It wants to top up the Franco-German pot with an extra €250 billion to be disbursed as loans. The idea of grants faces fierce opposition from four fiscally conservative northern European countries – the Netherlands, Austria, Denmark and Sweden. This frugal foursome argues instead for loans, which they say would give deeply indebted southern states an incentive to enact the reforms needed to revive their economies. Whatever the final outcome of the negotiations, the Merkel-Macron initiative constitutes a paradigm shift: the principles of common borrowing – to be repaid from new, pan-EU taxes – and of grant aid cannot be "uninvented" now that they have been endorsed by the bloc's two most powerful members. The euro will thus no longer depend solely on monetary support from the ECB in times of crisis, partially satisfying critics who say no common currency in history has survived without political union and the mechanisms for fiscal redistribution that go along with it. Why does this matter for Asia?
And more should be done to shield economies from destabilising swings in the dollar by building local-currency bond markets. Only China and South Korea can boast big markets, accounting for nearly 90% of emerging Asia's $16 trillion in local-currency bonds outstanding, according to the Asian Development Bank. To repeat, Asia is not Europe. But the willingness of EU leaders to take big political risks is a reminder that, in the saying attributed to Winston Churchill, policymakers should not let a good crisis go to waste. Alan Wheatley is an associate fellow at Chatham House, the London think-tank. He was formerly the global economics correspondent and China economics editor for Reuters. ALSO SEE: France hopes for EU recovery fund accord by early July EU banks can weather coronavirus crisis: regulator Trump's pension fund ban could split global markets World reacts to China's growing sphere of influence This story appeared first on Asia Times Financial
Khadim Hussain Rizvi (C), leader of Tehreek-e-Labbaik Pakistan, raises his hands for supporters during a protest rally in Lahore on October 30 following French President Emmanuel Macron's comments over the Prophet Mohammed caricatures. Rizvi died Friday morning. Photo: AFP / Arif Ali The founder of an influential Pakistani Islamist party created to protest any reforms to the country's ultra-conservative blasphemy laws died Thursday, days after leading demonstrations against France, an official said. Khadim Hussain Rizvi, 54, who had led Tehreek-e-Labbaik Pakistan (TLP) since its creation in 2015, died in hospital in the eastern city of Lahore after "suffering from a fever, " TLP spokesman Pir Ijaz Ashrafi told AFP. Officials did not immediately provide a cause of death for the firebrand cleric. Rizvi in recent days had led anti-France protests in the capital Islamabad calling for the expulsion of the French ambassador after French President Emmanuel Macron defended the right to criticize Islam as part of freedom of speech.
The APTMA estimated the country would need to import 5 million bales of cotton worth $1. 5 billion this year to meet industrial requirements. APTMA Central Chairman Amanullah Kassim said production fell short by 10. 2 million bales this year. Faisal Moiz Khan, president of the North Karachi Association of Trade & Industry (NKATI), told Asia Times that the shortage of cotton and cotton yarn was affecting exports. "If the duties and taxes are not abolished on cotton yarn imports, which is a basic raw material of the textile industry, the export orders would run into difficulty. This will result in the cancellation of export orders, " he said. A Pakistani laborer picks cotton in a field in Qazi Ahmed in the district of Nawabshah. The country has faced a shortage this year. Photo: AFP/Asif Hassan Pakistan manufactures woolen yarn, acrylic yarn, fabrics, shawls, blankets and carpets. In 2009, Pakistan exported $4. 2 billion – 20% of total exports – worth of miscellaneous textiles, worn clothing, $3.
Of all the challenges with geo-engineering - the technological hurdles, the enormous gamble with weather patterns, the dangers of conflict - perhaps the greatest is diplomatic. The past 22 years have seen the world repeatedly fail to agree to cut greenhouse gases to tackle global warming. How much harder would it be to get it to agree on last-ditch measures that many would brand as hare-brained and dangerous? But what if, many decades ahead, there was no alternative?
The European Central Bank duly renewed the pledge made by its former president, Mario Draghi, at the height of the euro crisis in 2012 to do "whatever it takes" to preserve the single currency by making unlimited bond purchases. Markets calmed down knowing that the ECB had Italy's back. But then came Germany's constitutional court, which, in a controversial ruling, questioned the legality of the ECB's bond buying. Cue a Damascene conversion by German Chancellor Angela Merkel, who realised that the ruling risked crushing confidence in the euro and could thus eventually imperil the survival of the EU itself – not the political legacy she had in mind. So, after refusing for years to contemplate fiscal handouts to weaker euro area members, Merkel agreed with French President Emmanuel Macron to let the European Commission raise €500 billion in bonds to distribute as grants – not loans – to economies hardest hit by Covid. It is this plan that forms the heart of the Commission's recovery fund.
These measures have contributed to widespread price hikes in the country, which Khan's government now finds hard to contain.
In the short term, bolstering confidence in the euro bodes well for global financial stability if markets take renewed fright over the coronavirus. And the stronger the economic recovery in Europe, the better the prospects for Asian exporters. In the longer term, the European Commission aims through its bond issuance to build a yield curve of up to 30 years, serving as a AAA benchmark. A deep market of common euro-denominated debt, were it to emerge over time, would greatly enhance the attractiveness of the single currency. International investors in search of safe, liquid assets currently look instinctively to US Treasuries, not to bonds issued separately by the 19 states sharing the euro. Asia can also learn from the efforts Europe is making to reinforce the foundations of its economy and to demonstrate solidarity between stronger and weaker nations. Of course, the European Union is a project for economic and political integration that has no parallel in Asia. The common laws that bind the EU together would be anathema to, say, the Association of South East Asian Nations (Asean), whose members have made a cult out non-intervention in each other's affairs.
5 billion (16. 7%) of clothing and accessories and $3. 3 billion (16. 1%) worth of knitted or crocheted clothing and accessories to different countries. Importing agricultural commodities for domestic requirements is a new trend for Pakistan, an agrarian economy that has been largely self-sufficient in food. Analysts claimed that importing farm products would cost the exchequer more than $3 billion, and half of that would be spent on importing cotton bales. At a time when the country's Central Bank says the real GDP has contracted by 0. 4% in the year 2019-20, and economic growth slipped into negative territory for the first time in the last six decades, importing farm products could deal a blow to a wavering economy. The Pakistan Bureau of Statistics revealed that food prices surged 16. 6% in October over the same month last year, putting Khan's government under pressure to go on a panic-buying spree to bring prices down. "We are going ahead with the imports regardless of rates, " said Pakistan's Food Security Minister Syed Fakhar Imam in August when the country's food inflation was hovering at 13%.