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Leaders call for ‘an economy of trust’, upholding multilateralism at SPIEF 2018

The theme was about upholding multilateral agreements and nations cooperating with each other to achieve common goals

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At Russia’s ‘Second Capital’ of St. Petersburg, leaders from several nations and economic organizations called for an ‘economy of trust’. The theme was aimed at combatting the selfish protectionist measures that have been emanating from various nations in Europe and, most notably, America, the latter of which has been levying tariffs both targeted and global in their scope, as well as economic sanctions, in an attempt to restore the heights of its glory days, when its economy represented half of the world’s GDP, in order to ‘Make America Great Again’.

Xinhua news reports:

ST. PETERSBURG, Russia, May 26 (Xinhua) — The 22nd St. Petersburg International Economic Forum (SPIEF) concluded a plenary session Friday as world leaders gathered here to discuss pressing economic challenges.

Held under the theme “Building a Trust Economy” this year, the forum, often referred to as Russia’s Davos, attracted some 15,000 participants from 70 countries to Russia’s “northern capital” and second largest city.

The leaders noted that there are alarming trends that might compromise economic growth, including rising protectionism and unilateralism, the spiral of sanctions and risks from radical technology transformation.

Recognizing the need for a concerted effort in response, they called on countries to enhance mutual trust, remove trade barriers and boost bilateral and multilateral cooperation to drive forward global growth.

NEED FOR COOPERATION

“Global mistrust is calling into question the prospects of global growth,” Russian President Vladimir Putin told the forum.

In a speech at the plenary session, Chinese Vice President Wang Qishan urged countries to build trust and boost cooperation in order to tackle international challenges and cement a foundation for sustainable global growth.

Noting that no single country can cope with today’s challenges alone, Wang said building an economy featuring equality, mutual trust, mutual benefit, inclusiveness and good faith between enterprises, markets and countries, is an effective way to unleash the potential of global growth.

Also speaking at the forum, French President Emmanuel Macron said trust is being lost in the international arena and “we need to develop a multilateral approach” to solving international issues.

Describing Russia as “an inalienable part of Europe,” he said, “In view of our history… and our common interests, we must work on strengthening mutual trust.”

Echoing Macron’s remarks on cooperation and interdependence among countries, Japanese Prime Minister Shinzo Abe said Russia’s economic growth would benefit its neighbors including Japan while highlighting the importance of cooperation in solving their territorial disputes. He also expressed a willingness to conclude a post-World War II peace treaty with Russia.

In response to Macron’s and Abe’s appeals, Putin said, “A prosperous future cannot be created by working in isolation … I am sure we will certainly be successful if we strengthen mutual trust and the spirit of partnership.”

FIGHTING PROTECTIONISM

As a result of global mistrust, trade protectionism is making a comeback. Discussions at the forum voiced concerns about the trend’s impact on global economic activities and growth.

Nobody wins in a trade war, International Monetary Fund (IMF) chief Christine Lagarde said, noting that trade can lead to higher productivity, lower prices and improved living standards.

“It would be a grave mistake to resort to protectionism and to unilateralism. This would be a self-inflicted wound,” she said.

Putin also expressed the concern that the system of multilateral cooperation built over decades is being “crudely” destroyed while violating rules is becoming a rule.

“Open markets and fair competition are gradually replaced by all kinds of exemptions, restrictions and sanctions… The spiral of sanctions and restrictions is only widening, harming more and more countries and companies,” he said.

In this regard, Chinese vice president Wang called for global unity in resisting protectionism and safeguarding a stable international economic order.

In addition, Wang reaffirmed China’s commitment to its opening-up and welcomed countries to share in the opportunities, including taking part in the Belt and Road Initiative, a new platform for international cooperation.

Speaking of the U.S. trade deficit with China, Lagarde said, “One country should not look at one single deficit with another country but its overall position vis-a-vis the rest of the world. That’s how trade works. It’s a strange complaint (by Washington).” She said major trade disputes between the United States and China should be settled at the World Trade Organization (WTO).

Russian experts praised China’s efforts to promote free trade.

“China is a consistent supporter of an open economy and broad international economic cooperation … China defends free trade and compliance with WTO rules,” said Sergei Uyanayev, deputy director of the Institute of Far Eastern Studies at the Russian Academy of Sciences. “The country considers it unacceptable to build unjustified protectionist barriers.”

UPHOLDING MULTILATERALISM

Opportunities along side challenges stemming from globalization have made it a priority to improve global economic governance. To this end, it is wise to adhere to the multilateral system and develop mutually beneficial cooperation, leaders said at the St. Petersburg forum.

Lagarde listed major global economic problems, including high levels of debt, financial fragility, unfair distribution of the rewards of globalization, threats to the trade system and climate change, urging countries to work together to find solutions.

“All that calls in our view for a renewed multilateralism…It is through those institutions and through no other means, particularly unilateral ones, that things will actually improve,” she said.

In particular, the WTO remains a key multilateral institution and universal venue for resolving disputes.

Putin said that the WTO is not ideal, but abandoning it without replacement means destroying the existing order, including institutions and rules.

“It is very important for us to draft and introduce together a legitimate mechanism of change, which will allow the international community to get rid of obsolete and sometimes inefficient and archaic norms, preserving all the best practices and creating new instruments that meet the requirements of the time,” he said.

While praising Russia as a constructive player in global economic governance, Wang reiterated China’s support for reforms in particular intended to promote the role of emerging markets and developing countries.

In this regard, Yaroslav Lissovolik, chief economist of the Eurasian Development Bank, said China has made important initiatives in recent years, citing “BRICS Plus” and the Belt and Road Initiative.

“China is channeling huge funds for the development of infrastructure in developing countries. So from this perspective, China has done a lot of work that serves to support multilateral trade, openness and liberalization in the world economy,” Lissovolik said.

 The St. Petersburg International Economic Forum is an annual event, held in St. Petersburg. This year, the even featured over 15,000 participants from over 100 countries.

The theme was about upholding multilateral agreements and nations cooperating with each other to achieve common goals with mutual interests and benefits.

That theme runs in diametrical opposition to the position that America has assumed since the accession of Donald J. Trump to its presidency, as his theme of protectionist policies, named “America First” has been advocated and implemented incessantly At the Davos Economic forum, Trump made it clear to the world’s economic leaders that he was moving forward with such policy.

During Trump’s tenure, he has withdrawn American from the TPP, the Paris Climate Accord, the JCPOA Iran nuclear agreement, threatened NAFTA, and has imposed sanctions and levied tariffs on many nations, often over trumped up pretexts.

The SPIEF aims to coordinate nations in economically cooperating with each other to counter this perspective, and to help improve the prosperity of all nations involved, forming a global ‘economy of trust’.

 

 

 

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Macron offers crumbs to protestors in bid to save his globalist agenda (Video)

The Duran Quick Take: Episode 36.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at French President Macron’s pathetic display of leadership as he offers protestors little in the way of concessions while at the same time promising to crack down hard on any and all citizens who resort to violence.

Meanwhile France’s economy is set for a deep recession as French output and production grinds to a halt.

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Via Zerohedge


As if Brussels didn’t have its hands full already with Italy and the UK, the European Union will soon be forced to rationalize why one of its favorite core members is allowed to pursue populist measures to blow out its budget deficit to ease domestic unrest while another is threatened with fines potentially amounting to billions of euros.

When blaming Russia failed to quell the widespread anger elicited by his policies, French President Emmanuel Macron tried to appease the increasingly violent “yellow vests” protesters who have sacked his capital city by offering massive tax cuts that could blow the French budget out beyond the 3% budget threshold outlined in the bloc’s fiscal rules.

Given the concessions recently offered by Italy’s populists, Macron’s couldn’t have picked a worse time to challenge the bloc’s fiscal conventions. As Bloomberg pointed out, these rules will almost certainly set the Continent’s second largest economy on a collision course with Brussels. To be clear, Macron’s offered cuts come with a price tag of about €11 billion according to Les Echos, and will leave the country with a budget gap of 3.5% of GDP in 2019, with one government official said the deficit may be higher than 3.6%.

By comparison, Italy’s initial projections put its deficit target at 2.4%, a number which Europe has repeatedly refused to consider.

Macron’s promises of fiscal stimulus – which come on top of his government’s decision to delay the planned gas-tax hikes that helped inspire the protests – were part of a broader ‘mea culpa’ offered by Macron in a speech Monday night, where he also planned to hike France’s minimum wage.

Of course, when Brussels inevitably objects, perhaps Macron could just show them this video of French police tossing a wheelchair-bound protester to the ground.

Already, the Italians are complaining.  Speaking on Tuesday, Italian cabinet undersecretary Giancarlo Giorgetti said Italy hasn’t breached the EU deficit limit. “I repeat that from the Italian government there is a reasonable approach, if there is one also from the EU a solution will be found.”

“France has several times breached the 3% deficit. Italy hasn’t done it. They are different situations. There are many indicators to assess.”

Still, as one Guardian columnist pointed out in an op-ed published Tuesday morning, the fact that the gilets jaunes (yellow vest) organizers managed to pressure Macron to cave and grant concessions after just 4 weeks of protests will only embolden them to push for even more radical demands: The collapse of the government of the supremely unpopular Macron.

Then again, with Brussels now facing certain accusations of hypocrisy, the fact that Macron was pressured into the exact same populist measures for which Italy has been slammed, the French fiasco raises the odds that Rome can pass any deficit measure it wants with the EU now forced to quietly look away even as it jawbones all the way from the bank (i.e., the German taxpayers).

“Macron’s spending will encourage Salvini and Di Maio,” said Giovanni Orsina, head of the School of Government at Rome’s Luiss-Guido Carli University. “Macron was supposed to be the spearhead of pro-European forces, if he himself is forced to challenge EU rules, Salvini and Di Maio will jump on that to push their contention that those rules are wrong.”

While we look forward to how Brussels will square this circle, markets are less excited.

Exhausted from lurching from one extreme to another following conflicting headlines, traders are already asking if “France is the new Italy.” The reason: the French OAT curve has bear steepened this morning with 10Y yields rising as much as ~6bp, with the Bund/OAT spread reaching the widest since May 2017 and the French presidential election. Though well below the peaks of last year, further widening would push the gap into levels reserved for heightened political risk.

As Bloomberg macro analyst Michael Read notes this morning, it’s hard to see a specific near-term trigger blowing out the Bund/OAT spread but the trend looks likely to slowly drift higher.

While Macron has to fight on both domestic and European fronts, he’ll need to keep peace at home to stay on top. Remember that we saw the 10Y spread widen to ~80bps around the May ’17 elections as concerns of a move toward the political fringe played out in the markets, and the French President’s popularity ratings already look far from rosy.

And just like that France may have solved the Italian crisis.

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Watch: Democrat Chuck Schumer shows his East Coast elitism on live TV

Amazing moment in which the President exhibits “transparency in government” and shows the world who the Democrat leaders really are.

Seraphim Hanisch

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One of the reasons Donald Trump was elected to the Presidency was because of his pugnacious, “in your face” character he presented – and promised TO present – against Democrat policy decisions and “stupid government” in general.

One of the reasons President Donald Trump is reviled is because of his pugnacious, “in your face” character he presented – and promised TO present – in the American political scene.

In other words, there are two reactions to the same characteristic. On Tuesday, the President did something that probably cheered and delighted a great many Americans who witnessed this.

The Democrats have been unanimous in taking any chance to roast the President, or to call for his impeachment, or to incite violence against him. But Tuesday was President Trump’s turn. He invited the two Democrat leaders, presumptive incoming House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, and then, he turned the cameras on:

As Tucker Carlson notes, the body language from Schumer was fury. The old (something)-eating grin covered up humiliation, embarrassment and probably no small amount of fear, as this whole incident was filmed and broadcast openly and transparently to the American public. Nancy Pelosi was similarly agitated, and she expressed it later after this humiliation on camera, saying, “It’s like a manhood thing for him… As if manhood could ever be associated with him.”

She didn’t stop there. According to a report from the New York Daily News, the Queen Bee took the rhetoric a step below even her sense of dignity:

Pelosi stressed she made clear to Trump there isn’t enough support in Congress for a wall and speculated the President is refusing to back down because he’s scared to run away with his tail between his legs.

“I was trying to be the mom. I can’t explain it to you. It was so wild,” Pelosi said of the Oval Office meet, which was also attended by Vice President Pence and Senate Minority Leader Chuck Schumer (D-N.Y.). “It goes to show you: you get into a tinkle contest with a skunk, you get tinkle all over you.”

This represented the first salvo in a major spin-job for the ultra-liberal San Francisco Democrat. The rhetoric spun by Mrs. Pelosi and Chuck Schumer was desperate as they tried to deflect their humiliation and place it back on the President:

With reporters still present, Trump boasted during the Oval meeting he would be “proud” to shutdown the government if Congress doesn’t earmark cash for his wall before a Dec. 21 spending deadline.

Pelosi told Democrats that Trump’s boisterousness will be beneficial for them.

“The fact is we did get him to say, to fully own that the shutdown was his,” Pelosi said. “That was an accomplishment.”

The press tried to characterize this as a “Trump Tantrum”, saying things like this lede:

While “discussing” a budgetary agreement for the government, President Donald Trump crossed his arms and declared: “we will shut down the government if there is no wall.”

While the Democrats and the mainstream media in the US are sure to largely buy these interpretations of the event, the fact that this matter was televised live shows that the matter was entirely different, and this will be discomfiting to all but those Democrats and Trump-dislikers that will not look at reality.

There appears to be a twofold accomplishment for the President in this confrontation:

  1. The President revealed to his support base the real nature of the conversation with the Democrat leadership, because anyone watching this broadcast (and later, video clip) saw it unedited with their own eyes. They witnessed the pettiness of both Democrats and they witnessed a President completely comfortable and confident about the situation.
  2. President Trump probably made many of his supporters cheer with the commitment to shut down the government if he doesn’t get his border wall funding. This cheering is for both the strength shown about getting the wall finished and the promise to shut the government down, and further, Mr. Trump’s assertion that he would be “proud” to shut the government down, taking complete ownership willingly, reflects a sentiment that many of his supporters share.

The usual pattern is for the media, Democrats and even some Republicans to create a “scare” narrative about government shutdowns, about how doing this is a sure-fire path to chaos and suffering for the United States.

But the educated understanding of how shutdowns work reveals something completely different. Vital services never close. However, National Parks can close partly or completely, and some non-essential government agencies are shuttered. While this is an inconvenience for the employees furloughed during the shutdown, they eventually are re-compensated for the time lost, and are likely to receive help during the shutdown period if they need it. The impact on the nation is minimal, aside from the fact that the government stops spending money at the same frenetic pace as usual.

President Trump’s expression of willingness to do this action and his singling out of the Dem leadership gives the Democrats a real problem. Now the entire country sees their nature. As President Trump is a populist, this visceral display of Democrat opposition and pettiness will make at least some impact on the population, even that group of people who are not Trump fans.

The media reaction and that of the Democrats here show, amazingly, that after three years-plus of Donald Trump being a thorn in their side, they still do not understand how he works, and they also cannot match it against their expected “norms” of establishment behavior.

This may be a brilliant masterstroke, and it also may be followed up by more. The President relishes head-to-head conflict. The reactions of these congress members showed who they really are.

Let the games begin.

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French opposition rejects Macron’s concessions to Yellow Vests, some demand ‘citizen revolution’

Mélenchon: “I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.”

RT

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Via RT…


Macron’s concessions to the Yellow Vests has failed to appease protesters and opposition politicians, such as Jean-Luc Mélenchon, who called for “citizen’s revolution” to continue until a fair distribution of wealth is achieved.

Immediately after French President Macron declared a “social and economic state of emergency” in response to large-scale protests by members of the Yellow Vest movement, promising a range of concessions to address their grievances, left-wing opposition politician Mélenchon called on the grassroots campaign to continue their revolution next Saturday.

I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.

Macron’s promise of a €100 minimum wage increase, tax-free overtime pay and end-of-year bonuses, Mélenchon argued, will not affect any “considerable part” of the French population. Yet the leader of La France Insoumise stressed that the “decision” to rise up rests with “those who are in action.”

“We expect a real redistribution of wealth,” Benoît Hamon, a former presidential candidate and the founder of the Mouvement Génération, told BFM TV, accusing Macron’s package of measures that benefit the rich.

The Socialist Party’s first secretary, Olivier Faure, also slammed Macron’s financial concessions to struggling workers, noting that his general “course has not changed.”

Although welcoming certain tax measures, Marine Le Pen, president of the National Rally (previously National Front), accused the president’s “model” of governance based on “wild globalization, financialization of the economy, unfair competition,” of failing to address the social and cultural consequences of the Yellow Vest movement.

Macron’s speech was a “great comedy,”according to Debout la France chairman, Nicolas Dupont-Aignan, who accused the French President of “hypocrisy.”

Yet many found Melanchon’s calls to rise up against the government unreasonable, accusing the 67-year-old opposition politician of being an “opportunist” and “populist,” who is trying to hijack the social protest movement for his own gain.

Furthermore, some 54 percent of French believe the Yellow Vests achieved their goals and want rallies to stop, OpinionWay survey showed. While half of the survey respondents considered Macron’s anti-crisis measures unconvincing, another 49 percent found the president to be successful in addressing the demands of the protesters. Some 68 percent of those polled following Macron’s speech on Monday especially welcomed the increase in the minimum wage, while 78 percent favored tax cuts.

The Yellow Vest protests against pension cuts and fuel tax hikes last month were organized and kept strong via social media, without help from France’s powerful labor unions or official political parties. Some noted that such a mass mobilization of all levels of society managed to achieve unprecedented concessions from the government, which the unions failed to negotiate over the last three decades.

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