Month: October 2018

Several major Russian companies are exploring ways to do deals abroad without using dollars, spurred on by a U.S. threat to broaden sanctions that have impeded access of some Russian firms to the international banking system.

The Kremlin has been pushing companies to conduct more deals using other currencies to reduce reliance on the dollar.

Russian Alrosa, the world’s biggest producer of rough diamonds in carat terms, said it had completed a pilot deal with a Chinese client using yuan in the summer and another non-dollar transaction with an Indian client.

Other companies working on similar transactions include energy firm Surgutneftegaz, agricultural company Rusagro and miner Norilsk Nickel.

Russia’s central bank said this week the amount of non-dollar dealings was growing, with the share of rouble settlements in the Russia-China and Russia-India goods trade now between 10 and 20 percent.

The share was higher in the service industry, it added.

But there are limits to how much business can be shifted.

Major companies still rely heavily on dollar deals and most of Russia’s foreign earnings come from oil sales priced in dollars.

In addition, foreign banks with major U.S. activities may still be wary of business with any entity under U.S. sanctions even if transactions are not in dollars, bankers say.

The United States and its allies imposed sanctions on Russia in 2014 over Moscow’s annexation of Crimea. Washington said in August more measures could follow, after accusing Moscow of using a nerve agent against a former Russian agent and his daughter in Britain.

The new steps, which could be announced in November, may target dollar dealings, U.S. lawmakers have said.

Speed helps

One challenge facing companies dealing in the rouble is the Russian currency’s volatility. Between April 6 and 11, after Washington imposed sanctions on Russian billionaire Oleg Deripaska and some of his companies, the rouble lost almost 13 percent of its value against the dollar.

Alrosa said it avoided the fluctuation risk by completing the Chinese deal in a day. U.S. dollar deals tend to take longer due to associated compliance checks required.

“An increase in the speed of operations is an advantage in such an operation,” the company said in an emailed statement.

Alrosa did not give a value for its China and India deals but said the Chinese buyer had bought a lot at its auction of diamonds of 10.8 carats or larger in Hong Kong. Alrosa data indicates that its lots are on average worth about $100,000.

Alrosa said the banker for its Chinese deal was Shanghai office of VTB, Russia’s second-largest bank. An industry source, asking not to be named, said Russia’s biggest bank lender Sberbank worked on the Indian deal.

VTB and Sberbank declined to comment.

The Chinese client settled its purchase in yuan, which VTB converted into roubles and transferred to Alrosa.

“We carried out the transaction itself in one day, in several hours,” Alrosa said, adding that on this occasion the currency move was in the client’s favor.

No currency hedging was required because of the speed of the deal, the company said, but the client had to open an account in VTB’s branch in Shanghai to complete the transaction.

Alrosa said it was also considering settlement for future deals in Hong Kong dollars, adding that other Chinese clients had shown interest in non-dollar transactions.

Non-dollar limits

But there are limits on how much of Alrosa’s business can switch to other currencies. China accounts for just 4 percent of its sales, while India accounts for 17 percent.

Among initiatives by other Russian firms, Surgutneftegaz has been pushing buyers to agree to pay for oil in euros instead of dollars, Reuters reported in September.

Russian farming conglomerate Rusagro told Reuters that some of its trading operations were in yuan and said this would increase with the expansion of business with China.

Russian nickel and palladium producer Norilsk Nickel said it was discussing the option of rouble payments with foreign customers which have rouble revenue, although it said it had not secured deals under those terms.
…

Hundreds of taxis on Thursday drove at a snail’s pace across the Polish capital Warsaw in protest at the ride-sharing app Uber and other unlicenced competitors.

Other cab drivers gathered in front of the justice ministry to call for legislation to regulate the industry.

Traditional cab operators argue that the Uber app and others like it represent unfair competition because their drivers can dodge the rules and restrictions that regulate professionals.

“There are 12,500 legal taxis in Warsaw and around 8,000 to 9,000 unregistered working for Uber, Taxify and a couple dozen other similar app-based operators,” said Jaroslaw Iglikowski, head of the Warsaw Taxi Drivers union.

“The app-based operators are taking around 30-35 percent of our overall business and up to 70 percent of night-time fares, especially on weekends,” he told AFP.

The protesting cab drivers claim in a petition they gave the justice minister that the country is losing more than 700 million zloty (160 million euros, $190 million) annually in unpaid taxes because of Uber and others like it.

The taxis dispersed in the early afternoon before rush hour, as the drivers had promised they would not cause traffic problems for city residents.

Uber has become one of Silicon Valley’s biggest venture-funded startups and has expanded its ride-sharing services to dozens of countries.

It does not employ drivers or own vehicles, but instead relies on private contractors using their own cars, allowing them to run their own business.

The app claims it is a service provider, connecting passengers with these freelance drivers directly and cheaply.

But critics and competitors around the globe say this allows it to flout costly regulations such as stringent licensing requirements for taxi drivers, who undergo hundreds of hours of training.

 
…

President Vladimir Putin hailed new missiles in Russia’s military arsenals but emphasized Thursday that the country would only use its nuclear weapons in response to an incoming missile attack.

Putin emphasized during an international policy forum in Sochi that Russia’s military doctrine doesn’t envisage a preventative nuclear strike. He said Moscow only would tap its nuclear arsenal if early warning systems spotted missiles heading toward Russia, in which case “the aggressor should know that retaliation is inevitable.”

“Only when we become convinced that there is an incoming attack on the territory of Russia, and that happens within seconds, only after that we would launch a retaliatory strike,” he said during a panel discussion at the forum.

“It would naturally mean a global catastrophe, but I want to emphasize that we can’t be those who initiate it because we don’t foresee a preventative strike,” Putin said.

“We would be victims of an aggression and would get to heaven as martyrs,” while those who initiated the aggression would “just die and not even have time to repent,” he added.

The Russian leader also warned that new hypersonic missiles his country developed give it a military edge.

“We have run ahead of the competition. No one has precision hypersonic weapons,” he said. “Others are planning to start testing them within the next 1 to 2 years, and we already have them on duty.”

Another new weapon, the Avangard, is set to enter service in the next few months, he said. Earlier this year, Putin said the Avangard has an intercontinental range and can fly in the atmosphere at a speed 20 times the speed of sound, making it capable of piercing any missile defense system.

His blunt talk Thursday comes as Russia-West relations remain frosty over the Ukrainian crisis, the war in Syria and the allegations of Russian meddling in the 2016 U.S. presidential vote.

Putin said he still hopes U.S. President Donald Trump will be able to improve the ties between their countries. He thinks Trump wants “some sort of stabilization and improvement of U.S.-Russian ties” and said Moscow is ready for that “at any moment.”

Putin said his meeting with Trump in Helsinki in July was positive and they had a “normal, professional dialogue” even though their exchange brought strong criticism from Trump.

At the same time, the Russian president sharply criticized Washington’s reliance on sanctions against Russia and others, saying the instrument of punishment “undermines trust in the dollar as a universal payment instrument and the main reserve currency.”

“It’s a typical mistake made by an empire,” Putin said. “An empire always thinks that it’s so powerful that it can afford some mistakes and extra costs.”

Building on his defiance and boasts, Putin said Russia had nothing to fear given its defense capability and “people ready to defend our sovereignty and independence.”

“Not in every country are people so eager to sacrifice their lives for the Motherland,” he said.

 
…

Germany has extradited the suspect in the killing of Bulgarian television journalist Viktoria Marinova to Bulgaria, an Interior Ministry official said Wednesday.

Bulgarian Severin Krasimirov is to be charged in person with the rape and murder of 30-year-old Marinova, whose body was found in a park in her Danube hometown of Ruse on Oct 6. Police said she was beaten and raped and died of suffocation.

Prosecutors have said evidence did not indicate Marinova’s death was related to her work and pointed to a random sexual crime although they are still investigating all possibilities.

Krasimirov was arrested in Germany last week where he admitted partial guilt to a German court.

“German authorities have handed over … the 21-year-old citizen of Ruse,” the Interior Ministry said in a statement.

A German prosecutor confirmed Krasimirov has been extradited via a flight from Frankfurt.
…

Leaders from the European Union and Britain shrugged off a weekend negotiating debacle and previous deadlines Wednesday, giving themselves several more weeks to clinch a friendly divorce deal ahead of their separation. 

After the EU insisted for months that the Wednesday summit was a key meeting to get a deal, its Brexit negotiator Michel Barnier said “we need much time, much more time and we continue to work in the next weeks” with his British counterpart.  

British Prime Minister Theresa May also spoke about “working intensively over the next days and weeks” to achieve agreement that avoids a no-deal departure from the bloc on March 29 that could create chaos at the borders and in the economy. A deal must be sealed soon so parliaments have time to give their verdict on it. 

Underscoring the newfound sense of non-urgency, Prime Minister Sebastian Kurz of Austria, which holds the rotating EU presidency, even spoke of the “coming weeks and months” to get a deal and sought to impose a soothing calm. 

“There’s no need to dramatize matters. It’s always the case with negotiations, that in the end there are challenges,” he said. 

May was preparing to address other EU leaders one day after European Council President Donald Tusk implored her to present new ideas for resolving the tricky problem of how to keep the land border between the Republic of Ireland and the U.K.’s Northern Ireland friction-free once Britain no longer is an EU member. 

Tusk advised May that “creative” thinking from Britain was required to avoid a hard border on the island of Ireland, the issue that has brought divorce negotiations to a standstill. EU leaders dismissed May’s most recent proposal as unworkable. 

But when the prime minister was asked in the House of Commons earlier Wednesday whether her government’s blueprint for an amicable divorce was dead, May replied: “The answer is no.” 

The summit in Brussels had long been seen as the “moment of truth” in the two-year Brexit process. But after urgent talks on the Irish border ended Sunday without producing a breakthrough, Wednesday’s gathering looked more like a therapeutic bonding session than an occasion to celebrate. 

The timeline for a deal has slipped into November, or even December, when another EU summit is scheduled.

“Today there will be no breakthrough,” said Lithuanian President Dalia Grybauskaite. She said 2 1/2 years after Britain’s Brexit referendum, the country had still not explained clearly how it wants to leave the EU.

“Today, we do not know what they want,” she said. “They do not know themselves what they really want. That is the problem.”

At present the two sides are proposing that Britain remains inside the EU single market and is still bound by its rules from the time it leaves the bloc in March until December 2020, to give time for new trade relations to be set up.

Many suspect that will not be enough time, which has led the EU to demand a “backstop” to ensure there are no customs posts or other controls along the currently invisible border between Northern Ireland and Ireland. 

And there is talk that a transition period for the U.K. to adapt to its new status as a third country could be extended by a year. 

Britain says it has not asked for an extension, but May has not yet come up with proposals for unblocking the Irish border logjam. She is hemmed in by pro-Brexit members of her Conservative Party, who oppose any more compromises with the bloc, and by her parliamentary allies in Northern Ireland’s Democratic Unionist Party, who insist a solution can’t include customs checks between Northern Ireland and the rest of the U.K. 

 
…

Newly released Ecuadorian government documents have laid bare an unorthodox attempt to extricate WikiLeaks founder Julian Assange from his embassy hideaway in London by naming him as a political counselor to the country’s embassy in Moscow.

But the 47-year-old Australian’s new career in international affairs was nipped in the bud when British authorities vetoed his diplomatic status, effectively blocking him from taking up the post in Russia.

The files were made public late Tuesday by Ecuadorian opposition lawmaker Paola Vintimilla, who opposes her government’s decision to grant Assange nationality. They largely corroborate a recent Guardian newspaper report that Ecuador attempted the elaborate maneuver to get Assange to Moscow just before Christmas last year.

Russian diplomats called the Guardian story “fake news,” but the government files show Assange briefly was made “political counselor” to the Ecuadorian Embassy in Moscow and eligible for a monthly salary pegged at $2,000.

Ecuador also applied for a diplomatic ID card, the documents show, but the plan appears to have fallen apart with the British veto.

A letter dated Dec. 21, 2017, from Britain’s Foreign Office said U.K. officials “do not consider Mr. Julian Assange to be an acceptable member of the mission.”

An eight-page memo to Vintimilla summing up the episode noted that Assange’s position as counselor was scrapped a few days later.

WikiLeaks did not return messages. The British Foreign Office and the Russian Embassy in London declined to comment.

Assange’s relationship with Russian authorities has been the subject of intense scrutiny following the 2016 U.S. election, when Russian spies are alleged to have handed WikiLeaks leaked emails from presidential candidate Hillary Clinton’s campaign in a bid to help elect her rival, Donald Trump.

Assange has denied receiving the files from the Russian government or backing the Trump campaign, despite a growing body of evidence suggesting he received material directly from Russia’s military intelligence agency and coordinated media strategy with Trump’s son, Donald Trump Jr.

Last month, the AP published internal WikiLeaks files showing Assange tried to move to Russia as early as 2010.
…

The White House has announced plans to negotiate separate trade deals with Britain, the European Union and Japan.

“We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers and businesses,” U.S. Trade Representative Robert Lighthizer said Tuesday.

He added that the White House wanted to “address both tariff and non-tariff barriers and to achieve fairer and more balanced trade.”

As required by law, Lighthizer sent three separate letters to Congress announcing the intention to open trade talks.

He wrote that the negotiations with Britain would begin “as soon as it’s ready” after Britain’s expected exit from the European Union on March 29.

Lighthizer called the economic partnership between the U.S. and EU the “largest and most complex”in the world, noting the U.S. has a $151 billion trade deficit with the EU

Writing about Japan, Lighthizer said it is “an important but still often underperforming market for U.S. exporters of goods,” noting that Washington also has a large trade deficit with Tokyo.

The top Democrat on the Senate Finance Committee, Oregon’s Ron Wyden, cautioned the administration against making what he called “quick, partial deals.” 

“The administration must take the time to tackle trade barriers comprehensively, including using this opportunity to set a high bar in areas like labor rights, environmental protection and digital trade,” he said.

President Donald Trump imposed tariffs on European steel and aluminum exports earlier this year and has threatened more tariffs on cars as a reaction to what he said were unfair deals that put the U.S. at a disadvantage.
…

Russian cosmonaut Aleksey Ovchinin says the force he felt during a Soyuz emergency landing last week was like having a concrete block on his chest.

Ovchinin and U.S. astronaut Nick Hague spoke separately Tuesday about their frightening experience when an unknown mishap caused their Russian Soyuz to abort its mission 60 kilometers (37 miles) above Kazakhstan.

The spacecraft was on its way to the International Space Station when the emergency lights flashed in the cabin just minutes into the flight.

“There was no time to be nervous because we had to work,” Ovchinin told Russian television. “We had to go through the steps that the crew has to take and prepare for emergency landing … so that the crew is still functioning after landing.”

Ovchinin recalled being violently shaken from side by side as the crew cabin separated from the rocket, followed by a force seven times stronger then gravity as the cabin plunged through the atmosphere, followed by the shock of the parachutes yanking open.

Back home in Houston, Hague told the Associated Press, “We knew that if we wanted to be successful, we needed to stay calm and we needed to execute the procedures in front of us smoothly and efficiently as we could.”

Hague said he and Ovchinin were hanging upside down when the cabin landed back on Earth. They shook hands and cracked jokes.

Neither man was hurt, and an investigation is under way to find out why the rocket failed.

Hague said he is disappointed to be back home instead of walking in space, but he’s happy to be reunited with his wife and their two young sons, and is ready to fly again as soon as NASA gives him the word.

“What can you do? Sometimes you don’t get a vote,” Hague told the Associated Press. “You just try to celebrate the little gifts that you get, like walking the boys to school this morning.”

This was the first aborted Soyuz launch in more than 30 years.

The Russian spacecraft has been the only way to send replacement crews to the International Space Station since NASA retired the space shuttle fleet in 2011.

Two private U.S. companies — Boeing and SpaceX — are working on a new generation of shuttles.
…

Egypt’s president urged Russia on Tuesday to resume direct flights to Egyptian resorts as he discussed ways to bolster ties with Russian officials and lawmakers.

Moscow suspended the flights after a bomb planted by the Islamic State group brought a Russian passenger plane down over Sinai in October 2015, killing all 224 people on board. 

Flights between Moscow and Cairo resumed in April after Egyptian officials beefed up airport security. Talks about restoring direct air travel to Egypt’s Red Sea resorts have dragged on.

Addressing the Russian parliament’s upper house, Egyptian President Abdel-Fattah el-Sissi emphasized that restoring the flights was essential for Egypt’s tourism industry.

Following meetings in Moscow with top Russian lawmakers and Cabinet ministers, el-Sissi met over dinner with Russian President Vladimir Putin in the Black Sea resort of Sochi later in the day.

The two leaders have developed a close personal rapport and sought to expand bilateral ties, which have strengthened considerably over the past few years.

El-Sissi is on his fourth trip to Russia since taking office in 2014, and Putin visited Egypt in 2015 and 2017.

Egypt has signed deals to buy billions of dollars’ worth of Russian weapons, including fighter jets and assault helicopters. When Putin visited Cairo last December, officials signed a deal for Russia to build a nuclear power plant in Dabaa. 

Putin’s foreign affairs adviser, Yuri Ushakov, told reporters that the two presidents will discuss the implementation of the nuclear plant contract, as well as prospects for the resumption of flights to the Red Sea resorts and other issues.

He said that el-Sissi will be offered a presentation of Russian weapons, including those which Egypt has expressed interest in buying.

Ushakov noted that bilateral trade rose by 62 percent last year reaching $6.7 billion and continued to expand at a swift pace this year.

Russian grain exports currently account for about 70 percent of Egypt’s needs, he said

Ushakov added that Putin and el-Sissi will discuss international issues, focusing on the situation in Syria, Libya, Yemen and the Palestinian-Israeli settlement.

Following broader talks Wednesday, the two presidents are set to sign a comprehensive strategic partnership treaty that would further boost Russian-Egyptian ties.

                   
…

Facebook says that anyone who takes out a British political ad on the social media platform will now be forced to reveal their identity, in a bid to increase transparency and curb misinformation.

The company said Tuesday that it will also require disclaimers for any British political advertisements. All the data on the ad buyers will be archived for seven years in a publicly accessible database.

Facebook is already applying a similar system in the United States, which is holding midterm elections this year.

British lawmakers have called for greater oversight of social media companies and election campaigns to protect democracy in the digital age.

A House of Commons report this year said democracy is facing a crisis because data analysis and social media allow campaigns to target voters with messages of hate without their consent.

“While the vast majority of ads on Facebook are run by legitimate organizations, we know that there are bad actors that try to misuse our platform,” Facebook said in a statement. “By having people verify who they are, we believe it will help prevent abuse.”

Facebook said it’s up against “smart and well-funded adversaries who change their tactics as we spot abuse,” but it believes that increased transparency is good for democracy and the electoral process.

 
…

Germany has deported an accomplice of the Sept. 11, 2001, terrorist attacks on the United States to his home country of Morocco.

Mounir al-Motassadeq had spent almost 15 years in prison in Germany before he was deported Monday to Morocco.

German media published photographs of Motassadeq wearing a blindfold and being led by two armed policemen to a helicopter. German officials confirmed he was flown out by plane from Frankfurt airport on Monday evening.

Motassadeq was convicted of helping Mohamed Atta, the alleged pilot of one of the hijacked 9/11 planes, and other suicide pilots to help plot the attacks on New York and Washington. The suicide pilots were part of an al-Qaida cell based in Hamburg, Germany, where Motassadeq also lived.

Motassadeq was found guilty in 2003 of being a member of a terrorist organization and an accessory to the murder of the passengers aboard the four airliners used in the September 11 attacks. His five years of trials in Germany involved multiple appeals, overturned convictions, and reinstated verdicts. In the end, he received the maximum sentence the German court could hand down for the crimes — 15 years in prison.

Motassadeq denied being involved in the 9/11 plot, but admitted to being friends with those who did. He said his actions to send money to the suicide pilots were merely favors for his friends.

Motassadeq was released shortly before completing his 15-year sentence on the condition that he agreed to be deported to Morocco. Germany says it will re-arrest him if he ever returns.
…

One of the first steps taken by Spain’s prime minister after assuming office in June was to order the exhumation of the remains of right-wing military dictator Francisco Franco from a mausoleum in the capital’s outskirts, where they have rested since he died in power a half century ago.

“Democracy cannot dignify a dictator,” Pedro Sanchez, leader of the Socialist Workers’ Party (PSOE), said in justifying the order.

The decision was hailed by leftists, but critics warned that polarizing struggles between traditional conservatives and a new breed of left-wing populists could end five decades of bipartisan continuity since Franco’s death.

Sanchez maintains a razor-thin edge in parliament’s lower chamber through an alliance with hard-left groups and Catalan nationalists. His priorities, he said in an address to last month’s U.N. General Assembly, include raising social spending, fighting climate change and promoting women’s rights.

Elsewhere in Europe, populism has come to be identified with far-right movements whose rhetoric is often associated with the xenophobia and racism that characterized the fascist movements that brought Adolf Hitler and Benito Mussolini to power.

But today’s Spanish populism, says influential opinion columnist Mario Saavedra, is “leftist” and appears rooted in memories of a 1930’s republic that was overthrown by Franco in a bloody civil war.

The republic established after King Alfonso XIII stepped aside in 1931 captured the imagination of European and American intellectuals such as Ernest Hemingway, who based his novel For Whom the Bell Tolls on his experiences there. It brought together the world’s most fashionable utopian ideologies at the time, including communism and anarchist syndicalism. Democratic socialists occupied its presidency.

Historian Javier Arjona draws parallels between the coalition of leftist parties which maneuvered Sanchez into the prime minister’s seat and the radical “Popular Front” that came to power through a disputed election victory in 1936. Government supporters scoff at the comparison and Sanchez accuses conservatives of appealing to the “extreme right” in a bid to regain power.

Regardless, a leftist brand of republicanism seems to be back in vogue. Its purple colors appear at social protests and adorn the jerseys of some soccer clubs. Catalan nationalists and the far-left United We Can party who prop up Sanchez’s government call for restoring a republic and holding a referendum on the future of the monarchy. Burning pictures of King Felipe has become a ritual at separatist rallies in Catalonia.

United We Can, or Unidos Podemos (UP) in Spanish, is led by Pablo Iglesias, a political science professor who merged a new generation of leftists with remnants of the old communist party. His movement harnessed a wave of social discontent that exploded into mass protests during the recent global recession, in which Spain’s unemployment rate topped 25 percent nationally and reached 50 percent among young people.

Disenchanted working-class supporters of Sanchez’s mainstream PSOE turned to UP, which promised to confront corruption on all sides.  

While Spain has largely recovered from the darkest days of the crash, UP continues to win followers by denouncing abusive business practices such as the eviction of low-income tenants from housing estates when they are bought up by foreign “vulture funds.” It also champions an increase in old-age pensions for Spain’s growing senior population.

In unveiling its budget October 11, the Sanchez government announced an agreement between the PSOE and UP on a package that includes a massive increase in public spending, the expansion of public services, new regulations, and a substantial rise in the minimum wage.

Sanchez has also called for changing Spain’s constitution. His justice minister, Dolores Delgado, an outspoken proponent of women’s rights, has said that it needs to be rewritten to make it more gender neutral.

His vice president, Carmen Calvo, has called for curbing press freedoms to counter what she calls a “high volume of half-truths and lies” by conservative media. She has threatened to take legal action against the conservative, pro-monarchy, pro-Catholic newspaper ABC over its published allegations that Sanchez plagiarized his doctoral thesis.  

Some business leaders say they are worried. John de Zulueta, chairman of the Circulo de Empresarios, the Spanish business association, said tax hikes proposed by Sanchez to cover a rise in social spending could depress the markets at a time when the economy is not fully out of recession. The IMF has also criticized Sanchez’s plans to finance deficit spending.

Government spokespersons defend their actions, saying their plan is adjusted to EU budget requirements.

Conservatives are also trying to block Sanchez from satisfying Catalan separatists by granting pardons to Catalan Vice president Oriol Junqueras and other officials who are in prison awaiting trial for plotting an independence bid.

“We have to find a political rather than a judicial solution to the Catalan crisis,” Sanchez said after recent violent protests in Barcelona.

Political analyst Ramon Peralta, a professor at Complutense University of Madrid, said Sanchez “tries to shield his government by wrapping it in popular causes.”

In his U.N. speech, Sanchez highlighted his feminist agenda, boasting that 60 percent of his cabinet are women and pledging “zero tolerance” of sexual harassment.

Feminist leaders, who see Spain’s traditional culture of machismo as toxic to women’s rights, are strongly backing Sanchez despite a scandal in which the justice minister was caught on tape speaking insultingly about the interior minister’s homosexuality.

Sanchez’ moves have been well received by liberals elsewhere in Europe. In a recent editorial, the British newspaper The Guardian said, “exhuming Franco is a necessary step in the final stages of Spain’s historic journey away from authoritarian violence towards enduring democracy.”

But others, including some of the prime minister’s allies, suggest that steps like the exhumation of Franco will simply fan the flames of the extreme right. Since Sanchez announced plans to open Franco’s crypt, visits to the mountaintop mausoleum have risen by 77 percent.

The visitors have included blue-shirted members of the Falange party, who raise their arms in the fascist salute while singing their battle hymn, “Cara al Sol,” or “Face to the Sun.” A new extreme-right party called VOX has threatened to stage mass protests to block the exhumation.

Spanish public opinion is about evenly split. According to a survey in July by polling institute Sigma Dos, about 41 percent support the decision while 39 percent are opposed. 
…

The Lehman Brothers bankruptcy threw the United States into an epoch-defining financial storm. Imagine 300 of them going bust at once.

That, in relative terms, is what Iceland endured a decade ago during its banking crisis, which on this rugged island steeped in myths of gods and giants is now known as “hrunid” – the collapse.

The last in a series of prosecutions of those deemed responsible started this month and the hope is that it will give this country of 330,000 people some closure after years of reckoning and reconstruction. Icelanders have become more cynical about political and business leaders, to the point of drafting a new constitution. The top financial entrepreneurs of a generation have been thrown behind bars and the economy has had to be reinvented more profoundly than most countries affected by the crisis.

“Icelanders experienced the crash as a deep betrayal, not just as a serious economic loss,” says Jon Olafsson, a professor who advises the prime minister on ways to improve trust in the government. “Politicians, businessmen and the media told the public, over and over, that everything was fine and people believed them.”

Everything was not fine. Over the span of one week, 90 percent of the financial sector defaulted.

The collapse of Iceland’s three major commercial banks – which had grown 20-fold over the previous seven years through debt-fueled acquisitions abroad – amounted to the third-largest bankruptcy in modern financial history, according to the Icelandic financial regulator. For the United States, an economy 1,100 times bigger, it would be like if 300 Lehman Brothers defaulted simultaneously, it notes.

An economic depression followed that saw people line up for food aid, an unprecedented sight in this country with a progressive welfare state. Families stockpiled goods from supermarket shelves and thousands emigrated.

Johanna Thorvaldsdottir, a goat farmer, had a mortgage in a foreign currency – a common practice then because of the strength of the local currency and lower interest rates abroad – when the Icelandic krona lost nearly half of its value overnight. The cost of her debt soared.

“I worked every evening, sometimes until midnight,” she says. Had it not been for a crowdfunding campaign, raising $90,000 from donors worldwide, the family estate would have been seized by bank creditors.

“We were lucky,” she says. “Many people were not.”

As big as the shock of the financial crisis was, so was the country’s determination to put things right. It emerged from recession in 2011 as it refocused the economy on tourism and technology, and it has been more aggressive than most countries in going after the culprits of the crisis.

Altogether, 29 men and two women have been sentenced to a combined 99 years of prison, for crimes ranging from insider trading to market manipulation. Six cases are still in the appeals process. By comparison, no top Wall Street executives have been prosecuted in the U.S.

Last week, Hreidar Mar Sigurdsson, the former CEO of Kaupthing Bank, stood trial in the last criminal prosecution related to the financial crisis.

The 48-year old has been sentenced in four prior cases, to a total of seven years in prison. He now stands accused of rigging share prices in his bank two months before it crashed. He denies wrongdoing. While a guilty sentence is unlikely to send him back to prison, as he has already served the maximum time for such crimes, it would help draw a line under the cases, which have dragged on for years.

Sigurdsson began his career at a fish factory in a small town before entering finance, and was during the booming years hailed as a self-made genius.

In some ways, his story reflects that of the country, which in the 1990s embraced the flashy world of finance to attain the wealth that the traditional industries could not provide. The media frequently referred to aggressive entrepreneurs like Sigurdsson as modern-day Vikings raiding foreign shores for acquisitions. In the end, it led to disaster.

Iceland is bent on “learning every lesson from the crisis,” says Iosif Kovras, director of Accountability after Economic Crisis, a research project based in City University-London.

He contrasted Iceland’s approach with that of Ireland, where the crisis was also traumatic but took longer to unfold. The country received a bailout from fellow European nations that took years of reforms to complete.

“It did not prompt the same political urgency,” says Kovras. “Iceland’s apocalyptic crash cleared the way for gathering evidence and data.”

The University of Iceland this month marked the 10-year anniversary of the crash with a symposium hosting over 100 speakers. They ruminated on topics like the crisis’ impact on cardiovascular health, pop-song lyrics, patriarchy and popular protests.

“There is no formula for restoring a peaceful, democratic society,” former President Olafur Ragnar Grimsson said in an evening-long public broadcast reflecting on the events. “Amid the crisis, when the situation was revolution-like, I feared not for the economy but our recovery as a nation.”

Reforms of the financial sector have focused on making it less risky. Already there are those saying the rules should be relaxed to allow for faster growth, as the U.S. did this year. President Donald Trump’s administration eased a 2010 law that had sought to limit risk in the financial sector and protect taxpayers from bailing out banks. Critics including Trump saw it as red tape holding the economy back.

Others suggest that loosening the rules would merely increase the likelihood of a new crisis and that Icelanders already seem to be forgetting the lessons of the crash.

Thorhallur Thorhallsson, who works as a tour guide in the capital, notes the proliferation of building cranes rising from the skyline.

“We are so used to cranes occupying the sky that it was decided to make them our national bird,” he tells a half dozen tourists gathered by the statue of the Norse explorer who is said to have settled the island 1,100 years ago.

“In fact, today, Reykjavik has more building cranes than before the 2008 crash.”
…

Days ahead of a summit once seen as the moment Britain and the European Union would have to reach a Brexit deal, both sides are still staring at each other over the question of the Irish border, refusing to blink.

A flurry of diplomatic meetings over the weekend had raised hopes for an agreement, only to be disappointed by the issue that has dogged the talks for months — how to ensure no hard border is created between the EU’s Ireland and Britain’s Northern Ireland once Brexit happens on March 29.

The EU has proposed keeping Northern Ireland in a customs union to avoid a hard border between it and Ireland. The fear is that such a border could revive tensions between Northern Ireland’s pro-Irish Catholic and pro-U.K. Protestant communities, in which over 3,700 people died over 30 years of “troubles” ending in 1998.

Britain says it will only accept that plan if it is temporary and does not hive Northern Ireland off permanently from the rest of the U.K. in terms of customs arrangements.

British Prime Minister Theresa May’s spokesman James Slack said Monday that negotiations are stuck because the EU “continues to insist on the possibility of a customs border down the Irish Sea,” a move it feels will effectively split up the U.K., which is made up of England, Scotland, Wales and Northern Ireland.

The acrimony means it is almost impossible that EU leaders will reach a deal at their summit, which begins Wednesday and had long been pegged as the date an agreement should be reached by. The British and EU parliaments need to approve any deal, a process that could take months ahead of the official exit in March.

“Whether we do this week or not, who knows?” British Foreign Secretary Jeremy Hunt told reporters in Luxembourg where EU foreign ministers are meeting.

If Britain leaves the EU without an agreement on future relations, there could be chaos — tariffs would go up on trade, airlines could no longer have permits to fly between the two sides, and freight could be lined up for miles at the borders as customs checks are restored overnight.

To avoid this, the prospect of an extra meeting in November was raised, but only if there was decisive progress this week.

Irish Foreign Minister Simon Coveney admitted to being “frustrated” by the delay, saying that apart from Britain, Ireland is the country with most to lose from Brexit.

Coveney suggested that May is reneging on part of its commitment to ensure that no hard border involving lengthy customs checks and controls emerges on the Irish island.

He said Britain agreed in December and again in March that an unpopular “backstop” guarantee would remain in place until a better solution is found, but now appears to only want it used for a limited time.

“A backstop cannot be time-limited. That’s new. It hasn’t been there before,” he said. “Nobody wants to ever trigger the backstop, but it needs to be there as an insurance mechanism to calm nerves that we’re not going to see physical border infrastructure re-emerging.”

Britain denied it is reneging on its December commitment to avoid a hard Irish border. “We don’t resile from the commitments we have made in relation to the backstop,” said May’s spokesman, James Slack.

Like Britain’s Hunt, Spanish Foreign Minister Josep Borrell said of a deal: “it seems that this week it will not be possible, but this week is not the end.”

He said that he foresees no problems between Britain and Spain over Gibraltar.

“It’s not a rock in the way,” Borrell said, referring to the nickname of the British territory bordering Spain. He added that the Irish border problem is “more difficult to solve than Gibraltar.”

Slovak Foreign Minister Miroslav Lajcak said: “There is no reason to panic. There is still time.”

May is under intense pressure from her Conservative Party and its parliamentary allies not to give any more ground in negotiations, especially on the border issue.

May’s political allies, the Democratic Unionist Party, stand ready to scuttle a Brexit deal over the Irish border issue. The party opposes any border customs checks but EU officials say that may be the only way to avoid a hard border.

DUP Brexit spokesman Sammy Wilson said “it is probably inevitable that we will end up with a no-deal scenario” because there was no agreement that would be accepted by Britain’s Parliament.

In Luxembourg, German Foreign Minister Heiko Maas said he hopes “that in the end good sense will win the upper hand.”

“Time is really pressing now,” Maas warned.
…