Month: September 2018

Swiss authorities said Friday that the Netherlands arrested and expelled two suspected Russian spies who allegedly tried to hack a Swiss laboratory that conducts tests for the U.N.-backed chemical weapons watchdog.

Switzerland’s Foreign Ministry summoned the Russian ambassador to protest the attempted attack.

The Federal Intelligence Service says it worked “actively” with British and Dutch partners on the case involving Switzerland’s Spiez Laboratory. Russia’s foreign minister said earlier this year that the lab analyzed samples linked to the poisoning of former Russian spy Sergei Skripal and his daughter in England.

The confirmation came after Dutch newspaper NRC Handelsblad and Swiss newspaper Tages-Anzeiger reported that two Russians suspected of being agents of military intelligence service GRU were kicked out of the Netherlands earlier this year as a result of a Europe-wide investigation.

“The Swiss authorities are aware of the case of Russian spies discovered in The Hague and expelled from the same place,” said FIS spokeswoman Isabelle Graber in an email. “The Swiss Federal Intelligence Service participated actively in this operation together with its Dutch and British partners.”

“The FIS has thus contributed to the prevention of illegal actions against a critical Swiss infrastructure,” she added, while declining to comment further.

The Swiss attorney general’s office confirmed it had identified “two individuals” as part of a broader investigation opened last year.

Switzerland’s Foreign Ministry said it summoned Russia’s ambassador on Friday to “protest against this attempted attack” and demanded that Russia “immediately” end its spying activities on Swiss soil.

Andreas Bucher, a spokesman for the laboratory, declined to comment on the expulsions, but added: “We have had indications that we have been in the crosshairs of hackers in the last few months.” He said the lab had taken precautions, and no data was lost.

The Russian state news agency Tass quoted Stanislav Smirnov, a spokesman for the Russian embassy in Switzerland, as calling the Dutch news report “absurd.”

“We believe that this is a new anti-Russian bogus story made up by the Western media,” he was quoted as saying, alluding to the events that took place six months ago. “We have seen this article and it gives rise to a lot of questions … It is absurd, just new groundless allegations.”

 
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Prominent anti-Kremlin activist Pyotr Verzilov is seriously ill and in hospital, members of the Pussy Riot protest band with whom he collaborated said late on Wednesday, suggesting he may have been poisoned.

Verzilov, 30, staged a brief pitch invasion during the soccer World Cup final in Moscow in July along with three women affiliated to the anti-Kremlin punk band and is the publisher of Mediazona, a Russian online news outlet which focuses on human rights violations inside Russia’s penal system.

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“Our friend, brother, comrade Petr Verzilov is in reanimation. His life is in danger. We think that he was poisoned,” Pussy Riot said on its official Twitter feed.

Sergei Smirnov, editor-in-chief of Mediazona, struck a more cautious note however, confirming on social media that Verzilov was in hospital but saying nobody knew his diagnosis, making it difficult to understand what was going on.

Online news portal Meduza cited Veronika Nikulshina, who it said was Verzilov’s girlfriend, describing how he had been rushed to hospital on Tuesday night after he started to lose his eyesight and ability to talk and walk.

Verzilov is also a citizen of Canada. Prime Minister Justin Trudeau said he was worried by what happened, adding that Canadian consular officials had reached out to the hospital.

“It is of concern, obviously, particularly given actions of recent months by the Russians in the United Kingdom … but it is too early to draw any conclusions about what has happened,” he told reporters in the western city of Saskatoon.

Earlier this month Canada said it backed Britain’s assessment that Russian officers were behind an attack in March on a former Russian spy and his daughter in the English city of Salisbury.

Verzilov and the others served a 15-day sentence for running onto the pitch in front of President Vladimir Putin and other high-ranking officials wearing police uniforms during the final of the World Cup on July 15, a stunt they said was meant to promote free speech.

Pussy Riot came to prominence in 2012 when its members were jailed for staging a protest against Putin in a Russian Orthodox cathedral in Moscow. The group has since become a symbol of anti-Kremlin protest action.
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Volkswagen said on Thursday it would stop producing its Beetle compact car globally in 2019, ending a model that looked backward to the 1960s counter-culture as the automaker prepares for a leap toward a future of mass-market electric cars.

The VW Beetle and the VW minibus became symbols of the small-is-beautiful esthetic of many in the post-war Baby Boom and the crescent shaped car was revived with the “New Beetle” of the late 1990s, which offered a built-in flower vase.

The New Beetle was a hit during its early years, with sales of more than 80,000 cars in the United States in 1999. More recently the car’s U.S. sales have suffered along with most other small cars.

Volkswagen sold 11,151 total Beetles through the first eight months of 2018, down 2.2 percent from the same period a year earlier. U.S. consumers looking for a small Volkswagen vehicle overwhelmingly prefer the Jetta sedan, or a Tiguan compact sport utility vehicle.

The company said two special models will join the final lineup — Final Edition SE and Final Edition SEL — in the United  States and would offer driver-assistance technology.
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The Turkish central bank caught international markets by surprise Thursday as it aggressively hiked interest rates in an effort to strengthen consumer confidence, stem inflation and rein in the currency crisis. 

Interest rates were increased to 24 percent from 17.75 percent, which is more than double the median of investor predictions of a 3 percent hike. The Turkish lira surged above 5 percent in response, although the gains subsequently were pared back.

International investors broadly welcomed the move. “TCMB [Turkish Republic Central Bank] did show resolve in hiking the one-week repo rate substantially and going back to orthodoxy,” chief economist Inan Demir of Nomura International said.

The central bank had drawn sharp criticism for failing to substantially raise interest rates to rein in double-digit inflation and an ailing currency. The lira had fallen by more than 40 percent this year.

The rate hike is an apparent rebuke to Turkish President Recep Tayyip Erdogan, who has been opposed to such a move.

Only hours before the central bank decision, Erdogan again voiced his opposition to increasing interest rates. The Turkish president reiterated his stance of challenging orthodox economic thinking, arguing that inflation is caused by high rates, although that runs contrary to conventional economic theory. Erdogan also issued a presidential decree banning all businesses and leasing and rental agreements from using foreign currency denominations.

The central bank indicated further rate hikes could be in the offing. “Tight stance monetary policy will be maintained decisively until inflation outlook displays a significant improvement,” the central bank statement reads.

The strong commitment to challenge inflation was welcomed by investors. “Most importantly, the CBT seemed to be vocal about price stability risks,” wrote chief economist Muhammet Mercan of Ing bank.

‘Crazy’ spending

Fueled by August’s sharp fall in the lira, which drove up import costs, inflation is on a rapid upward trajectory. Some predictions warn inflation could approach 30 percent in the coming months.

While international markets are broadly welcoming the central bank’s interest rate hike, economist Demir warns more action is needed.

“This rate hike does not undo the damage inflicted on corporate balance sheet, and market concerns about geopolitics will remain in place. So this is not the hike to end all problems,” said Demir.

The World Bank and IMF repeatedly have called on Ankara to rein in spending, which they say is fueling inflation. Perhaps in response, Erdogan has announced a freeze on new state construction projects.

In the past few years, he has embarked on an unprecedented construction boom, including building one of the world’s largest airports and a multibillion-dollar canal project in Istanbul, which the president himself described as “crazy.”

Trade tariffs

Investors also remain concerned about ongoing diplomatic tensions between Ankara and Washington. The two NATO allies remain at loggerheads over the detention on terrorism charges of American pastor Andrew Brunson.

Brunson’s detention saw U.S. President Donald Trump impose trade tariffs on Turkey, which triggered August’s collapse in the lira. Trump has warned of further sanctions.

“If we somehow sort out our problems with the United States and adopt an orthodox austerity program, we may find a way out of this mess,” said political analyst Atilla Yesilada of Global Source Partners.  “Turkey is a country that has a net foreign debt of over $400 billion, and where 40 percent of [Turkish] deposits are in foreign currency, so the game could be over in a day.”

Turkey has a long tradition of carrying out business in foreign currencies to mitigate the threat of inflation and a falling lira. The growing danger of the so-called “dollarization” of the economy and the public abandonment of the lira are significant risks to the currency.

Turkish companies are paying the cost for the depreciation of the lira. Analysts estimate about $100 billion in foreign currency loans have to be repaid by the private sector in the coming year. Companies and individuals borrowing in local currency, however, will be facing higher repayments. And most analysts predict the Turkish economy is heading into a recession.

Economist Demir says, though, that the situation could have been far worse.

“In the absence of an [interest rate] hike, the rollover pressures on banks would get even worse, damage on corporate balance sheets would intensify, and local deposit holders’ confidence would have weakened further. So this hike, although it doesn’t eliminate other risks, eliminates some of the worst outcomes for the Turkish economy,” he said.

Thursday’s rate hike appears to have bought time for the Turkish economy and the nation’s besieged currency. Analysts say investors are watching to see if Turkey’s decision-makers use that time wisely.
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A Renoir masterpiece stolen by the Nazis in World War II is back in the hands of the Jewish family who owned it.

Sylvie Sulitzer, granddaughter of the original owner, received the painting, “Two Women in a Garden,” at a ceremony Wednesday at the Museum of Jewish Heritage in New York.

“I’m very thankful to be able to show my beloved family, wherever they are, that after all they’ve been thorough, there is a justice,” Sulitzer said.

“Two Women in a Garden” was among the last works Renoir painted before he died in 1919.

Sulitzer’s grandfather, famed art collector Alfred Weinberger, stashed the painting with the rest of his collection in a Paris bank vault before fleeing the Nazis, who occupied Paris in 1940.

Weinberger tried but failed to recover his collection after the war.

The Renoir painting was bought and sold several times over the next 70 years, traveling to South Africa, Switzerland and London before finally being put up for auction in New York in 2013.

Christie’s Auction House suspected the work may have been stolen by the Nazis and contacted the FBI, who contacted Sulitzer in France.

She has told the French News Agency that five other works from her grandfather’s collection still need to be recovered. They include four other Renoirs.

“We’ll never forget. We can’t forget. But it’s very important that we, me as a human being, as a Jewish person, to consider that you have people who work for justice,” she said.
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The United States is threatening automatic sanctions to deter Russia and any other current or future adversary from interfering in the country’s elections.

President Donald Trump declared a national emergency Wednesday, signing an executive order that mandates a range of economic sanctions and other penalties against any person, group or country assessed to have meddled with the upcoming midterm elections November 6.

The order comes eight weeks before voters go to the polls and covers attacks on America’s election infrastructure, such as voting machines and voter databases, cyber attacks against candidates or political organizations, and disinformation campaigns.

It also comes as the White House is trying to take a tougher line against Moscow after Trump publicly accepted Russian President Vladimir Putin’s denials of his country’s involvement in any interference in the 2016 U.S. presidential elections, contrary to the findings of the U.S. intelligence community.

“It’s a further effort, among several that the administration has made, to protect the United States against foreign interference in our elections and really our political process more broadly,” National Security Adviser John Bolton said Wednesday while briefing reporters.

“We felt it was important to demonstrate the president has taken command of this issue, that it’s something he cares deeply about,” Bolton added.

Russian meddling attempts

There have been ongoing concerns about attacks or disinformation campaigns, fueled in part by Trump’s own attacks against the ongoing special counsel investigation into Russia’s activities and into possible collusion with Trump’s own campaign staff.

Trump has repeatedly dismissed the investigation as a “witch hunt.”

But in a statement late Wednesday, the president said his executive order makes clear the United States “will not tolerate any form of foreign meddling in our elections.”

“When it comes to foreign policy, my administration has delivered decisively and taken action where previous administrations have not,” Trump said. “By signing this Executive Order, I am adding to my record of implementing the strongest measures to date of any United States president to protect our electoral system.”

​​Automatic sanctions

The new executive order gives U.S. intelligence agencies 45 days after an election to report any efforts to meddle with the outcome.

The U.S. attorney general and the Department of Homeland Security will then have 45 days to review those findings. If they agree with the assessment, it would trigger automatic sanctions.

Those sanctions could include blocking access to property and interests, restricting access to the U.S. financial system, prohibiting investment in companies found to be involved, and even prohibiting individuals from entering the United States.

Additionally, the order authorizes the State Department and the Treasury Department to add on additional sanctions, if deemed necessary.

A key State Department official praised the executive order as a good start.

“I applaud the attempt to make it harder to evade, to let something fall away and not be countered,” Michele Markoff, the State Department’s Deputy Coordinator for Cyber, said during a panel discussion in Washington Wednesday.

“We’re setting up a process or a mechanism where if we see something, we’re going to say something,” she said. “The way we have been doing it [until now] is fingernail-pulling.”

Some former officials also praised the order as a “step in the right direction.”

Growing skepticism

“I think it’s going to be good,” said Sean Kanuck, a former intelligence officer for cyber issues, now with the International Institute for Strategic Studies.

Still, Kanuck said the executive order alone is likely not enough.

“I don’t know that it will be a complete solution,” he said. “I doubt it will completely change the incentive-cost-benefit analysis of the other side.”

Other cyber analysts are even less optimistic.

“The July Helsinki meeting between Trump and Putin has a visual effect that is searing and long lasting,” said Laura Galante, a senior fellow at the Atlantic Council who has previously worked with the U.S. government.

“Words, and those words in Helsinki, probably speak louder than executive action,” she said.

Additional measures possible

Key lawmakers are likewise cautious.

“An executive order that inevitably leaves the president broad discretion to decide whether to impose tough sanctions against those who attack our democracy is insufficient,” Mark Warner, the ranking Democratic member of the Senate Intelligence Committee, said in a statement.

“If we are going to actually deter Russia and others from interfering in our elections in the future, we need to spell out strong, clear consequences, without ambiguity,” Warner added.

“Today’s announcement by the administration recognizes the threat, but does not go far enough to address it,” Republican Senator Marco Rubio and Democratic Senator Chris Van Hollen said in a joint statement Wednesday.

But Senate Intelligence Committee Chairman Republican Richard Burr expressed hope the new executive order will “send a clear message” to Russia, Iran and others.

Not just Russia

Trump administration officials said Wednesday they have not ruled out working with lawmakers on additional measures, but said they did not want to have to wait for legislation to be approved before having a chance to act.

And while some of the proposed legislation focuses on Russia, the officials said it was important to take a broader view.

“We have seen signs of not just Russia, but from China, of capabilities, potentially from Iran, and even North Korea,” U.S. Director of National Intelligence Dan Coats told reporters Wednesday.

“In terms of what the influence is and will be, we continue to analyze all that,” Coats added. “This is an ongoing effort here, and it has been for a significant amount of time, and will continue on a, literally, 24-hour-a-day basis until the election.”
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Russian President Vladimir Putin said Wednesday that he wanted to sign a formal peace treaty with Japan ending hostilities from World War II by the end of the year without conditions.

Seventy-three years after the war concluded, the two countries remain technically at war because of a territorial dispute over four Pacific islands.

“Let us sign the peace treaty … and later we will continue to talk about all of our disagreements as friends on the basis of a peace treaty,” Putin said at an economic conference in Vladivostok.

Japanese Prime Minister Shinzo Abe appeared open to a treaty, saying it was “not normal” that one still hasn’t been signed after seven decades.

“Japan and Russia — both President Putin and myself — share the same position and determination to solve our territorial disputes,” he said.

But a Japanese government spokesman said Japan’s position had not changed and that the issue of sovereignty over the islands needed to be resolved before signing any treaties with Russia.

The Soviet Union seized the four islands north of Hokkaido and east of Sakhalin in the closing days of World War II.

Russia calls the islands the Kurils, while Japan calls them the Northern Territories. Russia has sovereignty over the islands. Japan wants them back.

The islands are rich in minerals and rare metals, and its waters are excellent fishing grounds. 

Putin and Abe have met more than 20 times to discuss the dispute.

Abe has proposed making the islands a joint economic zone, which could lead to a settlement.
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Nataša Kandić, the formidable Serbian human rights campaigner and Nobel Peace prize nominee, shrugs. “Nobody likes the truth,” she says.

For almost three decades Kandić has been a thorn in the side of those who butchered, raped and tortured during the Balkans wars of the 1990s. She documented abuses and massacres. She protested what was unfolding, cajoling and informing a shocked world, insisting it pay attention to the return of genocide to Europe, and to do something about it.

The evidence she gathered was used in the preparation of many indictments issued by the U.N. International Criminal Tribunal for the former Yugoslavia in The Hague, including a video of Bosnian-Serb paramilitaries executing a number of captives, which helped prove Serbia’s role in the Srebrenica massacre of 7,500 Bosnian Muslim men and boys.

She has drawn the praise of human rights activists across the world, but in her home country she has seen by many as a traitor and drawn the hatred of the Serbs’ wartime leaders and their followers, including a new generation of ethnic nationalists who glorify ethnic cleansing and the Balkans conflict, which marked the first large-scale slaughter of civilians in Europe since the Nazi era.

During an interview in downtown Belgrade at the Humanitarian Law Center, an NGO she founded in 1992, she said, “The majority of public opinion is without respect for human rights. Truth is not so nice for people and politicians because Serbia bears responsibility for many war victims, wrongdoing, bad relations with neighbors, especially Kosovo. And we don’t have politicians who are willing to take responsibility for the wrong decisions of Serbia. All of them participated in making decisions in 1991 at the beginning of the war.”

Hours after she spoke with VOA, Serbian President Aleksandar Vučić lauded Serbia’s wartime leader Slobodan Milošević, describing him in a speech as “a great Serbian leader” whose “aims were certainly the best.” Vučić criticized former Serbian officials, who he dubbed pro-Western, for handing over Slobodan Milošević and his generals to the U.N. war crimes tribunal in The Hague.

His remarks prompted outrage in neighboring Balkan states where Milosevic’s ultranationalist policies during the breakup of Yugoslavia prompted bloodshed and destruction, and the deaths of at least 120,000 people in Bosnia, Croatia, and Kosovo.

For Kandić, Vučić’s remarks are not a surprise. Like many human rights activists and war victims in the Balkans she is frustrated with the halting progress made with transitional justice since the end of the Balkans conflict. She believes punishments and prosecutions, acknowledgement, and the apportioning of guilt are necessary to advance reconciliation.

She laments the ending of the mandate of the International Criminal Tribunal for the Former Yugoslavia, which wrapped up its work last year. She says the court changed the landscape of international humanitarian law and its legacy is important, but she worries “there is no other body to build on that legacy.”

Kandić says Western countries have neglected human rights in the Balkans and is urging them to back her calls for the establishment of a regional commission “to register all of the victims, to oblige states to name the victims and with a mandate to collect information to establish the identities of 130,000 victims; to establish the facts about how they lost their lives and organize public recognition.”

She asks, “How can you establish the rule of law without punishing the people who committed the crimes in the past?”

Kandić clearly is fearful of backsliding amid rising nationalist sentiment across the Balkans. “For example, in Kosovo, all the leaders were very active in the war, they were on the top level, they were war leaders. In Serbia, all current opposition leaders were very close to Milosevic.”

She is not alone nursing worries. In the Serbian-controlled Republika Srpska, one of the two legal entities of Bosnia and Herzegovina, Aleksandra Letić of the Helsinki Committee for Human Rights, bewails an increase in nationalist rhetoric, fanned by the politicians, especially before Bosnia-wide elections next month.

“Everybody, in particular the international community, is pretending that the pink elephant [a euphemism for hallucination] is not running through the streets of Bosnia Herzegovina,” she says.

A new generation of youngsters are thrilling to the idea of Serbian ultra-nationalism and there is little effort to pull them the other way, she says. “In Bosnia Herzegovina monuments are raised to the perpetrators, but the victims are neglected. We have only one official monument for the victims in Republika Srpska and that was built because of international pressure.”

“What is concerning is that those who are actually supporting war criminals, supporting the ideology of those who actually committed war crimes are young people born after the war,” says Letić. She adds the young generation should be the driving force for progress towards an open and democratic society, but is “deeply involved in nationalistic and chauvinistic behavior.”

The schools, she laments, do not teach what the war criminals did to get convicted. “Some of the history text books end before the peak of the Balkans conflict,” she complains.

 
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European Union legislators took the unprecedented step Wednesday to begin process of imposing sanctions on Hungary for presenting a “systematic threat” to the bloc’s Democratic values.

The European Parliament voted 448-197 to launch an Article Seven process, which could result in the suspension of Hungary’s EU voting rights.

The vote dealt a serious blow to Prime Minister Viktor Orban, further isolating him from powerful allies in the midst of his ambitious effort to push Europe toward Hungary’s version of an “illiberal democracy.”

Orban managed during his eight years in office to deflect his critics, who contend Hungary’s electoral system is irregular, media freedom and judicial independence are waning and refugees and asylum-seekers are abused.

Hungarian Foreign Minister Peter Szijjarto condemned the vote as “nothing less than the petty revenge of pro-immigration politicians.” He also said Hungary was considering legal actions because the vote was tainted by “massive fraud” since abstentions were not included in the final count.

There were 48 abstentions, so the 448 votes in favor of the sanctions exceeded the two-thirds needed only because it was based on 645 votes.  If the abstentions were counted, there would have been a total of 693 votes.

Judith Sargentini, a Dutch politician who presented the European Parliament’s report recommending the sanctions process, welcomed the results of the vote.

“Viktor Orban’s government has been leading the charge against European values by silencing independent media, replacing critical judges, and putting academia on a leash,” she said. “The Hungarian people deserve better.  They deserve freedom of speech, non-discrimination, tolerance, justice and equality, all of which are enshrined in the European treaties.”

With European Parliament elections in May, the dispute over Hungary and Poland, which faces a similar sanctions process that was initiated by the European Commission last year, highlights tensions between nationalists and federalist camps on the continent.

 
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The European Union must flex its muscles as a world power, EU chief executive Jean-Claude Juncker said on Wednesday, as he spoke critically of U.S. President Donald Trump’s retreat from international engagement.

In his annual State of the Union address to the European Parliament in Strasbourg, Juncker, who is entering his final year as president of the European Commission, urged EU states to bridge angry divisions over budgets, immigration and other issues in order to capitalize on a chance to shape the world.

“Whenever Europe speaks as one, we can impose our position on others,” Juncker said, arguing that a deal he struck in July with Trump to stall a transatlantic tariff war and which won plaudits for the Commission should have come as no surprise.

“The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come,” he said.

Juncker made no direct comment on Trump or U.S. policy but aides said the geopolitical situation he spoke of was a U.S. retreat into what Juncker described elsewhere in the speech as “selfish unilateralism”. He also saw new opportunities to work with China, Japan and others to develop “multilateral” rules.

Some proposals to strengthen the EU’s effectiveness face an uphill battle against member state opposition, notably scrapping national vetoes in some foreign policy areas, such as where economic pressure from the likes of Russia or China on certain EU countries has blocked EU sanctions to defend human rights.

In repeating his support for deeper economic integration, he also pushed the idea that the euro should challenge the dollar as the world’s leading currency, calling it “absurd” that the EU pays for most of its energy in the U.S. currency despite buying it mainly from the likes of Russia and the Gulf states. He said

airlines should also buy planes priced in euros not dollars.

Juncker renewed calls for states to push ahead in developing an EU defense capability independent of the U.S.-led NATO alliance and to embrace Africa through investment and a sweeping new free trade area — part of a strategy to curb the flow of poor African migrants which has set EU governments at each other’s throats and fueled a sharp rise in anti-EU nationalism.

EU divisions

Without naming Hungarian Prime Minister Viktor Orban, Juncker blasted EU leaders who sought to undermine democracy and the rule of law and rejected complaints from lawmakers that the Commission has been lenient toward Hungary, Poland and other eastern states.

Later on Wednesday, the European Parliament voted to sanction Hungary for flouting EU rules on democracy, civil rights and corruption in an unprecedented step that could lead to a suspension of Budapest’s EU voting rights.

At the same time, the Commission put forward a plan to get even tougher on illegal economic migrants whose arrival has so angered Orban and others.

However, the idea of a fully federal European Border and Coast Guard, with its own 10,000-strong uniformed force run from Brussels may hit national resistance.

With an eye on elections next May to the European Parliament, Juncker proposed new vigilance, and penalties, for attempts to manipulate voters. As the centenary nears of the end of World War One, he recalled how Europeans were taken totally by surprise by its outbreak and urged more respect for the EU as a force for peace against nationalistic “poison and deceit.”

He spoke of regret at Britain’s impending withdrawal from the bloc which will mark his five-year mandate and warned Prime Minister Theresa May that the EU would not compromise its single market to let London pick and choose which rules to obey.

But as negotiators struggle to overcome problems about the future of the land border on the island of Ireland, Juncker also pledged that Britain would remain a very close partner.

In the parliamentary debate which followed his hour-long address, Nigel Farage, of the UK Independence Party, accused him of failing to acknowledge the arrival of euroskeptics in government in Italy and a “populist revolt” across Europe that he said would resist Juncker’s aim to centralize more power.
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European Union governments are failing to comply with air quality limits that are already weaker than the World Health Organization’s recommendations, the bloc’s auditors said Tuesday.

The findings by the EU watchdog come as Brussels is taking half a dozen member states to court over their failure to enforce the bloc’s air quality laws.

Respiratory illness caused by pollution result in 400,000 premature deaths a year, costing governments heavily in health care expenses, the European Court of Auditors found.

“There are still considerable impacts on public health,” said Janusz Wojciechowski, one of the report’s authors.

As many as 23 out of the bloc’s 28 nations are failing to comply with the existing limits on harmful pollutants such as nitrogen oxide and particulate matter, according to EU data.

Responding to the report, the EU executive said it was stepping up action to reduce pollution and defended its policy record, pointing to improvements in some areas.

“The commission is fully aware that there is still an urgent need to further improve air quality in Europe,” a European Commission spokesman said.

The commission said in May that it would sue Britain, France, Germany, Hungary, Italy and Romania at the bloc’s highest court for breaching rules on air pollutants.
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At the height of the crisis over Catalonia’s secession drive last year, thousands of companies moved their legal headquarters out of the region, the Madrid stock market and government bonds took a hit, and the Spanish

state came under strong pressure.

Nearly a year later, the organizers of an illegal referendum on independence for Catalonia are in jail or in self-imposed exile, Spain has a new prime minister, and the economy has stabilized. But the situation remains tense and could flare up any time.

Danger for economy

Despite the crisis, Catalonia remains one of Spain’s main economic powerhouses and still accounts for around a fifth of national gross domestic product. 

However, a Catalan trade group says hotels in Barcelona have seen revenue fall 14 percent this summer after the city developed a negative reputation internationally, partly as a result of political instability.

Data also showed fewer new businesses were created in Catalonia and international investment had dropped, putting the region on track to fall behind Madrid in terms of economic output for the first time.

More than 3,000 firms have shifted their headquarters outside the region, many to Madrid. The risk is that the uncertainty over investments in Catalonia will translate into a slow economic decline.

Impact on politics

Spanish Prime Minister Pedro Sanchez, who ousted the conservative Mariano Rajoy in June, remains opposed to independence for Catalonia, something the Spanish constitution does not allow.

Sanchez has, however, adopted a softer tone and offered to hold a wide-ranging dialogue that could lead to drafting a new statute of autonomy that Catalans would have the opportunity to adopt or reject by referendum.

Catalonia’s new leader, Quim Torra, last week dismissed the idea that this could be a way forward and instead called on Sanchez to accept a legally binding referendum on independence.

Because Sanchez needs Torra’s party votes in the national parliament to pass the annual budget bill, a failure to find common ground in Catalonia would most likely spill over to national politics in Madrid — and possibly trigger a snap national election in early 2019.

Will issue go away?

According to a survey released in July, 46.7 percent of Catalans want their region to become an independent state, while 44.9 percent oppose this solution.

The proportions of those who favor and those who oppose independence has remained roughly stable over the last four years, meaning the issue is unlikely to go away any time soon.

Catalonia also elected a new regional parliament this year in which separatist forces retained a majority of seats. The trials of jailed separatist leaders should keep the Catalan question at the top of the political agenda for the time being.
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