Issue XCVI

21 OCT 2016



Spain's Catalonia calls off independence vote


BARCELONA, Spain (AP) — The leader of Spain's wealthy Catalonia region on Tuesday called off an independence vote but said an unofficial poll will take place next month to gauge secessionist sentiment.

Artur Mas was forced to cancel the Nov. 9 referendum and replace it with a symbolic one on the same day after Spain's government challenged the referendum in the country's Constitutional Court, which suspended the vote while it deliberates.

Separatists in northeastern Catalonia, which has 7.5 million people, have been trying for several years to hold a breakaway vote from Spain to carve out a new Mediterranean nation.

Catalonia's regional president Artur Mas bites his lips during a press conference at the Generalitat Palace in Barcelona, Spain, Tuesday, Oct. 14, 2014. Mas called a press conference amid speculation he will discuss the future of an independence referendum the central government in Madrid says would be illegal. Plans for the Spain's powerful northeastern region of Catalonia to hold a secession referendum Nov. 9 look decidedly uncertain as a pro-vote party says Mas told them the poll cannot go ahead. (AP Photo/Manu Fernandez)

Secessionist sentiment surged during Spain's economic stagnation and amid discontent at Spain's refusal to give the region more autonomy and fiscal powers.

Polls show most Catalans support holding an independence referendum and around half favor ending centuries-old ties with Spain.

Mas insisted his regional government is not backtracking and still plans an official vote later, saying the symbolic vote will serve as a "preliminary" ballot.

"It means there will be polling stations open, with ballot boxes and ballots," Mas said. "It will depend on the people for a strong enough participation to show that people here want to vote."

The vote questions will be the same, asking residents if they think Catalonia should be a state, and, if so, whether it should be independent.

Madrid's central government has said an independence vote would violate clauses in Spain's constitution specifying that only the national government can call referendums on sovereignty and that all Spaniards must be allowed to vote.

Unlike last month's independence referendum in Scotland, which ended with voters deciding to remain part of the United Kingdom, the vote that Catalonia separatists wanted to hold would have been nonbinding.

Spain's government did not immediately...

'Reluctance to allow Catalan referendum illustrates Spain’s former empire mentality’


A so-called empire hangover or an empire mentality stops the Spanish government from admitting the Catalan right to hold an independence referendum, which will actually give more respect to Madrid if allowed, Scottish Nationalist MP Angus MacNeil told RT.

It seems that Catalan aspirations for independence are on the wane, given multiple challenges that the independence-seekers have been facing for some time.

It started with the September 29 decision by Spain’s Constitutional Court that suspended Catalonia’s referendum on independence planned by the region’s President. Then, on October 12, thousands of pro-Spanish unity supporters marched in Barcelona on Spain’s national day. Around 40,000 people participated in demonstration against the region’s decision to hold the referendum, with some radical protesters burning the “Estelada”, the Catalan unofficial flag.

The following day, October 13, Catalan President Artur Mas announced the cancellation of the planned November 9 referendum at a meeting of the parties advocating Catalonian independence and the regional government. The cancellation of the vote is supposed to be because of the lack of legal guarantees. Instead, the government will hold a public participation process ‒ a series of town hall meetings and debates ‒ on the political future of the Catalan province.

Galdric Penarroja from the National Secretariat of Catalan National Assembly, however, claims that it is not a cancellation of the referendum but rather a delay until the ways to express the people’s political will are found.

“So it’s not cancelled but they are trying to find another way to be able to vote,”Penarroja told RT.

He believes an independent Catalonia will emerge one day as there is “clearly big support for this referendum to be held, people want to vote.” Besides, Spain is a democratic country, and therefore, it should allow the Catalans to vote.

“So if the Catalans vote that they want independence, there should be negotiations and we should get independence. Otherwise it’s not called the democracy,” Galdric Penarroja said.

[Spanish unionists wave flags during a rally at Catalonia square on Spain's National Day in Barcelona October 12, 2014.(Reuters / Albert Gea)]

Spanish unionists wave flags during a rally at Catalonia square on Spain's National Day in Barcelona October 12, 2014.(Reuters /...


Malala, Kailash share glory


Reaching across gulfs of age, gender, faith, nationality and even international celebrity, the Norwegian Nobel Committee awarded the 2014 peace prize yesterday to Malala Yousafzai of Pakistan and Kailash Satyarthi of India.

The award joined a teenage Pakistani known around the world with an Indian veteran of campaigns to end child labour and free children from trafficking.

Malala, 17, is the youngest recipient of the prize since it was created in 1901. Kailash is 60. The $1.1 million prize is to be divided equally between them.

The award was announced in Oslo by Thorbjorn Jagland, the Nobel committee's chairman, who said:

“The Nobel Committee regards it as an important point for a Hindu and a Muslim, an Indian and a Pakistani, to join in a common struggle for education and against extremism.”

Malala, now 17, was shot in the head by a Taliban gunman two years ago in Pakistan after coming to prominence for her campaigning for education for girls.

She won for what the Nobel committee called her “heroic struggle” for girls' right to an education. She is the youngest ever winner of the prize.

After being shot she was airlifted to Queen Elizabeth hospital in Birmingham, where she was treated for life-threatening injuries.

She has since continued to campaign for girls' education, speaking before the UN, meeting Barack Obama, being named one of Time magazine's 100 most influential people and last year publishing the memoir I am Malala.

Last year, Malala won several European awards and published a memoir of her experiences, “I Am Malala.” The title echoed the circumstances of her shooting. When the Taliban gunman boarded her bus, he called out, “Who is Malala?” As she noted in an interview last year, her voice is now heard “in every corner of the world.”

British news reports said Malala was at school in Birmingham, England, where she has lived since being treated for her gunshot wounds, when the prize was announced and was taken out of her class to be informed of the award.

In many ways, her story has come to symbolize the trauma of modern Pakistan, as the nuclear-armed nation has struggled to reconcile the opposing forces of violent Islamism and those who envision a progressive, forward-facing future for their country.

Last month, a gang of 10 Taliban fighters who tried to kill her were arrested, the Pakistan army claimed.

Kailash Satyarthi, 60, despite his works, is not so widely known...

In 2014, Another Empty Nobel Peace Prize


An Indian and Pakistani share a Nobel Peace Prize seemingly awarded in order to make a political statement.

This year’s Nobel Peace Prize was shared between an Indian and Pakistani, at a time when military tensionson the Indo-Pakistani border in Kashmir have reached their deadliest point in over a decade. This, of course calls into question whether the Nobel Peace Prize has again been awarded to make a political statement, especially since it was given to two individuals who, while working for noble causes, did not work together and whose work was only marginally related to the cause of world peace.

The two winners of this year’s Nobel Peace Prize were Pakistan’s Malala Yousafzai and India’s Kailash Satyarthi. Malala, as she is popularly known, needs no introduction. At 17, she is the youngest recipient of the prize. She is the well-known promoter and symbol of female education in Pakistan who was shot by the Taliban in 2012 for campaigning for the right of girls to attend school. Satyarthi, who is 60, has been a longtime crusader against child slavery. His organization, the Bachpan Bachao Andolan (Save the Child Movement) has been credited with saving thousands of children from forced labor and abuses.

Unfortunately, the Nobel Peace Prize, unlike some of the science-oriented Nobel Prizes, has totally lost sight of its original purpose and has instead become a vehicle for the Nobel committee to make political statements or promote social causes. Nobody can deny that the causes that Satyarthi and Malala stand for are good, important and mostly uncontroversial. Yet, the selection of these individuals, and of many individuals in the recent past, seems to deviate from Alfred Nobel’s wish that the Peace Prize be given to someone who pursued the promotion of peace, which is the lack of war. According to Alfred Nobel, the prize ought to be given “to the person who shall have done the most or the best work for fraternity between nations, the abolition or reduction of standing armies and for the holding and promotion of peace congresses.”

And yet, according to the Nobel committee, this year’s prize was awarded jointly to Kailash Satyarthi and Malala Yousafzai “for their struggle against the suppression of children and young people and for the right of all children to education.” This was not a joint struggle between the two individuals and was not coordinated, as they worked on different aspect of children’s rights. These two...


Russia spends $1.7bn to prop up rouble as sanctions grip


The rouble is under strain as a consequence of President Putin's shake up of the post Cold War order in eastern Europe as the US and EU impose sanctions on his economy and investors pull money out of the country.

Russia's central bank spent at least $1.68bn (€1.32bn) to prop up the rouble over the last two trading days, its biggest intervention since President Vladimir Putin's incursion into Ukraine in March.

The Bank of Russia ended a five-month pause of selling foreign currency after the rouble's world-beating slide in the past three months sent it through the upper boundary of the authority's target dollar-rouble basket.

The exchange rate weakened 0.2pc to 44.5641 versus the basket - made up of a mix of currencies, yesterday.

The rouble is under strain as a consequence of President Putin's shake up of the post-Cold War order in eastern Europe as the US and European Union impose sanctions on his economy and investors pull money out of the country.

Demand for dollars and euros is growing among Russian companies locked out of western debt markets as they contend with $54.7bn of debt repayments in the next three months, according to central bank data.

The rouble is under "permanent pressure" from lingering demand for foreign currency for debt payments, said Vladimir Evstifeev, a Moscow-based analyst at OAO Bank Zenit.

The "collapsing truce" in Ukraine is also putting pressure on the exchange rate, he said.

Fighting is continuing in eastern Ukraine amid moves to establish a buffer zone to help cement a cease-fire.

Russian central bank intervention is a dead end

The Russian central bank is doing what it can. The problem is that it cannot do much. It spent $1.4 billion on Oct. 3 and 6 to try stemming the rouble’s slide. But the currency keeps falling. Spending foreign exchange reserves can make sense – a little – when markets seem lost in a temporary moment of insanity. And the Russian central bank has $470 billion worth of it to spend. But there is nothing irrational about the rouble’s weakness. Its root causes are the deep flaws of the Russian economy, and the country’s new aggressive foreign policy.

At the moment there are many reasons to take capital out of Russia and few to bring it in. Even before the Ukrainian crisis and the annexation of Crimea in March, the country was headed for a worrying economic slowdown. Since then, economic sanctions imposed by Europe and the United States have hit hard, cutting off some of Russia’s top banks and oil companies from Western sources of funding. But their impact pales in comparison to the financial market’s sanctions: investors have started to treat Russia as radioactive.

The Russian government’s reaction to Western measures has been to retreat into a command-style economy, bearing an eerie resemblance to the old Soviet model. A few weeks ago the arrest of oligarch Vladimir Yevtushenkov scared investors, who fear a return of the days when the state seemed ready to expropriate at will.

Meanwhile, the economic environment is hostile. Oil prices are at their lowest level in more than two years. Domestic inflation – fuelled by the rouble’s 14 percent slide against its reference basket since the beginning of the year – will reach 8 percent this year. An embargo on Western food and clothing imports adds to the inflationary pressure. Consumption is holding for now – but only because the fear of what’s ahead is leading to stocking up on durable goods.

What’s the central bank to do? Moving faster to an inflation-target monetary policy, as it plans to do next year, would require higher rates, after three hikes this year already. Tightening by another notch would push the economy down from stagnation to recession. The reality is that the rouble’s slide will continue as long as the government keeps scaring investors away.


France's Socialists detail hefty spending cuts



France's Socialist government has detailed a 21 billion-euro ($26.5 billion) cost-cutting plan, the biggest in the country's modern history, saying it will focus on trimming welfare benefits.

Presenting the 2015 budget on Wednesday, Finance Minister Michel Sapin said the measures show the government is serious about reining in its budget deficit, which is above European Union limits.

"These spending cuts are crucial to our credibility in the eyes of the French and Europeans. They'll be fully applied," he said.

Sapin insisted, however, that they are not austerity measures as they will be accompanied by tax cuts as well.

French Finance Minister Michel Sapin, right, and budget junior minister Christian Eckert, left, arrive for the presentation of the 2015 budget, at the finance ministry in Paris, Wednesday Oct. 1, 2014. France’s Socialist government has detailed a euro21 billion ($26.5 billion) cost-cutting plan, the deepest-ever spending cuts in the country’s modern history. Presenting the 2015 budget, Finance Minister Michel Sapin said “These spending cuts are crucial to our credibility in the eyes of French and Europeans, they’ll be fully applied." | Remy de la Mauviniere/AP Photo

The government hopes the reforms will assuage EU authorities irked by France's decision to let its budget deficit reach 4.4 percent of gross domestic product this year —far above the 3 percent demanded by the EU.

A significant part of the savings is to be made in France's generous welfare system. The government will cut social security spending by 9.5 billion euros, including 3.2 billion euros from health spending, and 700 million euros from family benefits.

These measures prompted harsh criticism — especially among leftist voters — in a country that prizes its public services.

The government says it will reduce income taxes for 6 million families next year, for a total amount of 3.2 billion euros.

The 2015 budget also plans to diminish the number of state employees next year and limit wage increases.

At the same time, the government vows to reduce tax burden on employers in hopes of encouraging hiring.

"In the context of low growth and low inflation... the government is now forced to make spending cuts measures, instead of simply freeze the spending as it used to do," said Antoine Bozio, economist and director of the Institute of public policies.

France's debt is now...

France unveils budget, ignores agreed EU deadlines


The French government has unveiled its plans for its 2015 budget. It would see French borrowing scaled back to within EU limits two years later than originally promised.

During a press conference on Wednesday, French Finance Minister Michel Sapin laid out his government's 2015 budget, which sees public deficit falling at a slower rate than France had previously outlined.

"We have taken the decision to adapt the pace of deficit reduction to the economic situation of the country," Sapin said.

France had previously promised to rein in its spending so that its public deficit would be less than 3 percent of economic output – in line with European Union rules – by 2015. That was already a compromise on a previously agreed deadline of 2013.

Now, France's plan would first see it in compliance with EU regulations by 2017.

"Our economic policy is not changing, but the deficit will be reduced more slowly than planned due to economic circumstances - very weak growth and very weak inflation," said Sapin.

Part of France's budget plans moving forward include cutting 50 billion euros in public spending in an effort to offset 50 billion euros ($63 billion) in tax breaks for businesses, which are being implemented in an effort to create jobs.

On Tuesday, France's statistics office announced that the country's public debt had topped 2 trillion euros for the first time ever. This represents 95 percent of the country's gross domestic product. EU rules stipulate a member nation's public debt should not exceed 60 percent of GDP. France said this ratio would likely peak at 98 percent in 2016.

France's Pierre Moscovici, a former finance minister under President Francois Hollande, has been nominated to the EU post of Economic and Financial Affairs Commissioner. He is set to undergo a confirmation hearing for the EU post on Thursday, where European parliamentarians will likely explore his qualifications as head of economic and financial affairs in the commission when his own country struggles to comply with EU rules.