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Doubts grow over Merkel's heir apparent as German chancellor

Yahoo World News Feed - October 16, 2019 - 12:52am

Annegret Kramp-Karrenbauer's path to succeed Angela Merkel as Germany's chancellor seemed clear when she replaced her as leader of the governing Christian Democrats (CDU) last December. Ten months later, members of her own party are debating whether AKK, as she is widely known, is the right person to lead the European Union's most powerful country and biggest economy.


Hong Kong leader forced to abandon state of the union address amid protests

Yahoo World News Feed - October 16, 2019 - 12:49am

Hong Kong’s embattled leader Carrie Lam abandoned a state-of-the-union style address after opposition politicians heckled her in chaotic scenes inside the city’s legislative chamber. As protesters gathered on the outskirts of the building, Ms Lam tried twice to deliver her speech while lawmakers projected a protest slogan behind her, forcing her to leave the chamber and release her remarks in an online video. Her speech had been billed as an attempt to win the hearts and minds of Hong Kong residents as pro-democracy protests disrupting the city enter a fifth month. In an attempt to restore calm, Ms Lam pledged a range of social and economic measures, largely aimed at lowering the cost of living – particularly housing, by shortening the waiting time for public housing. But Ms Lam’s policies – perhaps welcome to some young protesters who find it near-impossible to own a house – appear a short-term solution to a long-term political problem that is unlikely to be solved in the way activists are demanding.  A line of police officers ride an escalator behind a protester holding an umbrella Credit: AMMAR AWAD/REUTERS One main tenet protesters have called for are democratic reforms to allow for direct leadership elections, to put in place a government they feel will be more representative. To that end, Ms Lam made made clear “any acts that advocate Hong Kong’s independence and threaten the country’s sovereignty, security and development interests will not be tolerated.” Hong Kong instead will remain under the “one country, two systems” principle. The policy, in place since the former British colony was returned to Beijing rule, was meant to keep in place freedoms in the city not seen in mainland China, led by the ruling Communist Party.  “Carrie Lam attempted to win people over by introducing these policies [but] she will not succeed. She failed to address the core issues,” said Alvin Yeung, a pro-democracy lawmaker. Her policy speech was “the last chance to address these pressing issues.”  But Hong Kong people have grown increasingly irate as growing Communist Party influence has led to eroding rights, the issue that broadly underpins the ongoing protests that now form the most public, direct opposition to president Xi Jinping since he took the reins in 2012.  As unrest continues, politicians in the UK and US have grown more vocal for Beijing to seek a humane resolution, as state media videos of military buildup in neighbouring Shenzhen, sending an ominous sign.  On Tuesday, the US House passed by unanimous voice vote four pieces of legislation taking a hard line on China, three of which were related to the protests in Hong Kong, drawing condemnation from Beijing. One of the measures, the Hong Kong Human Rights and Democracy Act, would require the US secretary of state to certify annually that Hong Kong remained sufficient autonomous to keep receiving special treatment that has allowed it to be a global financial hub. Another measure would bar commercial exports of military and crowd-control gear that Hong Kong police could use against demonstrators.  In June, the UK halted all new export licenses of crowd-control equipment to Hong Kong.


Afghan refugee's 'Dream' coffee shop in Iran becomes reality

Yahoo World News Feed - October 16, 2019 - 12:33am

With each serving of French press coffee poured delicately into a cup with steamed milk, 21-year-old Afghan refugee Fatemeh Jafari lives out a dream in her basement coffee shop in Tehran that is out of reach for millions like her in Iran. Jafari hopes her "Telma Cafe" ("Dream Cafe") in Tehran will help bridge the divide between Afghans and Iranians and fight the xenophobia many Afghans face in Iran.


The Biggest Opponents of German Fiscal Stimulus Are Coming Round

Yahoo World News Feed - October 16, 2019 - 12:25am

(Bloomberg) -- The German political class is preparing itself to deliver bold fiscal stimulus if the economy needs it.Lawmakers from Chancellor Angela Merkel’s Christian Democrat-led group have been among the most crucial opponents of finance ministry plans to respond to an economic hit and their stance is beginning to soften, according to two people familiar with party discussions.Critically, the CDU caucus in the Bundestag would be ready to break its long-held commitment to a balanced budget -- the much heralded “black zero” -- if a downturn required a more powerful reaction, according to one of the people, a member of the parliamentary group.German bonds fell, with 10-year yields rising two basis points to -0.4%, the highest level since July 30, and the euro strengthened 0.2% to $1.1049 as of 8:15 a.m. in Berlin.Europe’s largest economy already contracted in the second quarter and may have entered recession over the past three months as the global trade war buffets its export-led economy. Germany could suffer another hit if the Brexit negotiations unravel over the next week or the conflict in Syria spirals out of control.And that is focusing minds in Berlin.Read More: The Plot to Scrap Germany’s Balanced Budgets Has Already BegunMerkel has hinted as much herself. She still insists the next generation should not inherit an unwieldy debt load. But last week she balanced that by saying Germans shouldn’t become obsessed with a balanced budget -- investing in the future, including with a new climate package, is also a priority.“This is not about taking up budgetary issues alone and saying the ‘black zero’ is our fetish,” Merkel said in an Oct. 10 speech to a trade union in Nuremberg.Just on Tuesday, the International Monetary Fund cut its forecast for German growth, predicting an expansion of only 0.5% this year. It reiterated its call for the country to ramp up budget stimulus.In a time of cheap credit and global economic disruption, the finance ministry under Social Democrat Olaf Scholz is already shifting away from decades of economic dogma focused on public savings. The government has drawn up a raft of options, including subsidies for electric car sales and tax cuts, that could be set into motion if needed, according to people with knowledge of the plans.The IMF said that Germany should take account of low borrowing costs to invest, “even from a pure cost-benefit perspective.”In August, Scholz, who is making a bid to lead Germany’s Social Democrats, suggested the government could muster up to 50 billion euros ($55 billion) of extra spending in a crisis. That figure matches the extra borrowing deployed in the global financial crisis a decade ago.“We’re in a position, with the financial fundamentals we have, to respond with many, many billions, if indeed an economic crisis erupts in Germany and Europe,” Scholz told parliament in September. “And we will do it. That’s Keynesian economics come alive, if you will.”Read More: German Fiscal Stimulus Already Creeping In, Whatever Merkel SaysBut while the finance ministry is increasingly ready to embrace public spending, it needs allies in Merkel’s party and its Bavarian sister group, the Christian Social Union. That bloc has long been a bastion of the fiscal discipline championed by Scholz’s predecessor as finance chief, Wolfgang Schaeuble.Getting Germany to use its fiscal space to bolster the economy has become a priority for European Central Bank President Mario Draghi and his imminent successor, Christine Lagarde. He told journalists last month that it’s “high time for the fiscal policy to take change” in the region.Part of the shift has to do with a growing recognition that Germany should take advantage of historically low interest rates to invest in upgrading its infrastructure. As part of the climate package unveiled last month, Merkel’s coalition agreed to pump 1 billion euros a year into the state rail operator, Deutsche Bahn.Unspent FundsMerkel’s caucus colleagues still won’t be shifting on the so-called debt brake which limits German deficit spending, according to the CDU lawmaker. And he also insisted that a shortage of shovel-ready projects and too much bureaucracy rather than a shortage of cash -- the state has plenty of unspent funds already earmarked. But the CDU is coming round all the same.If the economy takes a further hit, the first line of defense will be increased payments from Germany’s vast social insurance system, likely to outstrip dwindling tax income and blow a hole in the budget, the two officials said. After that planners will weigh a more aggressive response, they said.The economic clouds on the horizon are adding to a sense of urgency. Europe’s largest economy reported an unexpected decline in joblessness last month. A crisis “is not in view, but indicators show that no turnaround is in sight either,” the Economy Ministry said Monday in its monthly report.(Updates with markets in the fourth paragraph.)\--With assistance from Birgit Jennen, Craig Stirling and John Ainger.To contact the reporter on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.netTo contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Richard BravoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


A Brexit Deal Would Offer Parliament Two Types of Misery

Yahoo World News Feed - October 16, 2019 - 12:00am

(Bloomberg Opinion) -- If British and European Union negotiators are indeed inching toward a point where they can present a Brexit deal for approval, the U.K. parliament will soon have a historic decision to make on whether to back it. For many lawmakers, it would be a choice between two different types of misery.Opponents of Brexit, or this particular deal, would voice strong objections to whatever Johnson brings back — if indeed he gets it past his stubborn allies in Northern Ireland’s Democratic Unionist Party. But would Brexit-weary voters forgive a party that turned down a deal now? Johnson is betting they wouldn’t.Winning support from his own Conservative MPs should be more straightforward for Johnson than it was for Theresa May, his predecessor in No. 10. Lee Rowley, a Tory MP who opposed May’s deal three times, was speaking for others too when he said on Monday: “For the health of our democracy and to restore faith in this most venerable of institutions, in my view we simply must get Brexit done.”The so-called Spartans among Conservative lawmakers who refused to support May’s withdrawal deal have given signs they’ll back their new leader. They’re deeply worried that further delays to Brexit will hurt the Conservatives’ chances at an imminent general election and increase the likelihood of the U.K. not quitting the EU at all.It helps that some arch-Brexiters are now on the government payroll. Jacob Rees-Mogg, leader of the House of Commons, has even suggested that if Johnson comes back with terms like those he described previously as “cretinous” when they had May’s name on them, he’d probably support them.That wall of endorsement might crumble if the DUP withheld their blessing; and EU officials believe Johnson won’t give the green light to a deal unless he’s sure the DUP will back it. Arlene Foster, the party’s leader, said of his potential deal on Tuesday evening: “It would be fair to indicate gaps remain and further work is required.” The prime minister’s proposed concessions to Brussels are thought to include customs checks between the U.K. mainland and Northern Ireland, anathema to unionists.But maybe the DUP can be bought off by promises of billions of extra cash from Westminster for Northern Ireland. And Johnson will have been buoyed somewhat by potential support for his putative deal from some Brexiter MPs in the opposition Labour Party.Indeed, Labour’s mightily complicated Brexit position will look even more awkward if Johnson did somehow come back to Parliament with a deal and DUP support. The party leader Jeremy Corbyn’s Brexit strategy has assumed an almost infinite level of public patience: First win a general election (which will have to take place soon given Johnson’s lack of a majority), then renegotiate the Brexit deal and then hold a referendum on whether to remain or leave with Labour’s deal. With the British public exhausted by Brexit, a Johnson deal would look like more of an election winner for the Tories. Any deal vote in Parliament will almost certainly include an amendment demanding the agreement be put to the people in a confirmatory referendum. Some Labour MPs favor the party backing such a referendum before agreeing to a new general election. But that would require another long extension of the Brexit process, again not something that’s going to be loved by many British voters. The position of the centrist Liberal Democrats, revived under leader Jo Swinson as the Stop Brexit party, will be important. The Lib Dems support a “people’s vote” on any agreed Brexit deal, although their preference is to revoke Brexit altogether. But if getting a referendum required a vote of no-confidence in Johnson, Swinson has refused to back even a temporary replacement government with Corbyn in charge. So the Labour leader would have to let someone else become prime minister or Swinson would have to accept him in Downing Street. Neither outcome looks likely.In other words, all parties are considering not just the terms of Johnson’s possible deal but the terms on which they will fight the election. A vote for a deal would be a vote to end this phase of the Brexit negotiations and pave the way for the general election, although it would strengthen Johnson going into it. A vote against a deal would probably mean an extension from the EU to the Oct. 31 Brexit deadline and more uncertainty, perhaps still including an election. Voters again may reward Johnson for his efforts to break the impasse and penalize MPs who got in the way. The stakes are high for another reason too: An exit deal is just the beginning. A bigger, more important, negotiation on the future U.K.-EU trading relationship starts after that. The next government will shape that as well as Britain’s economic direction generally. For the past three years, lawmakers have agreed repeatedly that they don’t want a no-deal exit, but they haven’t found a majority for anything else. Even with the relief that might come from a deal, it’s not hard to see why they might struggle to say yes now.To contact the author of this story: Therese Raphael at traphael4@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.


A Brexit Deal Would Offer Parliament Two Types of Misery

Yahoo World News Feed - October 16, 2019 - 12:00am

(Bloomberg Opinion) -- If British and European Union negotiators are indeed inching toward a point where they can present a Brexit deal for approval, the U.K. parliament will soon have a historic decision to make on whether to back it. For many lawmakers, it would be a choice between two different types of misery.Opponents of Brexit, or this particular deal, would voice strong objections to whatever Johnson brings back — if indeed he gets it past his stubborn allies in Northern Ireland’s Democratic Unionist Party. But would Brexit-weary voters forgive a party that turned down a deal now? Johnson is betting they wouldn’t.Winning support from his own Conservative MPs should be more straightforward for Johnson than it was for Theresa May, his predecessor in No. 10. Lee Rowley, a Tory MP who opposed May’s deal three times, was speaking for others too when he said on Monday: “For the health of our democracy and to restore faith in this most venerable of institutions, in my view we simply must get Brexit done.”The so-called Spartans among Conservative lawmakers who refused to support May’s withdrawal deal have given signs they’ll back their new leader. They’re deeply worried that further delays to Brexit will hurt the Conservatives’ chances at an imminent general election and increase the likelihood of the U.K. not quitting the EU at all.It helps that some arch-Brexiters are now on the government payroll. Jacob Rees-Mogg, leader of the House of Commons, has even suggested that if Johnson comes back with terms like those he described previously as “cretinous” when they had May’s name on them, he’d probably support them.That wall of endorsement might crumble if the DUP withheld their blessing; and EU officials believe Johnson won’t give the green light to a deal unless he’s sure the DUP will back it. Arlene Foster, the party’s leader, said of his potential deal on Tuesday evening: “It would be fair to indicate gaps remain and further work is required.” The prime minister’s proposed concessions to Brussels are thought to include customs checks between the U.K. mainland and Northern Ireland, anathema to unionists.But maybe the DUP can be bought off by promises of billions of extra cash from Westminster for Northern Ireland. And Johnson will have been buoyed somewhat by potential support for his putative deal from some Brexiter MPs in the opposition Labour Party.Indeed, Labour’s mightily complicated Brexit position will look even more awkward if Johnson did somehow come back to Parliament with a deal and DUP support. The party leader Jeremy Corbyn’s Brexit strategy has assumed an almost infinite level of public patience: First win a general election (which will have to take place soon given Johnson’s lack of a majority), then renegotiate the Brexit deal and then hold a referendum on whether to remain or leave with Labour’s deal. With the British public exhausted by Brexit, a Johnson deal would look like more of an election winner for the Tories. Any deal vote in Parliament will almost certainly include an amendment demanding the agreement be put to the people in a confirmatory referendum. Some Labour MPs favor the party backing such a referendum before agreeing to a new general election. But that would require another long extension of the Brexit process, again not something that’s going to be loved by many British voters. The position of the centrist Liberal Democrats, revived under leader Jo Swinson as the Stop Brexit party, will be important. The Lib Dems support a “people’s vote” on any agreed Brexit deal, although their preference is to revoke Brexit altogether. But if getting a referendum required a vote of no-confidence in Johnson, Swinson has refused to back even a temporary replacement government with Corbyn in charge. So the Labour leader would have to let someone else become prime minister or Swinson would have to accept him in Downing Street. Neither outcome looks likely.In other words, all parties are considering not just the terms of Johnson’s possible deal but the terms on which they will fight the election. A vote for a deal would be a vote to end this phase of the Brexit negotiations and pave the way for the general election, although it would strengthen Johnson going into it. A vote against a deal would probably mean an extension from the EU to the Oct. 31 Brexit deadline and more uncertainty, perhaps still including an election. Voters again may reward Johnson for his efforts to break the impasse and penalize MPs who got in the way. The stakes are high for another reason too: An exit deal is just the beginning. A bigger, more important, negotiation on the future U.K.-EU trading relationship starts after that. The next government will shape that as well as Britain’s economic direction generally. For the past three years, lawmakers have agreed repeatedly that they don’t want a no-deal exit, but they haven’t found a majority for anything else. Even with the relief that might come from a deal, it’s not hard to see why they might struggle to say yes now.To contact the author of this story: Therese Raphael at traphael4@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.


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