Officials say some water and electricity facilities were damaged by projectiles amid the US-Israel bombing, and asked people to conserve resources, but no widespread outages have been reported so far.

Tehran, Iran – “The war might last weeks, so my family and I will only leave if it gets too bad. For now, life goes on,” says Sepehr, a resident of eastern Tehran.

The booming sound of explosions has been a daily reality this week where he lives, at times leaving thick smoke billowing to the horizon and shaking windows, he told Al Jazeera, asking to remain anonymous due to security reasons.

The scenes are similar across Tehran, a sprawling city of nearly 10 million people, with United States and Israeli missiles raining down in quick succession during waves of attacks that have taken place at all hours of the day since the start of the war on Saturday morning, which has killed more than 1,000 people.

Iranian officials said on Thursday that some water and electricity facilities were damaged by projectiles and asked people to conserve resources, but no widespread outages have been reported so far.

The streets of the capital are noticeably quieter and less congested than usual, and many businesses are closed. However, the basic necessities remain largely available, both in person and through online orders.

“When the bombing runs seem finished for a while, I go for a short walk once during the day to get some essentials from the local shops. There are usually queues for bread, which are not too long, and there are queues at some petrol stations,” said Marjan, who lives in a western neighbourhood.

“Except for a few items that might be in shorter supply, the shops mostly have everything you want for now, but who knows what could happen later. Either way, the prices are breaking people’s backs,” she said.

Two days before the start of the war, the Statistical Centre of Iran (SCI) and the Central Bank of Iran released separate reports that painted a grim picture of how the daily livelihoods of 90 million people had been affected by runaway prices.

The SCI put annual inflation in the Iranian month of Bahman, which ended on February 19, at 68.1 percent, while the Central Bank put it at 62.2 percent. These were some of the highest inflation rates recorded since the pre-Islamic revolution of 1979 that birthed the incumbent theocratic establishment, stoking further concern of potentially looming hyperinflation.

Iran has one of the highest food inflation rates in the world, which stood at a whopping 105 percent by the end of last month, according to the SCI.

That included a 207 percent inflation rate for cooking oil, 117 percent for red meat, 108 percent for eggs and dairy products, 113 percent for fruits and 142 percent for bread and corn.

First Vice President Mohammad Reza Aref told state media on Wednesday that the government had concerns about providing sufficient medicine and medical equipment, “but fortunately today conditions are good”.

This comes as Iran’s medicine market has been in heavy turmoil over recent weeks, with prices skyrocketing and some drugs like antidepressants facing shortages in Tehran and other cities. In some cases, only Iranian-made versions of medicine can be found in the market, with foreign-made counterparts becoming rare.

The government continues to offer a meagre cash subsidy to people to buy essential goods, and recently expanded items purchasable through the scheme to include baby diapers, another item that has more than doubled in price over recent months.

Government officials also continue to emphasise that provincial governors and ministers have been empowered to import essential goods in large quantities with reduced red tape to ensure continuity in case of a lingering war.

The Iranian economy, bruised and isolated after decades of corruption and mismanagement paired with US and United Nations sanctions, is again on pause as its forces launch ballistic missiles and drones across the region amid the war.

The Iranian rial stood at about 1.66 million per US dollar before the war, near an all-time low. The stock market was a sea of red as investors baulked at prospects of an increasingly uncertain future, while traditional assets like gold soared.

World Opinion + ALjazeera

L’article Iranians get by as US, Israeli bombs rain down, internet blocked est apparu en premier sur World Opinion | Alternative Média.

PM Bayrou lost the vote, but a deadlock in Parliament means France might struggle to find a replacement who can pass a budget aimed at cutting the deficit.

French Prime Minister François Bayrou has lost a confidence vote of MPs, ending his nine months in office during a period of chaos in the country’s parliament, the National Assembly.

Bayrou, 74, was the fourth prime minister in two years under President Emmanuel Macron, whose second term is office has been overshadowed by political instability.

The outgoing PM’s minority government called for €44bn (£38bn) of budget cuts to tackle France’s mounting public debt. It has now effectively collapsed.

The BBC looks at what led to his removal by MPsand what could happen next.

Ahead of the no-confidence vote, Bayrou spoke on Monday afternoon in the National Assembly, France’s lower house of Parliament, where he told lawmakers that the economy faced serious risks because of its deep indebtedness. He then fielded questions from parliamentarians, before the vote took place.

Here’s what you need to know:

What could happen next?

For several weeks, lawmakers had made it clear they would vote against Bayrou’s state-slashing budget. Opposition parties from the far left to the far right hold 330 seats in the 577-seat National Assembly – so Monday’s ouster was widely expected.

After Monday’s vote, Bayrou’s government has collapsed. However, he will stay in office until President Emmanuel Macron decides what to do next. Unfortunately for the president, France lacks a consensus figure to replace Bayrou.

Macron is faced with uniquely hard choices – appoint another prime minister in the hope that he or she can pass an unpopular budget, call new elections to try to re-establish a parliamentary majority, or stand down himself, something he has refused to do before his term ends in 2027.

With the arithmetic in Parliament unchanged, picking a new premier risks simply repeating the events from last year when Bayrou succeeded Michel Barnier.

A fiscal conservative, Macron is unlikely to appoint a premier who advocates for higher state spending. But after the government recently tried to cut deals on the right of the political spectrum, some wonder if Macron might try something new.

According to Stefano Palombarini, assistant professor of economics at the University of Paris VIII, “the two previous appointments, Barnier and Bayrou, both failed. He [Macron] lost a lot of credibility in that process, and if he tries a similarly centrist approach, he’d lose even more.”

Palombarini told Al Jazeera that “in this context, it would make the scenario of a relative opening towards the left possible. Some Macronist, Socialist and Green politicians say they’re ready for compromises to form a government that lasts until 2027.”

Does this mean there is a clear political path?

Not really.

According to an opinion poll this month for Le Figaro Magazine by the Verian Group, just 15 percent of the electorate has confidence in Macron, down 6 percentage points since July. However, the president has consistently ruled out resigning from office.

Separate surveys by Ifop, Elabe and Toluna Harris Interactive indicated that 56 to 69 percent of French people want snap parliamentary elections, indicating growing dissatisfaction with current party politics in a country run by minority cabinets since 2022.

For Palombarini, “there’s general political malaise [in France] and also dissatisfaction specifically with Macron. So overall, opinion polls are actually quite stable.” Indeed, the latest polls show no material change in voting intentions over the past year.

This means there is no certainty that a new prime minister would be safe from a similar fate as Bayrou.

What are the origins of this crisis?

At the heart of France’s political paralysis is Macron’s risky decision to call snap parliamentary elections last year. That came after he was re-elected in 2022.

Macron’s gamble in June 2024 was an effort to shore up support for the political centre. But French voters edged towards the extremes, leaving Macron with a weakened minority government and limiting his ability to pass legislation.

The vote resulted in a hung Parliament split between three groups. A left alliance won the most seats, but fell far short of a majority. The far-right National Rally won the most votes, but also doesn’t have a majority. Macron’s centrist coalition lost seats, but still forms a significant third bloc.

This parliamentary shake-up has made France hard to govern. Divisions have shown up most clearly around spending.

How does the budget fit into it?

The immediate reason for Bayrou’s fall is his budget proposal for next year. His unpopular 44-billion-euro ($51bn) deficit-reduction plan, including freezing most welfare spending and scrapping two public holidays, has been widely rejected by parliamentarians.

On August 25, Jordan Bardella, head of the National Rally, said his party would “never vote in favour of a government whose decisions are making the French suffer”. Bayrou in effect has announced “the end of his government”, Bardella said.

The French budget deficit is now nearly 169 billion euros ($198bn), or 5.8 percent of its gross domestic product (GDP), well above the 3 percent limit set by the European Union for countries using the euro.

Bayrou is trying to lower the government’s borrowing to 4.6 percent of gross domestic product (GDP) in 2026 and to 2.8 percent by 2029. In turn, that would lower the overall debt-to-GDP ratio to 117.2 percent in 2029, compared with 125.3 percent if no changes are made.

Bayrou recently said young people will be saddled with years of debt payments “for the sake of the comfort of boomers” if France fails to tackle its fiscal pressures. Born in 1951, Bayrou himself qualifies as a baby boomer, the generation born in the years soon after World War II.

But any attempt to curtail social benefits is politically difficult in France, as made clear by conflicts in 2023 over Macron’s decision to raise the retirement age to 64 from 62.

Still, investors worry that France’s persistent deficits will cause ever higher debt ratios and undermine its credit score.

Is more gridlock expected?

A series of street demonstrations known as “Block Everything” is expected this week, followed by union-led hospital and rail strikes in the second half of September.

In 2018 and 2023, France witnessed what became known as the “gilets jaunes”, or yellow vest. anti-government protests against various domestic policies overseen by Macron, who will want to avoid a repeat this time, analysts said.

“Macron’s policies since 2017 have been very unpopular. If there were legislative elections tomorrow, a Macronist government would not get elected,” Palombarini said.

But with the president rejecting the idea that he might resign early, “he is likely to continue to enjoy power of the office for a few more years”, Palombarini added.

Beyond that there are also voices – from the far left this time – calling for Macron’s resignation. That is most unlikely to happen.

Who could replace Bayrou?

Pressure will be on Macron to name a successor from the left. The last two prime ministers were from the right and centre, and a left alliance came out numerically top in the 2024 election.

Olivier Faure, the leader of the Socialist Party, would be one possibility. The 57-year-old has a group of 66 deputies in the National Assembly.

Two other possibilities from the left are former PM Bernard Cazeneuve, and the veteran ex-minister Pierre Moscovici, currently head of the Cour des Comptes, the official accounting office.

If Macron decides to stick with the centre and right, his first choice would probably be Sebastien Lecornu, 39, the current defence minister who is a member of Macron’s Renaissance party and said to be close to the president.

Another conservative whose name has been mentioned is the current minister of labour and health, Catherine Vautrin.

Two other possibilities from inside government are Interior Minister Bruno Retailleau, who now leads the Republicans, and Justice Minister Gérald Darmanin.

But with all eyes on the 2027 presidential election, would these heavyweights want the electoral kiss-of-death which is to be Macron’s next PM?

World Opinions – BBC News – Aljazeera

L’article Why has the French PM had to go and what happens next? est apparu en premier sur World Opinion | Alternative Média.

Public anger is growing against looters and exploitative merchants. Their actions are seen as betrayal.

On July 17, I was in a market in Nuseirat camp in central Gaza looking for any affordable food item to buy when I saw a crowd of people gather in front of some shops. The people were angry about the exorbitant prices that the shop owners were charging for goods that had clearly been looted from aid convoys.

Two weeks later, I was at the same market and witnessed another angry protest. People were chanting, “You thieves!” and cursing the merchants.

Having no fear of God, shop owners are exploiting the famine without mercy, selling aid as if it were rare luxury items when in fact it is supposed to be distributed for free. The greed and exploitation have gone too far, and the people are taking things into their own hands. Across Gaza, there are protests against price speculation. In some places, shops are being forcibly closed.

Indeed, the prices of essential goods have soared to unimaginable levels, beyond anything dictated by the forces of supply and demand. People cannot understand why goods cost so much despite their minimal purchasing power. The prices I saw while walking at the market were insane: a kilo (2.2lb) of flour – 40 shekels ($12), a kilo of rice – 60 shekels ($18), a kilo of lentils – 40 shekels ($12), a kilo of sugar – 250 shekels ($73), a litre (1 quart) of cooking oil – 200 shekels ($58).

Since Israel imposed a full blockade on Gaza in March, the normal aid distribution through the United Nations – something that has to happen unabated in any warzone – has ceased.

To stave off global criticism, Israel set up humanitarian hubs to supposedly distribute aid. But they have been nothing more than death traps. Many of those who come to collect aid are shot at, and thousands have been killed or wounded.

In parallel, the Israeli government started allowing in a very small quantity of aid trucks, but a large portion of those are looted once they enter Gaza. The goods are then resold at outrageous prices.

Those who control this supply of looted food are powerful merchants and brokers, often protected by local influential actors or benefitting from indirect coordination with Israel. These actions are not spontaneous. They take place within a deliberately created atmosphere of chaos. With the collapse of state institutions and absence of legal accountability, exploitation has become the rule, not the exception.

It is clear to the Palestinians that the occupation doesn’t merely aim to show that Gaza is weak. It actively seeks to prove that it is ungovernable. To achieve this, closing the borders isn’t enough. The people of Gaza must be pushed into a state of constant chaos and friction.

Starvation is a key instrument here. Hunger doesn’t only kill. It also changes human nature. A starving person, stripped of the bare minimum needed to survive and subjected to daily humiliation, slowly loses the ability to think clearly, to judge or to restrain themselves from turning against those they perceive – rightly or wrongly – as contributing to their suffering.

There are black markets and war profiteers in every conflict. But in this one, the occupying power is encouraging these criminal activities, not because it is earning money from them, but because it serves its overall goal. The Palestinians who choose to participate in this form of extortion are motivated by greed, blackmail or survival.

This slow unravelling is exactly what the occupation has aimed for. It wants chaos in the streets of Gaza so Israeli and international media can be quick to point a finger at the Palestinians and declare: “Look, the Palestinian people are imploding. They can’t govern themselves. They don’t deserve a state.” But the truth is, this is not a sign of a failed nation. It is evidence of the occupation’s success in dragging it to the brink.

It is not the people who have lost control. Control has been forcibly stripped from them – through starvation, the systematic destruction of healthcare and sanitary infrastructure, the dismantling of state institutions and the empowerment of criminals.

Yet Gaza will not break. People may grow angry and desperate, cry out and protest, but they still retain a moral compass. This collective outcry is not infighting. It is a clear warning that society will no longer tolerate betrayal. Those who raise prices mercilessly in times of siege are traitors, and they will be held accountable before institutions of justice when Gaza rebuilds.

The occupation may be revelling now in the unfolding collapse, but it would be wrong to think it has defeated the Palestinians. Every crisis breeds new awareness. Every betrayal gives birth to new resistance. The vast majority of Palestinians refuse to become tools in the hands of their torturers. They refuse subjugation and erasure. They refuse to exploit and harm their fellow citizens.

Palestinian national solidarity is still alive.

By Amal Abu Seif Palestinian writer and researcher from Gaza – Aljazeera ENG

L’article Palestinians won’t tolerate war profiteering in Gaza est apparu en premier sur World Opinion | Alternative Média.

When Janet Yellen left Beijing on Sunday after four days of talks, the US treasury secretary in effect admitted that the delegation achieved its main objective simply by sitting down with top Chinese officials.

After years of dangerous and deepening separation between the people running the world’s two biggest economies, they were finally back in a room together.

At a brief press conference that was the only tangible outcome of the talks, Yellen listed her hopes for the future. They included something that a decade ago would have been taken for granted: regular “senior-level diplomacy” between Washington and Beijing to manage their relationship.

Now the US can be more confident of that, and the relief is tangible. The meetings between Yellen and Chinese financial officials were particularly urgent, given there is a changing of the guard under way in Beijing.

Personal relationships between the US political elite and outgoing Chinese decision makers that dated back to before the pandemic are being rendered obsolete.

Yellen’s visit is part of a broader push to put ties back on what she called a “surer footing”. She was following in the footsteps of the secretary of state, Antony Blinken, who last month led the first senior US delegation to China in more than three years.

After years of deepening economic and military mistrust between the superpowers, they were finally back in a room together

Better communication is vital because it reduces the risk of misunderstandings or disputes between two nuclear-armed superpowers spiralling towards unintended hostilities – whether economic or military.

But if the effort to rebuild these relationships is bearing fruit, it also throws a far greater challenge into relief. Now the two sides are talking, will their diplomacy aim only to stave off crisis, or can they use it to make constructive progress in a difficult relationship?

Yellen highlighted areas where collaboration is desperately needed, and should not threaten the core strategic interests of either side, from financing investments to tackle the global climate crisis, to dealing with the heavy debts of some of the world’s poorest countries.

But the milestones of this trip may be challenging to build on. The Covid-19 pandemic cut off in-person meetings, and accelerated a shift in the relationship between China and the west, perhaps best captured in a term coined by the EU. In 2019 it officially designed Beijing a “systemic rival”, even though China remains one of its top trade partners.

The consensus of the previous decades, that economic engagement with China would bind the country into the post-second world war world order and that economic liberalisation could catalyse political liberalisation, has been firmly put aside.

Replacing it is an uneasy mix of mutual dependency and mistrust. China has accused the west of trying to choke off its economic growth to prevent its rise as a global power. In March, Xi Jinping accused the west, led by the US, of “all-round containment, encirclement and suppression”.

Many policymakers in the west fear China will use western-developed technology to build a military more powerful than the US’s. That prompted the US to bar the sale of the most advanced microchips to China last year.

Looming over disputes about trade, AI, Beijing’s close ties with Russia as it wages war in Ukraine, China’s human rights record and other controversial issues, is the remote but real risk the countries could end up in a war precipitated by a Chinese military campaign to capture Taiwan.

Xi has told China’s armed forces to be ready to do this by 2027, US intelligence believes. Military ships and planes were sent into waters and airspace near Taiwan during Yellen’s visit, keeping up pressure on something Beijing sees as a core issue.

There is a greater and more immediately urgent risk, that sanctions and other tensions could escalate towards an economic war. Beijing has accused the US of seeking to “de-couple”, or try to separate their countries’ closely entwined economies.

That would be catastrophic for both, something Yellen acknowledged on Sunday morning, saying US moves to protect national security would be narrow and carefully targeted. She described decoupling – attempting to separate the two countries’ economies – as “virtually impossible”.

If it were attempted, it would be “disastrous for both countries and destabilising for the world”; US policymakers now prefer to talk about “de-risking” their relationship.

This fear of mutually assured economic destruction is one reason to hope that both countries will try to build on this diplomatic thaw, even as they manage mistrust and security tensions that are here for the long term.

But it was perhaps a sign of how bad things have got between the US and China that one of the most senior visits to Beijing in years had the most modest of aims: better communication. The question now is where the relationship goes next.

By Emma Graham-Harrison in Taipei – The Guardian

L’article Analysis. The US and China are talking again, but what happens next? est apparu en premier sur World Opinion | Alternative Média.

La banque a été rachetée par le géant américain JP Morgan Chase. La fédération bancaire se satisfaite de cette reprise. Certains observateurs restent inquiets.

Un peu d’air frais, oui, mais pour combien de temps de répit ? Lundi 1er mai, la banque américaine First Republic a été reprise par JP Morgan Chase. Il n’en reste pas moins que cette nouvelle faillite intervient dans un contexte où plusieurs établissements bancaires ont été en proie à de grandes difficultés ces derniers mois. Bien accueillie, cette reprise n’élimine toutefois pas complètement les risques liés à une récession ou à la montée des taux d’intérêt.

« Toute faillite d’une banque est regrettable »; mais l’accord noué lundi « renforcera la confiance dans le système bancaire du pays », a affirmé le responsable de la fédération bancaire américaine ABA, Rob Nichols. Selon lui, il montre que le secteur a des ressources et que des procédures sont en place pour protéger les clients. Le patron de JPMorgan, Jamie Dimon, l’a aussi répété plusieurs fois lors d’une conférence avec des journalistes : le rachat de First Republic « va aider à stabiliser le système ». « Il est évident que si, à l’avenir, il y a des récessions, des hausses de taux et d’autres choses de ce genre, d’autres fissures pourront apparaître dans le système », a-t-il toutefois ajouté en pointant notamment du doigt les activités liées à l’immobilier commercial.

Le monde de la finance a été fortement ébranlé en mars par les faillites rapprochées de deux banques américaines, Silicon Valley Bank et Signature Bank, suivies par la chute de Credit Suisse en Europe. La déroute des établissements américains est liée à une mauvaise gestion des risques de la part de leur direction et à des erreurs dans leur supervision, ont conclu deux rapports publiés vendredi par des régulateurs bancaires.

Les hausses des taux d’intérêt en cause ?

Autre facteur pour expliquer leur chute, la rapide hausse des taux d’intérêt engagée en 2022 par la banque centrale américaine (Fed), qui a mécaniquement abaissé la valeur de leurs actifs à taux fixe. De nombreux clients de banques régionales ont pris peur, craignant que leur établissement ne flanche pour des raisons similaires, et retiré leur argent pour le placer dans des institutions plus grosses, considérées comme trop importantes pour ne pas être sauvées en cas de troubles.

Les résultats financiers publiés depuis mi-avril par plusieurs banques régionales ont montré que la fuite des dépôts s’était stabilisée après un mouvement de panique mi-mars. « Cela ne veut pas dire que tous les problèmes sont résolus », avance Mike Mayo de Wells Fargo en énumérant les risques liés à une récession, à l’immobilier commercial ou à la nécessité pour les banques d’emprunter à des taux élevés pour se financer. Mais il ne devrait pas y avoir « de sitôt » de nouvelles faillites parmi les banques incluses dans l’indice boursier de référence S&P 500, estime-t-il.

La probabilité de voir un établissement faire face à une panique bancaire semble s’être éloignée, les plus à risques étant déjà tombés, renchérit Philipp Schnabl, professeur de finances à New York University. Par contre, le fait que la hausse des taux d’intérêt abaisse la valorisation des actifs des banques, et par ricochet affecte leurs capacités à prêter aux entreprises, « reste une source d’inquiétudes », précise-t-il.

La menace de la récession

Dans la même veine, Clifford Rossi, professeur à l’université du Maryland, estime que le plus gros risque pour le secteur bancaire est la possibilité qu’une récession conduise à des défauts de remboursement de la part des clients des banques et incite ces dernières à prêter moins. Ce resserrement du crédit est plus problématique pour l’économie en général, pas forcément pour des banques en particulier, souligne-t-il. Il ne faut pas oublier que si la banque centrale américaine lutte contre l’inflation en relevant les taux, c’est bien pour « réduire les prêts accordés à l’économie », souligne Philipp Schnabl.

Lundi à Wall Street, si la plupart des grandes banques ont fini en hausse, des banques régionales ont perdu du terrain à l’instar de PacWest (- 10,6 %), Zions (- 3,7 %) ou Western Alliance (- 1,8 %). La crise bancaire a par ailleurs ravivé les appels à un durcissement des règles.

« J’ai demandé aux régulateurs de renforcer la réglementation et la surveillance des grandes banques et des banques régionales », a rappelé lundi Joe Biden. « Nous devons faire en sorte de ne pas nous retrouver à nouveau dans cette situation. » Le responsable de la Fed, chargée de la supervision des banques, Michael Barr, a toutefois souligné vendredi dans un rapport que si des ajustements en termes de liquidités et de niveaux de capitaux étaient souhaitables, ils prendraient probablement « des années » avant d’être mis en place.

World Opinions – AFP

L’article États-Unis. First Republic : une nouvelle banque sauvée in extremis est apparu en premier sur World Opinion | Alternative Média.

Banks are a special type of organisation. They take deposits and lend these funds to borrowers over long periods. It is pretty remarkable when you think about it. Banks make loans over many years, but you and I can withdraw the savings that banks use to fund the loans instantly.

For banks to operate this franchise model profitably, they essentially rely on two ingredients. First, they need to earn a profit by charging higher interest on long-term loans than they pay on short-term deposits. This model has come under severe strain in recent years. Owing to high inflation now and lower expected inflation in the next few years, many banks currently pay more for deposits and other funds than they earn on long-term loans and other assets. This makes the traditional banking model loss-making and raises questions about what the assets of some banks are worth if they had to be sold now.

Second, trust in the viability of a bank is vital. Banks are inherently unstable due to the mismatch in the duration of loans and deposits. They cannot liquidate their long-term assets quickly enough when many depositors withdraw at once. Even safe banks, with ample liquidity and capital, risk collapse when trust evaporates and depositors withdraw en masse.

It is important to remember that Credit Suisse is subject to more stringent regulations and oversight than other banks. Silicon Valley Bank was compliant with liquidity and capital regulations. In fact, SVB was well capitalised compared with many of its peers. However, when trust in the solvency of a bank goes, its franchise may crumble quickly, and depositors at other banks start worrying about the safety of their deposits.

This is by no means a repeat of the 2008 crisis. Regulations ensured banks, particularly the largest ones, have more capital and therefore greater ability to absorb losses than they did in 2008. Banks have also been stress-tested to withstand quite significant losses in the value of their loan portfolio.

In the US, Biden has assured voters that no taxpayer money would go to at-risk banks, but trust in the system relies on such support

Fortunately, regulators can address trust issues by providing large, potentially limitless, liquidity to solvent banks that have suffered from an erosion of trust. Over the weekend, the Federal Reserve and other US regulators did just that when they acted decisively in providing a large amount of liquidity to US banks.

However, I was less encouraged by the authorities’ insistence that this was not a bailout and that no taxpayers’ money was used. In situations where trust in banking comes under strain, bailouts are needed to prevent much worse and, if designed well, taxpayer money need not be at stake.

Recent events starkly contrast statements made by Mario Draghi about 10 years ago when he was head of the European Central Bank. During the euro crisis, which many feared might cause a breakup of the euro with catastrophic effects on the global financial system, Draghi declared that the central bank “is ready to do whatever it takes” and added “believe me, it will be enough”. His comments are widely credited with having ended the immediate financial crisis.

As this current crisis rattles on, a statement by global regulators that they are ready to do likewise to stem instability would be very welcome. While this will not be the last banking crisis and lessons must be learned, history also tells us that “whatever it takes” will restore trust and stability.

By Jens Hagendorff is professor of finance at King’s College London – Theguardian.com

L’article Analysis. Unlike 2008, Credit Suisse and SBV haven’t been saved by governments. But let’s not make ‘bailout’ a dirty word est apparu en premier sur World Opinion | Alternative Média.

The lexicon is lost for synonyms for mayhem, havoc, chaos and pandemonium. The front pages of all the newspapers and their websites that led the way to this abyss have used them all up. Those who backed Liz Truss, those who engineered Brexit, those forever calling for cuts to the public realm – the Mail even whooping with glee at her catastrophic, market-killing budget – “At last a true Tory budget!” – shouted as loud for her demise, without a heartbeat’s pause for shame or remorse.

Truss is gone. The ideological hobgoblins she brought in and others of her fraternity turned on her. It’s not been “take back control” but out of control. Even two more years of this Tory disaster is unthinkable. Whether it’s tax cuts splurging on the rich, or the return by the chancellor, Jeremy Hunt, to thumb-screw austerity, the country can’t take either option. Nor will markets be much soothed as long as the party that enabled all this and drove us over the Brexit cliff remains in charge of our weakening economy.

The question is whether Labour, Lib Dems (and moderate Tories) can drive a stake through the heart of her extreme brand of libertarian, state-destroying, Europe-baiting, austerity politics. Strike it dead so it never resurrects, so no one ever tries it again any more than they would advocate Stalinism. Look at where it has taken us: Cameron and Osborne’s cuts at a time of recession, when every precedent said it was time to invest, led to negative growth in household income, and the UK performing worse than any other country in Europe bar Greece and Cyprus. Post-financial crash, incomes in France grew by 34% and in Germany by 27%, while ours fell by 2%, according to the Resolution Foundation.

Look what the Tories’ Brexit did. The British economy fell faster behind those in the EU: it was 90% of the size of Germany’s in 2016, and now it has fallen to 70%. Our trade to the EU has fallen by 16%.

But Britain’s loss has been far greater than those whom Truss liked to call “bean counters”, with their “abacus economics”, can measure. Reputation is priceless, though it too is weighed on the scales of the mercurial markets’ confidence in our debts. No reputation manager can fix the shame of being laughed at abroad. Sober countries look on amazed at how the Conservative party – yes, the party of bowler hats, the Carlton club, black and white balls, garden fete fundraisers – has melded into the realm of disreputables such as Trump, Bolsonaro, Berlusconi and Giorgia Meloni.

Never forgive, never forget, Keir Starmer says. It’s the duty of social democrats to bury that ideology and remind Britain who they really are. They are the postwar consensus that Thatcher tried to uproot. All but relatively few are essentially the Labourites of Wilson and Attlee, and Tories of council house-builder Harold Macmillan, and Edward Heath, who guided us skilfully into the EU. They are not Truss-type revolutionaries. The permanent bright red line between the parties always showed up the Tories as protectors of the better-off, anti-NHS, anti-progressive social reforms, cutting taxes for a smaller state – but not off-the-scale wreckers like this breed, nurtured on Thatcherism and Euro-hostility.

Remember that Truss and Kwarteng only continued the madness of Osborne and Cameron. And hard years of repair lie ahead

The evil potion of the great Brexit lie, imbued with wartime myths of British exceptionalism, that wildly misled so many is now wearing off. Labour should seize the moment without fear to keep reminding voters what harm the Tories’ particularly pernicious brand of Brexit has done to them. This time the politics of the Tory party, in all its egregious forms, is not distant Westminster night-time scuffles in mysterious voting lobbies but an ideology that is doing appalling damage to every household, in ways everyone understands all too well.

Even if benefits are uprated with inflation, poorer households will suffer the biggest fall in real disposable incomes on record, wiping out all the gains of the last 20 years, according to the Resolution Foundation. Poorer households are about to face “a catastrophically bad year”. This Tory generation, from 1980 onwards, will turn Britain into the most unequal country in Europe, bar Bulgaria.

Now Tory MPs face even more painful votes than fracking. Fearing for their seats, they didn’t want their names on local leaflets as frackers, and nor will they want their names listed as voting for 10% to 15% cuts to everything: the NHS already gets less per capita than in 2010, schools already spend less per pupil, roads have deeper potholes, social care has all but collapsed – so will they vote for worse? Nor will that bonfire of EU regulations look appetising on hostile election leaflets if they vote for cuts to food safety, environment, working rights, clean water and air. Each swing of the axe of austerity will mean more revolting Tory MPs adding to the Westminster bedlam.

In other words, it can’t happen. This has to stop. Two years more will break everything. The Tory MP Charles Walker appears to have their measure. On Wednesday he called the government “an absolute disgrace” and railed against “talentless people” in the cabinet. Some may see him as a viable interim leader. But what we need is an election.

Labour needs to press home a deep political and social culture change. Make sure rogue conservatism is forever seen as an alien creature, nation-damagingly un-British. The Tory media – the Sun, Mail, Telegraph, GB News and Murdoch’s TalkTV – will find they must adapt: it’s too much to expect remorse, but they should consult their marketing departments about how far beyond the pale of most readers’ current state of mind they should go. The wise will row back from the mania of a failed experiment they urged on. Hard years of repair lie ahead, but these are different times, Keir Starmer times, now.

By Polly Toynbee is a Guardian columnist – The Guardian

L’article Truss is gone. The Tory experiment is dying. Kill it off. Then don’t forgive and don’t forget est apparu en premier sur World Opinion | Alternative Média.

Europe is sweltering during a prolonged summer heatwave. But the attention of political leaders is increasingly focused on the coming winter. As a succession of recent warnings from the International Energy Agency (IEA) and elsewhere has underlined, an energy crisis to rival the oil price shock in the 1970s could hit when the weather turns cold.

As Vladimir Putin seeks to make the west pay for its support for Ukraine since February’s brutal invasion, Moscow has intensified its squeeze on gas exports to Europe. On Monday, Russia shut down its main pipeline to Germany – having previously reduced the flow of gas through it by 60%. Ostensibly, Nord Stream 1 has been closed to allow scheduled maintenance work, but its reopening later this month is far from certain. Gas supplies to Italy have been reduced by a further third; in all, a total of 12 EU countries have been either fully or partially cut off from Russian gas supplies. Supplies are accordingly dwindling before the period when they will be most needed. And, amid shortages and outages, European gas prices are almost 10 times higher than in the US.

Matters could get worse. The IEA has cautioned that rationing of fuel to industry, and even households, may become necessary if Mr Putin moves to a complete cutoff of gas supplies over the winter. As Russian troops expand their occupation of eastern Ukraine, the Kremlin is aiming to exert economic leverage over Europe’s response through a form of energy blackmail. Last week, Mr Putin threatened to unleash “catastrophic consequences” on markets if the west instituted further sanctions, such as a mooted cap on oil prices.

A freezing winter, soaring inflation and the wider cost of living crisis could tip millions of families over the edge, undermining support for sanctions on Russia and western solidarity with Ukraine. Without significant intervention to protect vulnerable people and ease hardship, there is a risk that, as the European Commission vice-president, Frans Timmermans, told the Guardian last week, countries will descend into “very, very strong conflict and strife”.

A concerted response is therefore urgently required. Having belatedly recognised the dangers of oil and gas dependency on Moscow, governments above all need to accelerate the pace of transition to renewables and promote energy efficiency. But that will be a process which takes years, not months. Alternatives to Russian energy are, meanwhile, proving difficult to access in sufficient quantity. The immediate problem of getting through the winter will require decisive action in the short term, including energy conservation to build up gas stockpiles for the winter. The gravity of the moment is illustrated by the decision of Germany’s green minister for climate action, Robert Habeck, to reactivate mothballed coal-fired power plants. At an emergency meeting later this month, EU leaders will collectively discuss winter contingency plans. A pan-European energy “solidarity plan” will need to ensure a fair distribution of gas supplies in the event of severe shortages, and establish common rules for identifying priorities.

Before the invasion, European governments were hoping to return to a form of political and economic normality after Covid. Instead they find themselves confronted with another existential threat requiring emergency measures. To face down Mr Putin’s threats this winter, and maintain a united front in support of Ukraine, a pandemic-style sense of collective solidarity will need to be fostered. It will not come cheap.

World Opinions – The Guardian View

L’article View on Europe’s energy crisis: facing down Putin will not come cheap est apparu en premier sur World Opinion | Alternative Média.

Prices in the US rose faster than expected last month, as rising energy and food costs pushed inflation to the highest rate since 1981.

The annual inflation rate rose to 8.6% in May, the Labor Department said, after easing in April.

The rising cost of living has been squeezing households and putting pressure on policymakers to bring the issue under control.

The US central bank has been raising interest rates since March.

Analysts had hoped that the moves were starting to work to cool economic activity, easing the price pressures. But the conflict between Russia and Ukraine, which has driven up the price of oil and commodities like wheat as it disrupts exports from the two countries, has made tackling the problem more difficult.

Food prices were up more than 10% last month compared to May 2021, while energy surged more than 34%.

But Friday’s report showed the increases continue to spread throughout the economy, pushing the cost of everything from airline tickets and clothing to medical services higher.

« So much for the idea that inflation has peaked. Consumer prices blew past expectations – and not in a good way with the 8.6% annual increase the fastest in more than 40 years, » said Greg McBride, chief financial analyst at Bankrate.com.

« Worse the increases were nearly ubiquitous. Just no place to hide. »

The US has been grappling with rising prices since last year, when an unexpectedly strong economic rebound from the shock of the pandemic – driven by large doses of US government spending, including direct cheques to households – overwhelmed supplies, prompting companies to raise prices.

Now the war in Ukraine has spread the problem around the world, with Covid related shutdowns in China this spring contributing.

As the rising costs hit household purchasing power and prompt a pullback in spending, officials are warning that growth in many countries is at risk of a sharp downturn.

« The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid, » World Bank President David Malpass said this week.

US stock markets fell in the wake of the inflation reports, with all three major indexes dropping more than 2%. The falls added to weeks of declines in US shares, as investors become nervous about the path for the economy.

« Even if inflation peaks soon, it’s unlikely to decelerate quickly. » said Richard Flynn. managing director of Charles Schwab UK. « High prices may put pressure on consumer spending into the medium term.

« Add ongoing supply-chain problems and the economic impact of Russia’s invasion of Ukraine to the threat of inflation, and it’s easy to see why fears of a downturn have risen swiftly. »

Polls show a majority of Americans see inflation as the top problem facing the country. Consumer sentiment has plunged and US President Joe Biden’s approval ratings have sunk as Republicans criticise him over the issue.

In hearings in Washington this week, US Treasury Secretary Janet Yellen said bringing down prices was the « number one priority ».

Over the month, prices gained 1%, driven by rising cost of petrol, which has hit new records in the US, approaching an average of nearly $5 a gallon.

Wages have not kept up with the rising prices. The rising cost of living has especially hit lower income households, for whom basics like food and energy make up large portions of spending.

By Natalie Sherman Business reporter, New York – BBC News

L’article Energy and food drive US inflation to highest for 40 years est apparu en premier sur World Opinion | Alternative Média.

African countries are innocent victims of the war in Ukraine and Russia should help ease their suffering, the head of the African Union has told Vladimir Putin at a meeting in Sochi.

After three hours of talks, Macky Sall said the Russian leader had promised to ease the export of cereals and fertiliser.

However, he did not give any details.

Prior to the conflict, more than 40% of wheat consumed in Africa came from Russia and Ukraine.

The war has exacerbated shortages caused by bad harvests and insecurity.

Food prices have shot up across the continent since Russian invaded Ukraine 100 days ago, pushing huge numbers towards hunger.

Chad has declared a national food emergency. A third of the population needs food aid, according to the UN and the government has appealed for international assistance

Mr Sall, who is Senegal’s president, told Mr Putin he should be « aware that our countries, even if they are far from the theatre [of action], are victims of this economic crisis » caused by the conflict.

He said he was also pleading on behalf of other countries like « Asia, the Middle East and also Latin America ».

Mr Putin said exports could either go through the Black Sea port of Odessa « which is difficult because Ukrainians have to clear mines » or via the Russia-controlled port of Mariupol on the Sea of Azov, the AFP news agency quotes Mr Sall as saying.

Ukraine’s ports in the Black Sea have been largely blocked for exports since the conflict began.

Russia’s defence ministry says that vessels carrying grain can leave Ukraine’s ports in the Black Sea via « humanitarian corridors », with Russia ready to guarantee their safety, Reuters quotes the Interfax news agency as saying. However, it is not clear how these corridors would work.

Before the meeting, Mr Putin said he was always on the side of Africa, but didn’t explicitly mention the continent’s food crisis.

Like many African countries, Senegal has avoided taking sides in the conflict and the Senegalese leader also said food supplies should be « outside » the West’s sanctions on Russia. He said he had made this point when he spoke to the European Council earlier in the week.

On Friday, US President Joe Biden dismissed the idea that the West bore responsibility for the global price rises.

« This is a Putin price hike. Putin’s war has raised the price of food because Ukraine and Russia are two of the world’s major bread baskets for wheat and corn, the basic product for so many foods around the world, » he said.

World Opinions + BBC News

L’article Africa is victim of Ukraine war, Macky Sall tells Vladimir Putin est apparu en premier sur World Opinion | Alternative Média.