Aurelia Butler

The ministry said the pair were due to sign bilateral deals, without giving details. A Greek diplomatic source said the deals were in the fields of energy, military cooperation, and an undersea data cable, among others.Greece and Saudi Arabia agreed in May on the main terms to set up a joint venture to lay the data cable that will link Europe with Asia. The “East to Med data Corridor” will be developed by MENA HUB, owned by Saudi Arabia’s STC and Greek telecoms and satellite applications company TTSA.The visit will be closely watched after the killing of Khashoggi at the kingdom’s consulate in Istanbul sparked a furore in the West.U.S. intelligence concluded the crown prince directly approved the murder of the Washington Post columnist. The prince denies having any role in the killing.Some Western leaders have since visited Riyadh, including U.S. President Joe Biden last week, who said he confronted Prince Mohammed over the killing. Biden said the crown prince had said he had held those responsible to account.France’s President Emanuel Macron and Mitsotakis also visited last year. More

BOGOTA (Reuters) – Colombia’s central bank could hike its benchmark interest rate to 9% at its meeting next week, maintaining rate-increase intensity amid persistent inflation while reaching the end of expected raises, a Reuters poll revealed on Friday.The survey saw 10 out of 14 analysts predict that the bank’s seven-member board would raise the benchmark interest rate by 150 basis points from its current level of 7.50%. Three analysts forecast a hike of 100 basis points – which would take the rate to 8.50% – while one said they expect an increase of 125 basis points, which would take the rate at 8.75%.If the majority are correct, the bank’s benchmark rate will hit its highest level since February 2009.The rise would follow persistent inflation, which hit 9.67% in June, the highest level in 22 years and far from the bank’s 3% target. “The latest inflation data is a real headache for the central bank,” Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, in London, said. “The fall of the peso in recent weeks and the deterioration of external conditions have increased the risks of much higher inflation in the short term,” he added. Seven of the analysts said they expect this to be the last increase of the benchmark rate, while the rest expect one more rise to come. “Our central scenario is that the central bank raises the rate to 9.50% this year, but we wouldn’t be surprised to see a more restrictive rate if prices of raw materials don’t continue to fall as they have in recent weeks,” Abadia said. All of the analysts ruled out any possibility that the bank would adopt measures to contain the volatility of the Colombian peso, following an accelerated depreciation that took it to record lows this month. More

The golden age of low inflation and gently sinking bond yields made many a humdrum investor latching on to basic stock market indices look like a genius. We are starting to see how it made central bankers look like superheroes too.Cast your mind back to July 2012. The eurozone’s government bond market was in a mess, with Greece at the centre and ripples lapping at any other member state seen as fiscally shaky. Generally sober people, not given to hyperbole, were starting to wonder whether the common currency could survive the crisis intact.Enter Mario Draghi, the then still new-ish president of the European Central Bank. On a trip to London, he uttered a now famous phrase, saying that he and the ECB would do “whatever it takes” to save the euro.Those three little words were enough to douse the fire. Sure, the road ahead was bumpy, but the market trusted the former Goldman Sachs banker, who had a certain way with words and a knack for getting traders and investors to do what he wanted. The moment became the stuff of monetary policy legend.Now, we have worries over the eurozone’s markets once again. So far, it is a more low-key affair, ironically enough sparked by Draghi’s resignation from his next job as prime minister of Italy. The run-up to his departure has dented Italy’s government bonds, widening a gap between Italian and benchmark German yields and causing the ECB to fret about fragmentation.Hours after he quit as prime minister, his ECB successor Christine Lagarde made her own big splash: the first rise in interest rates by the central bank in 11 years — a historic half-percentage point jump at that — aimed at pulling down runaway inflation.What’s more, to tackle fragmentation she announced the creation of the Transmission Protection Instrument, or TPI, a scheme to help any euro member state (for which, read: Italy) to fend off unwarranted market instability. “The ECB is capable of going big” on this, says Lagarde.The market’s reaction: a swift thumbs-down. The euro initially jumped. Italian government bonds picked up in price. But the more Lagarde talked about how TPI would work, how it was put together, what the eligibility criteria were and so on, the more those moves reversed. “The bond market manipulation plan is ‘we do what we want, when we want’,” was the rather wry assessment by Paul Donovan, chief economist at UBS Global Wealth Management. “Conditions are determined by the ECB, leaving market manipulation down to spin, not objective assessment. The plan adds excitement to the otherwise dull lives of bond traders, creating a treasure hunt to discover ECB intervention levels.”Lagarde has made some high profile slip-ups in the past, notably when she indicated early in the Covid crisis that she would not support the bond market, a garbled message for which she swiftly apologised.Now, thanks in part to this plan, it looks like this summer will be marked by even more weakness in the euro and quite possibly also an assault on Italian government bonds. Already, the gap between Italian and German 10-year yields has widened back out to around 2.4 percentage points, painfully close to the perceived danger zone of 2.5.On the face of it, this is another mis-step. But that’s unfair. The personnel is not the problem here. Instead, it’s the force that is shaking up markets around the world: inflation.“There will come a point where the ECB is tested more seriously,” says Sonja Laud, chief investment officer at LGIM in London. “We will need something equivalent to a ‘whatever it takes’ moment. But Draghi was only able to do that in the context of much lower inflation.”Draghi was able effectively to say ‘trust me, I will throw money and monetary easing at this problem, ask for details later’. Lagarde does not have the same leeway.Annual inflation was running barely above 0 per cent when Draghi cast his spell a decade ago. Now it is at 8.6 per cent. Lagarde’s job is to get it back down to 2 per cent.In addition, the TPI (not to be confused with the common medical test for syphilis of the same name, nor with TPI Europe — a company that provides “vibration analysis” on machinery), comes with strings attached. Eligible countries must be able to demonstrate, among other things, fiscal sustainability and sound macroeconomic policies.That is tricky when Italy no longer has a prime minister. If the market really did take this on, it is unclear how quickly TPI could be wheeled out to help.“We believe the central bank’s vagueness disappointed market expectations,” says Vasileios Gkionakis, head of G10 currency strategy at Citi. Keep selling euros, he advises.It all serves to underscore how today’s policymakers are just not able to ride to the rescue with the so-called central bank ‘put’ in the way they have in the past, whether that is to help soothe market tantrums or to shield countries from stress.“We took low inflation for granted,” says Laud. “Inflation has changed the narrative so profoundly. Removing the central bank put changes markets so profoundly.”[email protected] More

ATHENS (Reuters) – When the blaze tore through a forest in Greece last August, swallowing up pine trees and scorching the earth, Stathis Albanis knew his beekeeping trade would suffer.A year on, long after the flames died down, he says the impact on livelihoods like his will be felt for a generation.”There are no pine trees left. The beekeepers will get honey again in 30 years, and that’s only if the forest doesn’t burn again,” said Albanis, 62, who had been harvesting Greece’s prized pine honey on the island of Evia since aged 10.As wildfires again rampage across Europe this summer, the Greek beekeeper’s predicament highlights the long-lasting damage done to thousands of individual livelihoods in farming and tourism, let alone the wider cost to the economy.Already this year, wildfires have broken out in a dozen European countries, often simultaneously, burning tens of thousands of hectares of land, and destroying homes and businesses.According to a 2021 European Central Bank report, climate change could wipe over 4 percent off European GDP by 2030 in a worst-case scenario. Yet while the continent is slowly waking up to climate-related liabilities, authorities are struggling to grasp the full implications of wildfires. An ECB report this year found that, of the euro area bank exposures to climate change deemed “high physical risk”, the bulk of those were tied to wildfires mainly affecting southern countries, with a much smaller proportion linked to flooding and sea levels.According to Moody’s (NYSE:MCO) credit ratings agency, Greece – which suffered Europe’s worst destruction from wildfires last summer – can at present cover most of the short-term costs through EU emergency funding. But a rise in the frequency and severity of fires could hurt its tourism industry in the long run.”The long-term costs, not only due to wildfires but more broadly climate change, are rising,” said Steffen Dyck, senior vice president at Moody’s Investor Service. “It is already an economic worry and will most likely increase further. The question then is, how well is Europe positioned compared to other regions to deal with this?” At a time when national budgets and economies have been stretched by the pandemic, governments are under pressure to find more funding for essential firefighting equipment.The EU’s crisis management commissioner Janez Lenarcic told Reuters that member nations must prepare better. “What we see coming is that there will be larger number of more intense weather-related events,” he said.MONEY TO DOUSE THE FLAMESAlready countries are increasing spending for firefighting. France, where blazes sweeping through its southwest region burned campsites to the ground, said it has earmarked 850 million euros ($863 million) to upgrade its fleet of aircraft. Greece, which just this week battled 50 to 70 wildfires a day, has more planes and firefighters compared to three years ago, government spokesman Giannis Oikonomou said. It has allocated 75 million euros for measures like clearing forests and roads “compared to zero budgets in the past.”But for exhausted Greek firefighters on the ground, who often depend on help from volunteers, more needs to be done. “Older firefighters will remember we used to have a megafire every 10 to 15 years,” said Dimitris Stathopoulos, president of the Greek firefighters’ federation, calling for 4,000 new hires to cope with the growing workload. “Now there is a megafire every three years.”Environmental groups like the World Wildlife Fund (WWF) say more money needs to be spent on preventing fires rather than putting them out.In a recent report, it found Greece, Spain, Portugal, Italy and France were spending as much as 80% of available funds on suppression and just 20% on prevention. Across southern Europe, those who live off the land engulfed by flames often take matters into their owns hands. In the northern Portuguese municipality of Murça, where a fire burned uncontrolled this week, 67-year-old olive farmer Manuel Lopes lamented a lack of forest management. He has a full water tank at home to extinguish flames if needed, and spends his own money to clean up dry vegetation that could be a fire risk on his and his neighbours’ land.”People emigrated, there are few people in the villages and everything was left uncultivated and now it is necessary to force people to clean up,” he said.The fires may exacerbate the problem of Europe’s dying villages.”Fires strip away the income of those who live from the forests,” said Vasilis Douras, the former president of Greece’s beekeepers’ federation.”If you want the villages to be alive, the state needs to find ways to keep the people there until the forests grow back.”With Europe not yet in its peak summer season, more extreme weather has been forecast.”What is truly worrying is that we are just witnessing a preview of what will happen in a few years’ time,” said Victor Resco de Dios, professor of forest engineering at Spain’s Lleida University.”What we now consider anomalous will soon be the new normal.”($1 = 0.9849 euros) More