even tougher winter next year as natural gas stocks are used up and as new supplies to replace Russian gas, including increased shipments from the United States or Qatar, are slow to come online, the International Energy Agency said in its annual World Energy Outlook, released last week.

Europe’s activity appears to be accelerating a global transition toward cleaner technologies, the I.E.A. added, as countries respond to Russia’s invasion of Ukraine by embracing hydrogen fuels, electric vehicles, heat pumps and other green energies.

But in the short term, countries will be burning more fossil fuels in response to the natural gas shortages.

gas fields in Groningen, which had been slated to be sealed because of earthquakes triggered by the extraction of the fuel.

Eleven countries, including Germany, Finland and Estonia, are now building or expanding a total of 18 offshore terminals to process liquid gas shipped in from other countries. Other projects in Latvia and Lithuania are under consideration.

Nuclear power is winning new support in countries that had previously decided to abandon it, including Germany and Belgium. Finland is planning to extend the lifetime of one reactor, while Poland and Romania plan to build new nuclear power plants.

European Commission blueprint, are voluntary and rely on buy-ins from individuals and businesses whose utility bills may be subsidized by their governments.

Energy use dropped in September in several countries, although it is hard to know for sure if the cause was balmy weather, high prices or voluntary conservation efforts inspired by a sense of civic duty. But there are signs that businesses, organizations and the public are responding. In Sweden, for example, the Lund diocese said it planned to partially or fully close 150 out of 540 churches this winter to conserve energy.

Germany and France have issued sweeping guidance, which includes lowering heating in all homes, businesses and public buildings, using appliances at off-peak hours and unplugging electronic devices when not in use.

Denmark wants households to shun dryers and use clotheslines. Slovakia is urging citizens to use microwaves instead of stoves and brush their teeth with a single glass of water.

website. “Short showers,” wrote one homeowner; another announced: “18 solar panels coming to the roof in October.”

“In the coming winter, efforts to save electricity and schedule the consumption of electricity may be the key to avoiding electricity shortages,” Fingrad, the main grid operator, said.

Businesses are being asked to do even more, and most governments have set targets for retailers, manufacturers and offices to find ways to ratchet down their energy use by at least 10 percent in the coming months.

Governments, themselves huge users of energy, are reducing heating, curbing streetlight use and closing municipal swimming pools. In France, where the state operates a third of all buildings, the government plans to cut energy use by two terawatt-hours, the amount used by a midsize city.

Whether the campaigns succeed is far from clear, said Daniel Gros, director of the Centre for European Policy Studies, a European think tank. Because the recommendations are voluntary, there may be little incentive for people to follow suit — especially if governments are subsidizing energy bills.

In countries like Germany, where the government aims to spend up to €200 billion to help households and businesses offset rising energy prices starting next year, skyrocketing gas prices are hitting consumers now. “That is useful in getting them to lower their energy use,” he said. But when countries fund a large part of the bill, “there is zero incentive to save on energy,” he said.

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Europe Looks at Italy’s Giorgia Meloni With Caution and Trepidation

BRUSSELS — The victory in Italian elections of the far-right and Euroskeptic leader Giorgia Meloni, who once wanted to ditch the euro currency, sent a tremor on Monday through a European establishment worried about a new right-wing shift in Europe.

European Union leaders are now watching her coalition’s comfortable victory in Italy, one of its founding members, with caution and some trepidation, despite reassurances from Ms. Meloni, who would be the first far-right nationalist to govern Italy since Mussolini, that she has moderated her views.

But it is hard for them to escape a degree of dread. Even given the bloc’s successes in recent years to agree on a groundbreaking pandemic recovery fund and to confront Russia’s aggression in Ukraine, the appeal of nationalists and populists remains strong — and is spreading, a potential threat to European ideals and cohesion.

said in a Twitter message: “In these difficult times, we need more than ever friends who share a common vision and approach to Europe’s challenges.”

Europe’s concerns are less about policy toward Ukraine. Ms. Meloni has said she supports NATO and Ukraine and has no great warmth for President Vladimir V. Putin of Russia, as her junior coalition partners, Matteo Salvini and Silvio Berlusconi, have evinced.

Still, Mr. Berlusconi said last week that Mr. Putin “was pushed by the Russian population, by his party, by his ministers to invent this special operation.” The plan, he said, was for Russian troops to enter “in a week to replace Zelensky’s government with a government of decent people.”

Italian popular opinion is traditionally sympathetic toward Moscow, with about a third of seats in the new Parliament going to parties with an ambiguous stance on Russia, sanctions, and military aid to Ukraine. As the war proceeds, with all its domestic economic costs, Ms. Meloni may take a less firm view than Mr. Draghi has.

Mr. Kupchan expects “the balance of power in Europe will tilt more toward diplomacy and a bit less toward continuing the fight.” That is a view more popular with the populist right than with parties in the mainstream, but it has prominent adherents in Germany and France, too.

“These elections are another sign that all is not well with mainstream parties,” said Mark Leonard, director of the European Council on Foreign Relations, and spell a complicated period for the European Union.

Even the victory a year ago of Olaf Scholz in Germany, a man of the center left, was ensured by the collapse of the center-right Christian Democrats, who had their worst showing in their history, while in April, France’s long-dominant center-right Republicans fell to under 5 percent of the vote.

“People in Brussels are extremely anxious about Meloni becoming an E.U. prime minister,” Mr. Leonard said. “They’ve seen how disruptive Orban can be from a small country with no systemic role in the E.U. Meloni says she won’t immediately upend the consensus on Ukraine, but she could be a force for a much more virulent form of Euroskepticism in council meetings.”

One or two troublemakers can do a lot of a damage to E.U. decision-making, he said, “but if it’s five or six,” it becomes very hard to obtain coherence or consensus.

When the leftist, populist Five Star Movement led Italy from 2018 to early 2021, before Mr. Draghi, it created major fights inside Brussels on immigration and asylum issues. Ms. Meloni is expected to concentrate on topics like immigration, identity issues (she despises what she calls “woke ideology”), and future E.U. rules covering debt and fiscal discipline, to replace the outdated growth and stability pact.

But analysts think she will pick her fights carefully, given Italy’s debt mountain — over 150 percent of gross domestic product — and the large sums that Brussels has promised Rome as part of the Covid recovery fund. For this year, the amount is 19 billion euros, or about $18.4 billion, nearly 1 percent of Italy’s G.D.P., said Mujtaba Rahman, Europe director for the Eurasia Group, with a total over the next few years of some 10.5 percent of G.D.P.

“Draghi has already implemented tough reforms to satisfy Brussels, so there is no reason for her to come in and mess it up and agitate the market,” Mr. Rahman said. But for the future, there are worries that she will push for an expansionist budget, looser fiscal rules and thereby make the more frugal countries of northern Europe less willing to compromise.

For Mr. Rahman, the bigger risk for Europe is the loss of influence Italy exercised under Mr. Draghi. He and President Emmanuel Macron of France, “were beginning to create an alternative axis to compete with the vacuum of leadership now in Germany, and all that will be lost,” Mr. Rahman said. Italy will go from a country that leads to one that Europe watches anxiously, he said.

There was a sign of that anxiety just before the election, when Ursula von der Leyen, the president of the European Commission, warned that Brussels had “the tools” to deal with Italy if things went in a “difficult direction.” It was seen as a hint that the European Commission could cut funds to Italy if it were deemed to be violating the bloc’s democratic standards.

Mr. Salvini, seeing an opportunity, immediately responded: “What is this, a threat? This is shameful arrogance,” and asked Ms. von der Leyen to “respect the free, democratic and sovereign vote of the Italian people” and resist “institutional bullying.”

Instead, Mr. Stefanini, the former diplomat, urged Brussels to be patient and to engage with Ms. Meloni. “The new government should be judged on facts, on what it does when in power,” he said. “The real risk is that by exaggerated overreactions the E.U. makes legitimate concerns self-fulfilling prophecies.

“If she’s made to feel rejected, she’ll be pushed into a corner — where she’ll find Orban and other soulmates waiting for her, and she’ll team up with them,” he continued. “But if she’s greeted as a legitimate leader, democratically elected, it will be possible for the E.U. to do business with her.”

Luuk van Middelaar, a historian of the bloc, also urges caution. European leaders know two things about Italian prime ministers, he said. First, “they are not very powerful at home, and two, they tend not to last very long” — since World War II, an average of about 18 months.

“So they will wait and see and not be blown away,” Mr. van Middelaar said. If she lasts longer, however, she could energize other far-right Euroskeptics in other big countries like France, he said, “and that would make a real difference.”

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With Brittney Griner In Jail, WNBA Players Skip Russia In Offseason

By Associated Press
September 20, 2022

WNBA players often compete in Russia because of the high salaries, but they are skipping out due to Brittney Griner’s imprisonment.

Brittney Griner’s highly publicized legal woes in Russia and the country’s invasion of Ukraine have the top WNBA players opting to take their talents elsewhere this offseason.

For the past few decades, Russia has been the preferred offseason destination for WNBA players to compete because of the high salaries that can exceed $1 million and the resources and amenities teams offered them.

That all has come to an abrupt end.

“Honestly my time in Russia has been wonderful, but especially with BG still wrongfully detained there, nobody’s going to go there until she’s home,” said Breanna Stewart, a Griner teammate on the Russian team that paid the duo millions. “I think that, you know, now, people want to go overseas and if the money is not much different, they want to be in a better place.”

Griner was arrested in February, then detained and later convicted on drug possession charges amid Russia’s invasion of Ukraine. Griner was sentenced last month to nine years in prison.

Now, Stewart and other WNBA All-Stars, including Jonquel Jones and Courtney Vandersloot — who also have made millions of dollars playing in Russia — are going elsewhere this winter. All three played for Ekaterinburg, the same Russian team as Griner. That club won five EuroLeague titles in the past eight seasons and has been dominant for nearly two decades with former greats DeLisha Milton Jones and Diana Taurasi playing there.

Nearly a dozen WNBA players competed in Russia last winter and none of them are heading back this year.

After the World Cup tournament, Stewart is going to Turkey to play for Fenerbahçe. Top players can make a few hundred thousand dollars playing in Turkey, much less than their Russian salaries. Playing in Turkey also allows Stewart to be closer to her wife’s family in Spain.

“You want to have a better lifestyle, a better off-the-court experience, and just continue to appreciate other countries,” Stewart said.

Like Stewart, Vandersloot also isn’t headed back to Russia, choosing to play in Hungary where she obtained citizenship in 2016.

“I am Hungarian. I thought it would be special since I haven’t played there since I got the citizenship,” Vandersloot said.

The 33-year-old guard said a lot would have to change before she’d ever consider going back to Russia to play even though she has many fond memories of the Russian people.

“The thing about it is, we were treated so well by our club and made such strong relationships with those people, I would never close the door on that,” she said. “The whole situation with BG makes it really hard to think that it’s safe for anyone to go back there right now.”

Jones will be joining Stewart in Turkey, playing for Mersin. The 6-foot-6 Jones said she would consider going back to Russia if things change politically and Griner was back in the U.S.

The Griner situation also is weighing heavily on the minds of young WNBA players.

Rhyne Howard, the 2022 WNBA Rookie of the Year, is playing in Italy this winter — her first overseas experience. She said was careful when deciding where she wanted to play.

“Everyone’s going to be a bit cautious seeing as this situation is happening,” she said.

It’s not just the American players who are no longer going to Russia. Chicago Sky forward Emma Meesseman, who stars for the Belgium national team, had played in Russia with Stewart, Jones and Vandersloot. She also is headed to Turkey this offseason.

The WNBA has also been trying to make staying home in the offseason a better option for players. Commissioner Cathy Engelbert said at the WNBA Finals that top players could make up to $700,000 this year between base salary, marketing agreements and award bonuses. While only a select few players could reach that amount, roughly a dozen have decided to take league marketing agreements this offseason.

Additional reporting by The Associated Press.

Source: newsy.com

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Russia’s Unfounded Claims of Secret U.S. Bioweapons Linger On and On

The United States secretly manufactured biological weapons in Ukraine. It trained birds to carry pathogens into Russia. It created Covid-19. It operated laboratories in Nigeria that engineered this year’s outbreak of monkeypox.

Of the many falsehoods that the Kremlin has spread since the war in Ukraine began more than six months ago, some of the most outlandish and yet enduring have been those accusing the United States of operating clandestine biological research programs to wreak havoc around the globe.

The United States and others have dismissed the accusations as preposterous, and Russia has offered no proof. Yet the claims continue to circulate. Backed at times by China’s diplomats and state media, they have ebbed and flowed in international news reports, fueling conspiracy theories that linger online.

international treaty that since 1975 has barred the development and use of weapons made of biological toxins or pathogens, gives member nations the authority to request a formal hearing of violations, and Russia has invoked the first one in a quarter-century.

the origins of Covid-19 has.

“The message is constantly about these labs, and that will erode confidence in that infrastructure and the work that’s being performed,” said Filippa Lentzos, an expert on biological threats and security at King’s College London. “And it will significantly undermine global biosafety and biosecurity efforts, so it does have consequences.”

Russia added the outbreak of monkeypox to its list of American transgressions in April. Gen. Igor A. Kirillov, the head of the Russian Army’s radiological, chemical and biological defense force, insinuated that the United States had started the latest outbreak because it supported four research laboratories in Nigeria where the epidemic began to spread.

In the months after the general’s comments, there were nearly 4,000 articles in Russian media, many of them shared on Twitter, Facebook and other social media platforms, according to research conducted by Zignal Labs for The New York Times.

For evidence of a conspiracy, some of the Russian reports pointed to a simulation in 2021 at the Munich Security Conference, an annual gathering of defense officials and experts from around the world. The simulation, intended to test how well countries would contain a new pandemic, posited a hypothetical monkeypox outbreak that began in a fictional country called Brinia and caused 270 million deaths.

a statement in May trying to tamp down any misconception.

routinely amplifies Russian claims about the war with Ukraine and about secret biological weapons research, as part of its own information battle with the United States that began with the debate over the spread of Covid-19.

China’s heavily censored internet, which aggressively stifles unwelcome political opinions, has also freely circulated conspiracy theories about a possible American role in the spread of monkeypox, as Bloomberg reported.

Russia’s efforts to push the claims about biological weapons come from an old Russia propaganda playbook, adapted to the age of social media.

Researchers at the RAND Corporation called the Russian strategy a “fire hose of falsehood,” inundating the public with huge numbers of claims that are designed to deflect attention and cause confusion and distrust as much as to provide an alternative point of view.

died on Tuesday, that it would hurt newly warming relations with the West.

Russia’s propaganda model today has been adapted to take advantage of “technology and available media in ways that would have been inconceivable during the Cold War,” according to the RAND study.

Despite “a shameless willingness to disseminate partial truths or outright fictions” and a disregard of consistency, the strategy can often be persuasive to some, especially those who have preconceived biases, one of the authors, Christopher Paul, said in an interview.

“There are still people who believe the C.I.A. caused AIDS in Africa, even though that idea has been thoroughly debunked,” Mr. Paul said. “Not many, but some.”

Like many disinformation campaigns, Russia’s accusations on occasion have a passing relationship to facts.

Even before the war in Ukraine, Russia raised alarms about U.S. efforts to establish closer defense and research ties with several of Russia’s neighbors, including other former republics of the Soviet Union.

invoked a special session was in 1997, when Cuba accused the United States of spraying a plume of insects over the country’s crops, causing a devastating infestation.

The proceedings were not public, but several nations later submitted written observations about Cuba’s claims and the United States’ rebuttal. Only North Korea supported Cuba’s claim. Eight countries — Australia, Canada, Denmark, Germany, Hungary, Japan, the Netherlands and New Zealand — concluded there was no link. China and Vietnam said it was impossible to determine. (Russia submitted no response.)

“There’s a big silent majority that just wants to sit on the fence,” Dr. Lentzos said. “They don’t really want to take a side because it could hurt their interests either way. And so the big question is not ‘Do these guys believe it, or not?’ It’s to what extent are they motivated to act on it and speak out.”

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Analysis: East Europe’s party is over as double-digit inflation bites

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ESZTERGOM, Hungary, Aug 5 (Reuters) – In the weeks that followed Russia’s invasion of Ukraine, western Europe’s big economies began to falter. But further east it was still boom-time thanks to double-digit wage hikes and generous state handouts in some countries.

Not any more.

A sharp slowdown in retail sales and plunging confidence indicators show that the cost of living crisis has caught up with Europe’s eastern wing, where people now face a harsh reality check as stubborn double-digit inflation erodes their incomes while food price rises top 15%-22% and energy costs soar.

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As household consumption takes a hit, analysts are downgrading their GDP forecasts and the risk of a Europe-wide recession looms.

Families have started to tighten their belts. Poles are taking shorter holidays, Czechs are saving on restaurant bills while some seek second jobs, and in Hungary – where food inflation alone was an annual 22.1% in June – people are cutting down on grocery bills and purchases of consumer durables as a slide in the forint currency pushes up import prices.

“I went into the bakery one day and a loaf of bread cost 550 forints. I go in the next day and it costs 650. For God’s sake!”, exclaimed Lajos, a 73-year-old man shopping at a market in the northern city of Esztergom on the Danube river.

Standing by his bicycle, grey-bearded Lajos, who did not give his family name, said the surge in food prices had consumed some of his monthly pension and he would not be able to pay higher utility bills, which will rise after the government last month scrapped price caps for what it called higher-usage households.

So he is making his own plans.

“I can heat with gas but also wood … as I have a tile-stove. So with my wife we will move into one room, heat up the stove, put on some warm sweaters and watch TV like that.”

Across Hungary, retail sales growth (HURETY=ECI) slowed to an annual 4.5% in June from 10.9% in May, with furniture and electronic goods sales down by 4.3%, suggesting the impact of huge tax breaks and fiscal transfers from Prime Minister Viktor Orban’s government before April’s elections has now faded.

Polish retail sales growth also slowed to an annual 3.2% in June from 8.2% in May, while Czech adjusted retail sales excluding cars and motorcycles dropped by 6.0% year-on-year in June after a fall of 6.6% in May, data showed on Friday.

“Households have reacted to the rising cost of living in a meaningful way, and the consumption of things has started to slow,” said Peter Virovacz, an analyst at ING in Budapest.

According to a survey by the National Bank of Hungary on Friday, commercial banks expect demand for loans to decline and credit conditions to tighten in the second half.

BELT-TIGHTENING

The slowdown in domestic demand, rising interest rates, government spending cuts and companies’ rising costs look set to dampen economic growth in Central Europe in the second half of this year and slow them down sharply in 2023.

Citigroup said Hungary’s economy could grow by close to 5% in 2022 but that there were downside risks to its 1% forecast for next year.

“The risk of prolonged high energy prices keeping inflation in double-digit territory even in 2023 and our updated Euro Area in-house forecasts point towards downside risks,” it said.

The Hungarian central bank still projects 2.0%-3.0% growth for 2023, and it will release new forecasts in September.

The Polish economy is expected to grow by 3.8% this year and 3.2% in 2023, according to government projections.

The Czech central bank, the first to call a halt to its rate-hike cycle on Thursday, predicts recession at the turn of the year as it sees the economy contracting 0.4% in the fourth quarter of 2022 and 1% in the first quarter of 2023.

“Our base scenario includes a mild recession – a technical recession – we have two quarters in a row with a quarterly decline there… That would be a healthy recession, which also allows for cutting inflation,” Governor Ales Michl said.

While the summer is still expected to see a boom in the tourism sector, Poles have started to save on trips according to travel website Noclegi.pl.

“We can see that what characterizes this season is the shortening of trips, on average by one day, and postponing the booking until the last moment,” said Natalia Jaworska, an expert at Noclegi.pl. Poles have also begun to save on food.

Data from various restaurant payment services, like Sodexo, have shown falling spending in restaurants in the Czech Republic as well. The STEM polling agency’s latest survey in June found 80% of Czech households were cutting back or limiting their purchases because of fast-rising energy bills.

Czech consumer confidence hit a new low in July, according to the statistics office’s monthly survey, while a survey by think-tank GKI showed the Hungarian consumer confidence index in July plunged to its lowest level since April 2020 during the first wave of the COVID-19 pandemic.

Martin Hulovec, a 43-year-old Czech film producer, said he was not worried about his income right now, but he was less optimistic about the future.

“The hard times have not arrived yet for me to deal with it immediately… but it will come,” Hulovec said.

“I will certainly seek more energy savings… I will definitely not buy new stuff for the kids, clothing or sport equipment. You can find that secondhand for half the price.”

And he too will be switching on the heating less when winter comes.

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Reporting and writing by Krisztina Than, Addditional repoting by Jason Hovet and Robert Muller in Prague, and Anna Wlodarczak-Semczuk in Warsaw, Editing by Hugh Lawson

Our Standards: The Thomson Reuters Trust Principles.

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EXCLUSIVE EU found evidence employee phones compromised with spyware -letter

July 27 (Reuters) – The European Union found evidence that smartphones used by some of its staff were compromised by an Israeli company’s spy software, the bloc’s top justice official said in a letter seen by Reuters.

In a July 25 letter sent to European lawmaker Sophie in ‘t Veld, EU Justice Commissioner Didier Reynders said iPhone maker Apple had told him in 2021 that his iPhone had possibly been hacked using Pegasus, a tool developed and sold to government clients by Israeli surveillance firm NSO Group.

The warning from Apple triggered the inspection of Reynders’ personal and professional devices as well as other phones used by European Commission employees, the letter said.

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Though the investigation did not find conclusive proof that Reynders’ or EU staff phones were hacked, investigators discovered “indicators of compromise” – a term used by security researchers to describe that evidence exists showing a hack occurred.

Reynders’ letter did not provide further detail and he said “it is impossible to attribute these indicators to a specific perpetrator with full certainty.” It added that the investigation was still active.

Messages left with Reynders, the European Commission, and Reynders’ spokesman David Marechal were not immediately returned.

An NSO spokeswoman said the firm would willingly cooperate with an EU investigation.

“Our assistance is even more crucial, as there is no concrete proof so far that a breach occurred,” the spokeswoman said in a statement to Reuters. “Any illegal use by a customer targeting activists, journalists, etc., is considered a serious misuse.”

NSO Group is being sued by Apple Inc (AAPL.O) for violating its user terms and services agreement.

LAWMAKERS’ QUESTIONS

Reuters first reported in April that the European Union was investigating whether phones used by Reynders and other senior European officials had been hacked using software designed in Israel. Reynders and the European Commission declined to comment on the report at the time.

Reynders’ acknowledgement in the letter of hacking activity was made in response to inquiries from European lawmakers, who earlier this year formed a committee to investigate the use of surveillance software in Europe.

Last week the committee announced that its investigation found 14 EU member states had purchased NSO technology in the past.

Reynders’ letter – which was shared with Reuters by in ‘t Veld, the committee’s rapporteur – said officials in Hungary, Poland and Spain had been or were in the process of being questioned about their use of Pegasus.

In ‘t Veld said it was imperative to find out who targeted the EU Commission, suggesting it would be especially scandalous if it were found that an EU member state was responsible.

The European Commission also raised the issue with Israeli authorities, asking them to take steps to “prevent the misuse of their products in the EU,” the letter said.

A spokesperson for the Israeli Ministry of Defense did not immediately respond to a request for comment.

Apple’s alerts, sent late last year, told targeted users that a hacking tool, dubbed ForcedEntry, may have been used against their devices to download spyware. Apple said in a lawsuit that ForcedEntry had been the work of NSO Group. Reuters also previously reported that another, smaller Israeli firm named QuaDream had developed a nearly identical tool.

In November, the administration of U.S. President Joe Biden gave NSO Group a designation that makes it harder for U.S. companies to do business with them, after determining that its phone-hacking technology had been used by foreign governments to “maliciously target” political dissidents around the world.

NSO, which has kept its client list confidential, has said that it sells its products only to “vetted and legitimate” government clients.

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Reporting by Raphael Satter and Christopher Bing in Washington; editing by Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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Gaps in Arms Supplies to Ukraine Point to Countries’ Divergent Strategies

His words infuriated the Ukrainians as well as the Central Europeans, who want Russia weakened and Mr. Putin humiliated.

For Pierre Vimont, a former French ambassador to Washington and former senior E.U. official, European countries are divided into three rough camps.

There are those like Britain, Poland and the Baltics looking to isolate Mr. Putin and the Russians, too, for being complicit in the war; those like Belgium, the Czech Republic and the Netherlands revisiting the idea of Cold War containment, talking of constraints; and those countries, like France, Germany, Hungary and Italy, “who hope at some point for an opportunity to launch a new dialogue with Russia, not immediately, but to be ready.”

The divisions will remain, Mr. Vimont said. “There is not much appetite for a Russian strategy.”

If there is to be one, Washington must lead it, but seems as confused as everyone else. “No one has a real idea of how to handle this situation now,” Mr. Speck said. Unlike in 2014, when Germany organized the Minsk process to stop the war then, he said, “there is no one driving a diplomatic process.”

As the war settles into a protracted artillery battle with little terrain won or lost, the threat that Russia will attack Western European countries is rapidly fading, said Claudia Major, a defense expert with the German Institute for International and Security Affairs.

That is leading to a certain complacency, coupled with the growing economic impact of sanctions on higher inflation and lower growth.

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As Russia Chokes Ukraine’s Grain Exports, Romania Tries to Fill In

Stopping at the edge of a vast field of barley on his farm in Prundu, 30 miles outside Romania’s capital city of Bucharest, Catalin Corbea pinched off a spiky flowered head from a stalk, rolled it between his hands, and then popped a seed in his mouth and bit down.

“Another 10 days to two weeks,” he said, explaining how much time was needed before the crop was ready for harvest.

Mr. Corbea, a farmer for nearly three decades, has rarely been through a season like this one. The Russians’ bloody creep into Ukraine, a breadbasket for the world, has caused an upheaval in global grain markets. Coastal blockades have trapped millions of tons of wheat and corn inside Ukraine. With famine stalking Africa, the Middle East and elsewhere in Asia, a frenetic scramble for new suppliers and alternate shipping routes is underway.

barge that had sunk in World War II.

Rain was not as plentiful in Prundu as Mr. Corbea would have liked it to be, but the timing was opportune when it did come. He bent down and picked up a fistful of dark, moist soil and caressed it. “This is perfect land,” he said.

67.5 million tons of cargo, more than a third of it grain. Now, with Odesa’s port closed off, some Ukrainian exports are making their way through Constanta’s complex.

Railway cars, stamped “Cereale” on their sides, spilled Ukrainian corn onto underground conveyor belts, sending up billowing dust clouds last week at the terminal operated by the American food giant Cargill. At a quay operated by COFCO, the largest food and agricultural processor in China, grain was being loaded onto a cargo ship from one of the enormous silos that lined its docks. At COFCO’s entry gate, trucks that displayed Ukraine’s distinctive blue-and-yellow-striped flag on their license plates waited for their cargoes of grain to be inspected before unloading.

During a visit to Kyiv last week, Romania’s president, Klaus Iohannis, said that since the beginning of the invasion more than a million tons of Ukrainian grain had passed through Constanta to locations around the world.

But logistical problems prevent more grain from making the journey. Ukraine’s rail gauges are wider than those elsewhere in Europe. Shipments have to be transferred at the border to Romanian trains, or each railway car has to be lifted off a Ukrainian undercarriage and wheels to one that can be used on Romanian tracks.

Truck traffic in Ukraine has been slowed by backups at border crossings — sometimes lasting days — along with gas shortages and damaged roadways. Russia has targeted export routes, according to Britain’s defense ministry.

Romania has its own transit issues. High-speed rail is rare, and the country lacks an extensive highway system. Constanta and the surrounding infrastructure, too, suffer from decades of underinvestment.

Over the past couple of months, the Romanian government has plowed money into clearing hundreds of rusted wagons from rail lines and refurbishing tracks that were abandoned when the Communist regime fell in 1989.

Still, trucks entering and exiting the port from the highway must share a single-lane roadway. An attendant mans the gate, which has to be lifted for each vehicle.

When the bulk of the Romanian harvest begins to arrive at the terminals in the next couple of weeks, the congestion will get significantly worse. Each day, 3,000 to 5,000 trucks will arrive, causing backups for miles on the highway that leads into Constanta, said Cristian Taranu, general manager at the terminals run by the Romanian port operator Umex.

Mr. Mircea’s farm is less than a 30-minute drive from Constanta. But “during the busiest periods, my trucks are waiting two, three days” just to enter the port’s complex so they can unload, he said through a translator.

That is one reason he is less sanguine than Mr. Corbea is about Romania’s ability to take advantage of farming and export opportunities.

“Port Constanta is not prepared for such an opportunity,” Mr. Mircea said. “They don’t have the infrastructure.”

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Europe’s central banks jack up interest rates to fight inflation surge

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  • SNB unexpectedly hikes by half a percent
  • Bank of England raises rates by 25 bps
  • Hungary unexpectedly lifts one-week deposit rate
  • Inflation painfully high and not yet peaking

BERN/LONDON, June 16 (Reuters) – Central banks across Europe raised interest rates on Thursday, some by amounts that shocked markets, and hinted at even higher borrowing costs to come to tame soaring inflation that is eroding savings and squeezing corporate profits.

Fuelled initially by soaring oil prices in the wake of Russia’s invasion of Ukraine, inflation has broadened out to everything from food to services with double digit readings in parts of the continent.

Such levels have not been seen in some places since the aftermath of the oil crisis of the 1970s.

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The Swiss National Bank and the National Bank of Hungary both caught markets off guard with big upward steps, just hours after their U.S. counterpart the Federal Reserve lifted rates by the most in almost three decades. read more

The Bank of England meanwhile lifted borrowing costs by the quarter point markets had expected. read more

The moves come just a day after the European Central Bank agreed plans in an emergency meeting to contain borrowing costs in the bloc’s south so it could forge ahead with rates rises in both July and September. read more

“We are in a new era for central banks, where lowering inflation is their only objective, even at the expense of financial stability and growth,” George Lagarias, Chief Economist at Mazars Wealth Management said.

The day’s biggest moves came in Switzerland where the SNB raised its policy rate to -0.25% from the -0.75%, a step so large, not a single economist polled by Reuters had predicted it.

The first SNB hike since 2007 is unlikely to be the last, however, and the bank could be out of negative territory this year, some economists said.

“The new inflation forecast shows that further increases in the policy rate may be necessary in the foreseeable future,” SNB Chairman Thomas Jordan told a news conference.

The Swiss franc jumped almost 1.8% against the euro on the decision and was headed for the biggest daily rise since January 2015 when the SNB unhooked the franc from its euro peg.

TIGHTROPE

In London, the Bank of England was more cautious but said it was ready to act “forcefully” to stamp out dangers posed by an inflation rate heading above 11%. read more

It was the fifth time that the BoE has raised borrowing costs since December and the British benchmark rate is now at its highest since January 2009.

Three of nine rate setters however voted for a bigger, 50 basis point increase, suggesting that the bank will be under pressure to keep raising rates, even as economic growth slows sharply.

“Central bankers are teetering along a tightrope, with the biggest concern that raising rates too quickly could tip economies into recession,” Maike Currie, Investment Director for Personal Investing at Fidelity International said.

“Monetary policy tightening is a very blunt tool to manage a very precarious situation.”

Despite the hike, sterling fell sharply as some in the market had bet on a bigger move given the Fed’s 75 basis points hike the previous evening. The weaker currency, however, means higher imported inflation and further pressure to raise rates. read more

The pound was last at $1.2085 against the dollar, down three quarters of a percent on the day.

In Budapest meanwhile, the Hungarian central bank unexpectedly raised its one-week deposit rate by 50 basis points to 7.25% at a weekly tender, also to tame stubbornly rising inflation now running in double-digits.

Barnabas Virag, the bank’s deputy governor said the increase far was from the last and the bank would continue its rate hike cycle with “predictable and decisive” steps until it sees signs that inflation is peaking, probably in the autumn.

The hike also comes as the nation’s currency has lost close to 7% of its value this year, increasing inflation further via higher import prices.

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Writing by Balazs Koranyi in Frankfurt; Additional reporting by William Schomberg in London, Krisztina Than in Budapest, Mike Shields and Silke Koltrowitz in Zurich; Editing by Toby Chopra

Our Standards: The Thomson Reuters Trust Principles.

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In Ukraine, Some Ethnic Hungarians Feel Ambivalence About the War

TRANSCARPATHIA, Ukraine — Beneath dark clouds unleashing a summer rain, officials in a southwestern Ukrainian border village gathered silently, slowly hanging wreaths on branches to commemorate the destruction of a nation.

The wreaths were not decorated with the yellow and blue of the Ukrainian flag; they were laced, instead, with the red, white and green of Hungary’s. And the nation they honored this month was not their besieged country, but a homeland from their collective history, torn up more than 100 years ago.

Transcarpathia — now a hardscrabble region of Ukraine bordering Hungary — has been home to as many as 150,000 ethnic Hungarians who, through the complex horse-trading, conquests and boundary adjustments of over a century of European geopolitics, ended up within Ukraine’s borders.

war with Russia, the yearnings of Ukraine’s Hungarian minority were mostly brushed off as benign nostalgia for a time when they lived in one nation with other ethnic Hungarians. Now, divided loyalties within the tiny community — which has soaked up Hungary’s ambivalence toward Russia’s invasion — are being seen as something more worrisome by their fellow Ukrainians, some of whom fear they are susceptible to pro-Russia propaganda from Hungary.

Viktor Orban, is able to cause for his neighbors, in this case by playing on ethnic Hungarians’ feelings of discrimination by their government. And it adds another layer of complexity for Ukraine’s leaders as they try to keep their sprawling, multiethnic country united in the face of a brutal Russian invasion, even as they struggle to win allegiance from minorities including ethnic Russians and Hungarians.

tensions have risen as Mr. Orban has increasingly sought to bring ethnic Hungarian enclaves in Ukraine and elsewhere under his sway. Among other things, he has encouraged Hungarians beyond the country’s borders to claim citizenship, which allowed him to win over new voters to keep him in power.

In this poor region of Ukraine, along the Hungarian border, he doled out funding to run schools, churches, businesses and newspapers, winning gratitude — and helping fan resentments. The ceremony for a lost homeland did not exist before Mr. Orban came to power.

The feelings of otherness intensified as Ukraine, under constant threat by Russia, passed a law that mandates more classes be taught in Ukrainian in public schools. The law was mainly meant to rein in the use of the Russian language, but for the conservative Hungarian community where many still learn, and pray, almost exclusively in Hungarian, the law was seen as an unfair infringement on constitutional rights.

tried to block European Union sanctions on Russian energy imports, on which Hungary relies. And he declined to give weapons to Ukraine, or even allow them to be shipped across Hungary’s borders.

That wariness has seeped into the ethnic Hungarian community, fed by Hungarian television channels close to Mr. Orban’s governing party that broadcast into Hungarian-Ukrainian homes along the border. Hungarian broadcasters cast doubt on Ukraine’s position that Russia invaded to steal Ukrainian land, instead sharing Moscow’s perspective that it invaded to protect Russian speakers — a minority with a different language, not unlike the ethnic Hungarians.

“I think this is the main reason for the war, not what Ukraine says,” said Gyula Fodor, a vice rector at the Transcarpathian Hungarian Institute, chatting over traditional plum schnapps after the ceremony for the lost homeland. The institute, a private college, has received Hungarian funding, and Mr. Orban attended its ribbon-cutting.

As the war has dragged on, relations between Mr. Orban and President Volodymyr Zelensky of Ukraine have grown increasingly frosty.

In the border towns, suspicion is in the air. Some ethnic Ukrainians claimed during interviews that in the first days of Russia’s invasion Hungarian priests had urged the faithful to hold out hope that their region would be annexed to Hungary after Kyiv, the capital of Ukraine, fell, though there is no documentary evidence to substantiate those assertions.

In towns with ethnic Hungarian majorities, some people reported being harassed with mysterious text messages in Ukrainian: “Ukraine for Ukrainians. Glory to the nation! Death to enemies!” They said the messages ended with a threat using another word for ethnic Hungarians: “Magyars to the knives.”

Ukrainian intelligence officials publicly claim the texts came from a bot farm in Odesa using Russian software, and labeled it a Russian attempt to destabilize Ukraine, but they did not provide evidence.

Tensions in Transcarpathia erupted publicly after Moscow’s annexation of Crimea in 2014. Right-wing nationalists marched through the streets of Uzhhorod in recent years, sometimes chanting “Magyars to the knife.”

And a Hungarian cultural center in the city of Uzhhorod was set ablaze twice in 2017. In both cases, authorities said the perpetrators had pro-Russian links. Dmytro Tuzhankskyi, the director of the Institute for Central European Strategy in Uzhhorod that promotes Ukraine’s alignment with the West, says he believes Moscow was behind other local provocations. Moscow would like to sow discord between Hungary and Ukraine, he alleged, as a way of causing more trouble for the Western alliance that has lined up against Mr. Putin.

Hungarian and local officials, he worried, could unwittingly fall prey to such designs: “They might think: One more little provocation — it means nothing. That’s a very dangerous mind-set.”

Yet for many ethnic Hungarians, Ukraine is not blameless.

László Zubánics, the leader of the Hungarian Democratic Union of Ukraine, said locals watch Hungarian television partly because no Ukrainian cable channels reach the border areas, something he saw as a form of political neglect. But he acknowledged that ethnic Hungarians often choose to tune into Hungarian, and not Ukrainian, satellite channels.

Many ethnic Hungarians say they are only able to afford to stay in the region of family vineyards and farms because of Hungarian funding. That makes many ethnic Hungarians skeptical of Ukraine’s claims that it wants to help integrate them into society, Mr. Zubánics said: “Most kids and parents say, ‘Why do I need the state language? I don’t see my place here in this country.’”

Although the Soviets repressed and exiled Hungarian nationalists, some ethnic Hungarians have started to look back on Soviet rule as a time of relative cultural freedom as well. It was a time, according to Mr. Zubánics, when Hungarians recall holding prominent official positions, unlike in modern Ukraine.

Nostalgia for Soviet times stirs the ire of local right-wing nationalists such as Vasyl Vovkunovich, once a political ally of Hungarian nationalists in the final days of the Soviet Union. In 2017, he said he led a march of supporters down the streets of Berehove, ripping down Hungarian flags raised over many churches and buildings.

“These Hungarians are not worthy,” he said. “Their ancestors would roll over in their graves if they knew Hungary was siding with Russia.”

For local residents like Zoltan Kazmér, 32, the present feels more complicated. He feels loyal to Ukraine, he said. But it was Hungarian funding that allowed him to turn his family’s century-old winemaking tradition into a business.

“When we go to Hungary, we feel like Ukrainians,” he said. “When we are in Ukraine, we feel like Hungarians.”

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