation it aims to make low carbon electricity 15 to 20 percent of its total offering by 2040.
Eni says it is now Italy’s second largest electricity producer with six power plants, large electricity trading business and two million customers.
Shell says it wants to become the biggest electricity provider and over the past year has made a number of investments including a Brazilian gas-fired power plant and a UK utility.
Last week it renamed that utility Shell Energy and switched all 710,000 customers to 100 percent renewable electricity, offering them discounts on petrol and electric car charging in its petrol stations.
Mark Gainsborough, head of the Anglo-Dutch company’s new energy division, told Reuters it aims to grow its retail customer base in Britain.
Shell looked into acquiring the retail division of rival SSE in recent months but discussions made little progress due to concerns over the government’s decision to cap most domestic energy prices, industry sources said, an example of the risks facing power markets around the world. Both Shell and SSE declined to comment.
In a sign of the growing competition among the majors for power assets, Total is considering a rival bid to Shell for Dutch energy company Eneco, according to sources close to the matter. Total declined to comment.
Eneco is valued at around 3 billion euros and has 2.2 million customers and Shell’s Gainsborough said it could provide a template for a power business model.
“The model aspiration is to find an integrated mode with positions in trading and supply and having customer books,” Gainsborough said.
CAUTION
Former BP CEO John Browne, who drove the London-based company’s first push into renewables, said much lower production costs for wind and solar projects and a greater understanding about the future growth of power markets had changed the picture dramatically since then.
“The question is whether you have the skills, the people and the determination to make this work and are you happy that in reality the returns you make are better than the returns you make in your other business,” Browne told Reuters.
Returns on solar and wind projects are typically around 5-10 percent, according to climate research provider CDP, half of those from many oil and gas projects.
So far the oil majors have committed a small fraction of their annual investment to low-carbon technologies as they balance shareholder demands for returns and innovation.
Shell and Equinor plan to put between 5 and 6 percent of their capex investments into clean energy technologies, while Eni is targeting around 4 percent and Total and BP plan about 3 percent each, CDP research showed.
Those numbers rise with investments in gas-fired power generation but are still small enough to swallow if rivals make things difficult, particularly at the retail end, where they include supermarkets, fintech startups and Amazon.
“If at the end of the day it doesn’t work these companies have deep pockets and would be able to spin off power divisions,” said Munir Hassan, Head of Clean Energy at law firm CMS in the UK.
The differential in returns from power versus oil and gas had not changed much, he said, but there was a new impetus because perceptions among shareholders and their children had.
“Some of the oil companies will succeed,” Hassan said. “But I wonder whether they will find it more painful than they expected.”
(Additional reporting by Stephen Jewkes; editing by Philippa Fletcher)
Source: OANN
FILE PHOTO – Avocados are on display for sale at the wholesale market “Central de Abastos” in Mexico City, Mexico January 11, 2019. Picture taken January 11, 2019. REUTERS/Daniel Becerril
April 4, 2019
By Stefanie Eschenbacher
MEXICO CITY (Reuters) – U.S. President Donald Trump’s threats to shut the border with Mexico are now affecting what some might argue is the softest spot in bilateral relations – avocados.
Fearing that a border lockdown would prevent Mexico from shipping the 80 percent of avocados that the United States consumes, processors and wholesalers have started stockpiling the prized fruit used in guacamole or as spread on toast.
Avocado prices have jumped nearly 50 percent over the last week alone as a consequence.
Stefan Oliva, a research analyst at Gro Intelligence, which collects and analyzes agricultural data, said “procurement managers, wholesalers and processors” are “clamoring” for avocados in case the border is shut ahead of the Cinco de Mayo celebration.
Cinco de Mayo commemorates the 1862 Battle of Puebla in which Mexican troops defeated invading French forces and is celebrated all over the United States, but in Mexico the day is mainly celebrated in Puebla.
The United States imported nearly $2.1 billion worth in avocados from Mexico in 2018, or more than 900,000 tonnes, he said.
That is some 10 times the value of avocados it buys from the rest of the world and more than 10 times what the United States currently produces, Gro Intelligence data shows.
“Even those very, very vague threats are enough to scare wholesalers and processors that are relying on consumers,” Oliva said. “If there is a border shutdown, they will have to circumvent the border and pay an extreme premium.”
Trump has taken a step back from his threat to close the border to fight illegal immigration, as pressure mounted from companies worried that a shutdown would cause chaos to supply chains. It could disrupt millions of legal crossings and billions of dollars in trade. [nL1N21K0Q8]
David Magana, a senior analyst specializing in food and agribusiness at Rabobank, said he had observed a 44 percent jump in the price of avocados over the past week, and that it could go higher still.
“If the border closes, this would be unchartered territory,” Magana said. “The prices could rise considerably.”
Alejandro Saldana, chief economist at Ve Por Más, a Mexican bank that specializes in lending to the agricultural sector, said that a border shutdown could impact other produce.
“We could see a real impact on the industrial integration there is between Mexico and the U.S.,” Saldana said. “There will possibly be disruptions in manufacturing, particularly because a lot of the goods cross the border.”
(Reporting by Stefanie Eschenbacher in Mexico City; additional reporting by Julie Ingwersen in Chicago; Editing by Anthony Esposito and Michael Perry)
Source: OANN
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