Russell Lee Secondhand store in Council Bluffs, Iowa 1936
Losses among lenders will be stunning.
The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices – which few experts foresee in the near future – an over-leveraged, under-hedged US E&P industry faces a truly grim 2016. How bad could things get and when? It increasingly looks like a number of the weakest companies will run out of financial stamina in the first half of next year, and with every dollar of income going to service debt at many heavily leveraged independents, there are waves of others that also face serious trouble if the lower-for-longer oil price scenario extends further.
“I could see a wave of defaults and bankruptcies on the scale of the telecoms, which triggered the 2001 recession,” Timothy Smith, president of consultancy Petro Lucrum, told a Platts energy conference in Houston last week. Much has been made about the resiliency of US oil production in the face of low prices, but the truth is that many producers are maximizing their output — even unprofitable volumes — because they need the cash flow to service their debt (related). “As an industry, we’re at the point where every dollar of free cash flow now goes to paying back debt,” Angle Capital’s Steve Ilkay told the same conference. Ilkay, who advises North American producers on asset management, said during the boom years of 2012-14 about 55% of the sector’s free cash flow, which is calculated by subtracting capital expenditures from operating cash flow, was allocated toward debt repayment.
With West Texas Intermediate (WTI) stuck below $50 per barrel since August – and closer to $40 recently – the industry has responded with deeper cuts to capex and a greater focus on efficiency. However, experts say this won’t be enough to avoid a bloody reckoning with persistent low oil and gas prices, as the sector grapples with some $200 billion-plus in high-yield debt, which it absorbed to finance the shale oil boom. Credit quality has been steadily deteriorating since June 2014, when WTI peaked at $108/bbl. Standard and Poor’s says there have been 19 defaults so far in 2015 across the US oil and gas industry, while another 15 companies have filed for bankruptcy. Besides those that have missed interest or principal payments, the default category also includes companies that have entered into “distressed exchanges” with their creditors, including Halcon, SandRidge, Midstates, Goodrich, Warren, Exco, Venoco and Energy XXI.
Of the 153 oil and gas companies that S&P applies credit ratings to, roughly two-thirds are E&P firms. Among these E&Ps, 77% now have high-yield or “junk” ratings of BB+ or lower. 63% are rated B+ or worse, and 31% – or 51 companies – are rated below B-. What does this all mean in layman’s terms? “Quite frankly it’s a lot of gloom and doom,” says Thomas Watters, managing director of S&P’s oil and gas ratings. “I lose sleep over what could unfold.” He says companies with ratings of B- or below are “on life support,” while those further down the ratings scale at C+ or lower are “maybe looking at a year, year-and-a-half before they default or file for bankruptcy.”
Disappointing won’t begin to describe it, but a suitable narrative will be found.
America’s annual Black Friday shopping extravaganza was short on fireworks this year as U.S. retailers’ discounts on electronics, clothing and other holiday gifts failed to draw big crowds to stores and shopping malls. Major retail stocks including Best Buy and Wal-Mart closed lower while Target, picked out by one analyst for its promotion strategy, saw its shares tick up. Bargain hunters found relatively little competition compared with previous years. Some had already shopped Thursday evening, reflecting a new normal of U.S. holiday shopping, where stores open up with deals on Thanksgiving itself, rather than waiting until Black Friday. Retailers “have taken the sense of urgency out for consumers by spreading their promotions throughout the year and what we are seeing is a result of that,” said Jeff Simpson, director of the retail practice at Deloitte.
Traffic in stores was light on Friday, while Thursday missed his expectations, he said. As much as 20% of holiday shopping is expected to be done over the Thanksgiving weekend this year, analysts said. But the four days are not considered a strong indicator for the entire season. A slow start last year led to deeper promotions and a shopping rush in the final ten days of December. Steve Bratspies, chief merchandising officer at Wal-Mart, told Reuters he was not surprised that a store would see thinner crowds on Friday after it kicked off Black Friday deals on Thursday night. Suntrust Robinson Humphrey analysts were more blunt, calling Thursday a “bust”. “Members of our team who went to the malls first had no problem finding parking or navigating stores,” he wrote in a note.
“Debt based stimulus is both sustaining and killing the economy at the same time.”
One popular delusion that won’t seem to go away is the notion that policy makers can stimulate robust economic growth by setting interest rates artificially low. The general theory is that cheap credit compels individuals and businesses to borrow more and consume more. efore you know it, the good times are here again. Profits increase. Jobs are created. Wages rise. A new cycle of expansion takes root. These are the supposed benefits to an economy that central bankers can impart with just a little extra liquidity. Unfortunately, this policy antidote doesn’t always work out in practice. Certainly cheap credit can have a stimulative influence on an economy with moderate debt levels. But once an economy has reached total debt saturation, where new debt fails to produce new growth, the cheap credit trick no longer works to stimulate the economy.
In fact, the additional credit, and its counterpart debt, actually strangles future growth. Present monetary policy has landed the economy at the unfavorable place where more and more digital monetary credits are needed each month just to stand still. After seven years of ZIRP, financial markets have been distorted to the point where a zero bound federal funds rate has become restrictive. At the same time, applications of additional debt only serve to further the economy’s ultimate demise. The fundamental fact is that the current financial and economic paradigm, characterized by heavy handed Federal Reserve intervention into credit markets, is dying. Debt based stimulus is both sustaining and killing the economy at the same time. No doubt, this is a strange situation that has developed.
No government has the right to play such a role.
The American student loan crisis is often seen as a problem of profligacy and predation. Wasteful colleges raise tuition every year, we are told, even as middle-class wages stagnate and unscrupulous for-profit colleges bilk the unwary. The result is mounting unmanageable debt. There is much truth in this diagnosis. But it does not explain the plight of Liz Kelley, a Missouri high school teacher and mother of four who made a series of unremarkable decisions about college and borrowing. She now owes the federal government $410,000, and counting. This is a staggering and unusual sum. The average undergraduate who borrows leaves school with about $30,000 in debt. But Ms. Kelley’s circumstances are not unique.
Of the 43.3 million borrowers with outstanding federal student loans, 1.8%, or 779,000 people, owe $150,000 or more. And 346,000 owe more than $200,000. Ms. Kelley’s debt woes are also mostly a matter of interest, not principal, a growing problem for the nation’s student debtors. According to the Federal Reserve Bank of New York, the number of active borrowers enrolled in college has declined to roughly nine million today from about 12 million in 2010. Yet the total amount of outstanding debt continues to increase, because many borrowers are not paying back their older loans. This is partly a function of continuing economic hardship. But it also reflects how the federal government has become the biggest, nicest and meanest student lender in the world.
Xi plays with a fire he doesn’t understand.
China’s stocks tumbled the most since the depths of a $5 trillion plunge in August as some of the nation’s largest brokerages disclosed regulatory probes, industrial profits fell and two more companies said they’re struggling to repay bonds. The Shanghai Composite Index sank 5.5%, with a gauge of volatility surging from the lowest level since March. Citic Securities and Guosen Securities plunged by the daily limit in Shanghai after saying they were under investigation for alleged rule violations. The probe into the finance industry comes as the government widens an anti-corruption campaign and seeks to assign blame for the selloff earlier this year. Authorities are testing the strength of a nascent bull market by lifting a freeze on initial public offerings and scrapping a rule requiring brokerages to hold net-long positions, just as the earliest indicators for November signal a deterioration in economic growth.
A Chinese fertilizer maker and a pig iron producer became the latest companies to flag debt troubles after at least six defaults this year. “The sharp decline will raise questions whether the authorities’ confidence that we are seeing stability in the Chinese markets may be a tad premature,” said Bernard Aw, a strategist at IG Asia in Singapore. “The rally since the August collapse was not fundamentally supported. The removal of restrictions for large brokers to sell and the IPO resumptions may not have been announced at an opportune time.” Friday’s losses pared the Shanghai Composite’s gain since its Aug. 26 low to 17%. The Hang Seng China Enterprises Index slid 2.5% in Hong Kong. The Hang Seng Index retreated 1.9%. A gauge of financial shares on the CSI 300 slumped 5%. Citic Securities and Guosen Securities both dropped 10%. Haitong International Securities slid 7.5% for the biggest decline since Aug. 24 in Hong Kong.
Half of the gold coming from mines may not be viable at current prices, underscoring the industry’s need for consolidation and output cuts, according to the best-performing producer of the metal in the past decade. “The more we continue to produce unprofitable gold, the more pressure we put on the gold price,” Randgold Resources CEO Mark Bristow said in Toronto on Friday. “In the medium term, it’s a very bullish outlook for the gold industry. The question is, how long are we going to supply it with unprofitable gold?” Gold fell to a five-year low on Friday as a rising dollar and speculation that U.S. policy makers will boost interest rates next month curbed the appeal of bullion as a store of value. While industrial metal producers have promised output cuts, “we don’t have that psyche in the gold industry, we just send it off our mine and somebody buys it,” Bristow said.
Gold miners buffeted by the drop in prices are shortening the life of mines by focusing only on the best quality ore, a practice known as high grading, which will restrict future output and support higher prices, according to Bristow. He said in a presentation to bankers in Toronto that the industry life span is down to about five years because companies have been aggressively high grading at the expense of future production. “The industry has moved away from looking at optimal life of mines because everyone is trying to demonstrate short-term delivery,” he said in the interview after the presentation. “Where is all this value that people promised in the gold industry? It’s not there.”
Way to go! Lock up all whistleblowers! Leave the bankers alone!
The whistleblower who exposed wrongdoing at HSBC’s Swiss private bank has been sentenced to five years in prison by a Swiss court. Hervé Falciani, a former IT worker, was convicted in his absence for the biggest leak in banking history. He is currently living in France, where he sought refuge from Swiss justice, and did not attend the trial. The leak of secret bank account details formed the basis of revelations – by the Guardian, the BBC, Le Monde and other media outlets – which showed that HSBC’s Swiss banking arm turned a blind eye to illegal activities of arms dealers and helped wealthy people evade taxes. While working on the database of HSBC’s Swiss private bank, Falciani downloaded the details of about 130,000 holders of secret Swiss accounts. The information was handed to French investigators in December 2008 and then circulated to other European governments.
It was used to prosecute tax evaders including Arlette Ricci, the heir to France’s Nina Ricci perfume empire, and to pursue Emilio Botín, the late chairman of Spain’s Santander bank. Switzerland’s federal prosecutor had requested a record six-year term for Falciani for aggravated industrial espionage, data theft and violation of commercial and banking secrecy. It was the longest sentence ever demanded by the confederation’s public ministry in a case of banking data theft. The trial was also the first conducted by the country’s federal criminal court in which the accused had not been present. The defendant’s lawyers had demanded a reduced sentence, of between two and three years, “compatible with the granting of a reprieve”.
Falciani himself refused to appear in the dock, on the grounds that he would not be allowed a fair trial. He described the process as a “parody of justice”. [..] Falciani’s lawyer, Marc Henzelin, pointed out that his client was on trial at a time when Switzerland was in the process of dismantling its banking secrecy practices with proposals for new laws that would pave the way for automatic information exchange about offshore accounts held in Switzerland. In fact, Switzerland announced on 4 November that the country’s finance ministry temporarily shelved the plans for reform. “It is not Falciani who is being judged. It is the court. It is Switzerland,” said Henzelin.
The inevitable result of the Troika’s forced fire sale of Greek bank shares to global investment funds.
The New York Stock Exchange is delisting American depositary receipts of National Bank of Greece SA after they lost 91% of their value this year. The ADRs were suspended on Friday, when their value slumped to 16 cents from as much as $1.96 in February. NYSE cited an “abnormally low” price in a statement. Losses spiraled to a record this month, after the Greek lender sold new shares at a more than 90% discount to market prices. The nation’s four largest banks have been raising capital to help fill a €14.4 hole in their accounts identified by the European Central Bank. National Bank of Greece has the right to appeal the decision to a committee of the board of directors of NYSE. The stock in Athens closed at a record low of 8 euro cents, taking its weekly slump to 64%.
“What is unsettling is that the organisers are from the three areas of the world where there seems to be, among scientists at least, the most enthusiasm for going forward.”
The question could hardly be more profound. Having stumbled upon a simple means to make precise changes to the code of life, should humans take control of their genetic fate, and rewrite the DNA of future generations? Once an idea explored only in fiction, the prospect is now a real one. The inexorable rise of gene editing has put the technology in labs across the globe. The first experiments on human embryos have been done, in a bid to correct faulty genes that cause disease. To thrash out an answer, or at least find common ground, an international group of experts will descend on Washington DC next week for a three day summit. Convened with some urgency by the US, UK and Chinese national academies, the meeting is billed as a “global discussion”. It is a chance to take stock of a revolutionary technology that has the power to do good, and the potential to wreak havoc.
“This new technology for gene editing, that is, selectively inserting and removing genes from an organism’s DNA, is spreading around the world,” says Ralph Cicerone, president of the US National Academy of Sciences, where the summit will take place. With the number of experiments ballooning, the uses and risks the technology brings must be worked through now, he adds. The last time scientists met like this was in 1975, when it became clear that the DNA from one species could be spliced into another. One experiment underway at the time aimed to put DNA from a cancer-causing monkey virus into bacteria that infect humans. The potential for disaster led to a meeting in Asilomar, California, to agree and make public fresh safeguards for the experiments.
Jennifer Doudna, an inventor of a gene editing tool called Crispr-Cas9, said Asilomar was much in mind when the summit was organised. “I think it’s this generation’s version of Asilomar,” she says. “It’s a very exciting time, but as with any powerful technology, there is always the risk that something will be done either intentionally or unintentionally that somehow has ill effects.” [..] Marcy Darnovsky, director of the Center for Genetics and Society, and a speaker at the summit, said that the meeting could make a real contribution to the debate, but needed to be far more inclusive. “What is unsettling is that the organisers are from the three areas of the world where there seems to be, among scientists at least, the most enthusiasm for going forward.”
Darnovsky wants a total ban on editing human embryos that are destined to become people. “It’s way too risky and it’s likely to remain that way,” she says. If editing was allowed to prevent diseases being passed on, it would quickly lead to designer babies, she argues. “People say it is a slippery slope. I don’t call that a slippery slope, I call that jumping off a cliff,” she says. “We would be well on the way to a world in which people who could afford to do so would attempt to give their children the best start in life, and competitive and commercial pressures would kick in. We’d end up in a world of genetic haves and have-nots, and risk introducing new kinds of inequality when we already have shamefully way too much.”
“Starting with 100,000 cloned cattle embryos a year in “phase one”, Mr Xu envisages 1 million annually at some point in the future..”
In Chinese mythology, the Monkey King is a beast with magical fur. All he has to do is pull out a hair, blow on it and it is instantly transformed into a clone of himself. Xu Xiaochun, chief executive of BoyaLife, says the fable is not far from reality, as far as his Chinese biotechnology company is concerned. This week he announced an investment of $31m in a joint venture with South Korea’s Sooam Biotech that aims to clone 1m cows a year from their hair cells. The Monkey King “sounds like a fairy tale but we are really doing the same thing”, he says. “We pull out 200 hairs, blow on them — and boom!” Sometime next year, researchers in BoyaLife’s laboratory on the outskirts of the coastal city of Tianjin will take skin cells from a few carefully chosen cattle (Kobe beef is Mr Xu’s favourite).
The scientists will extract the nucleus from each cell and place it into an unfertilised egg from another cow. The cloned embryos will then be implanted in surrogate dairy cows housed on cattle ranches throughout China. His ambition is staggering. Starting with 100,000 cloned cattle embryos a year in “phase one”, Mr Xu envisages 1 million annually at some point in the future. That would make BoyaLife by far the largest clone factory in the world. Mr Xu says the latest techniques enable cloning to be carried out in an “assembly line format” at a rate of less than 1 minute per cell. Based on a four- hour shift and 250 working days a year, a proficient cloner would “manufacture” 60,000 cloned cow embryos a year, he says, adding that a team of 50 will be sufficient for the planned scale of the project. Mr Xu plans to have a staff of 300 and eventual total investment is estimated at $500m.
If the venture comes anywhere near achieving its goal, it will be another example of the recent surge of path-breaking, taboo-busting biotechnology research, with China introducing mass production and commercialisation of projects that are still in the experimental and clinical stages elsewhere. China’s flag-bearer in biotech is BGI, formerly known as Beijing Genomics Institute and now based in Shenzhen. BGI has grown into the world’s biggest genomics organisation, with a huge capacity to read, analyse and alter DNA from plants, microbes, people and animals. It employs more than 2,000 PhD-level scientists and 200 top-of-the-range gene-sequencing machines. In September BGI captured the public imagination with an announcement that “micropigs”, originally developed for biomedical research through gene editing and cloning, would be sold as pets.
Count Russian reserves as another casualty of income inequality that Thomas Piketty believes is reshaping the world’s biggest economies. Russia, which is struggling to rebuild holdings depleted during last year’s currency crisis, has missed out on building a bigger stockpile in the past 15 years by failing to create a more transparent financial system to ease inequality and distribute the spoils of a boom in commodities prices, said Piketty, the author of the bestselling “Capital in the 21st Century.” Jailing “a couple of billionaires from time to time” is no way to address the challenge, the French economist said in an interview in Moscow on Thursday. “In the long term, Russia should have much more reserves, given the level of its trade surplus,” he said.
“It’s important to realize that Russia is being stolen money from, by capital flight and by the fact that billionaires and millionaires outside Russia and sometimes inside Russia are able to benefit from natural resources of Russia much more than they should.” Piketty, 44, who gave a lecture at the Higher School of Economics in Moscow, may already be preaching to the converted. The government is looking to wring greater revenue from the energy industry with a tax increase, while the Bank of Russia has set a target of about $500 billion for reserves after burning through a fifth of its holdings to prop up the ruble last year. Vladimir Putin, in power for 16 years as premier or president, has backed efforts to repatriate as much as $1 trillion in capital held by companies and high-ranking officials abroad as part of what he’s called the “de-offshorization” of the economy.
Putin, who introduced a 13% flat income tax rate in 2001, has also seen top ministers broach the subject of re-instituting a progressive tax system. The current income levy is “relatively small” in a country with “a lot of inequality” and “far too little transparency,” Piketty said. “Russia would be in a much better situation today if this reform for more transparency, progressive taxation would have been conducted before,” Piketty said. “It’s time, especially in the current crisis, to change course and to deal with inequality and transparency in a much more front-faced way.”
The debate is gaining urgency after the government allowed household finances to bear the brunt of the country’s first recession in six years, putting Russia on track for the biggest drop in consumption during Putin’s rule. This year, 21.7 million people, or about 15% of the population, are living beneath the subsistence level, according to the Federal Statistics Service. The crisis marks the “first significant” increase in Russia’s poverty since the crisis in 1998-1999, according to the World Bank.
Over the course of the last four or so weeks, the media has paid quite a bit of attention to Islamic State’s lucrative trade in “stolen” crude. On November 16, in a highly publicized effort, US warplanes destroyed 116 ISIS oil trucks in Syria. 45 minutes prior, leaflets were dropped advising drivers (who Washington is absolutely sure are not ISIS members themselves) to “get out of [their] trucks and run away.” The peculiar thing about the US strikes is that it took The Pentagon nearly 14 months to figure out that the most effective way to cripple Islamic State’s oil trade is to bomb… the oil. Prior to November, the US “strategy” revolved around bombing the group’s oil infrastructure.
As it turns out, that strategy was minimally effective at best and it’s not entirely clear that an effort was made to inform The White House, Congress, and/or the public about just how little damage the airstrikes were actually inflicting. There are two possible explanations as to why Centcom may have sought to make it sound as though the campaign was going better than it actually was, i) national intelligence director James Clapper pulled a Dick Cheney and pressured Maj. Gen. Steven Grove into delivering upbeat assessments, or ii) The Pentagon and the CIA were content with ineffectual bombing runs because intelligence officials were keen on keeping Islamic State’s oil revenue flowing so the group could continue to operate as a major destabilizing element vis-a-vis the Assad regime.
Ultimately, Russia cried foul at the perceived ease with which ISIS transported its illegal oil and once it became clear that Moscow was set to hit the group’s oil convoys, the US was left with virtually no choice but to go along for the ride. Washington’s warplanes destroyed another 280 trucks earlier this week. Russia claims to have vaporized more than 1,000 transport vehicles in November. Of course the most intriguing questions when it comes to Islamic State’s $400 million+ per year oil business, are: where does this oil end up and who is facilitating delivery?
There will come a point when Erdogan’s own people turn against him.
Turkish President Tayyip Erdogan warned Russia on Friday not to “play with fire”, citing reports Turkish businessmen had been detained in Russia, while Moscow said it would suspend visa-free travel with Turkey. Relations between the former Cold War antagonists are at their lowest in recent memory after Turkey shot down a Russian jet near the Syrian border on Tuesday. Russia has threatened economic retaliation, a response Erdogan has dismissed as emotional and indecorous. The incident has proved a distraction for the West, which is looking to build support for the U.S.-led fight against Islamic State in Syria. The nearly five-year-old Syrian civil war has been complicated by Russian air strikes in defense of President Bashar al-Assad.
Turkey, which has long sought Assad’s ouster, has extensive trade ties with Moscow, which could come under strain. Erdogan condemned reports that some Turkish businessmen had been detained for visa irregularities while attending a trade fair in Russia. “It is playing with fire to go as far as mistreating our citizens who have gone to Russia,” Erdogan told supporters during a speech in Bayburt, in northeast Turkey. “We really attach a lot of importance to our relations with Russia … We don’t want these relations to suffer harm in any way.” He said he may speak with Russian President Vladimir Putin at a climate summit in Paris next week. Putin has so far refused to contact Erdogan because Ankara does not want to apologize for the downing of the jet, a Putin aide said.
Erdogan has said Turkey deserves the apology because its air space was violated. Russian Foreign Minister Sergei Lavrov said on Friday Moscow would suspend its visa-free regime with Turkey as of Jan. 1, which could affect Turkey’s tourism industry. Turkey’s seaside resorts are among the most popular holiday destinations for Russians, who make up Turkey’s largest number of tourist arrivals after Germany. An association of Russian defense factories, which includes the producers of Kalashnikov rifles, Armata tanks and Book missile systems, has recommended its members suspend buying materials from Turkey, according to a letter seen by Reuters. That could damage contracts worth hundreds of millions of dollars. Russia’s agriculture ministry has already increased checks on food and agriculture imports from Turkey, in one of the first public moves to curb trade.
“This is exactly what the French did after the Paris attacks..”
Russia may resume visa-free travel with Turkey if Ankara stops helping the Islamic State terrorists, the head of the State Duma’s international affairs committee said on Friday. Russia has decided to suspend the visa-free regime with Turkey from the January 1, 2016, Foreign Minister Sergei Lavrov said on Friday after a meeting with his Syrian counterpart Walid Muallem in Moscow. “Relations between Russia and Turkey are the main factor here… If Ankara continues its de-facto support for ISIL militants, provides them with everything they need and endorses their actions in Syria, then we will not be able to restore the visa-free regime,” Alexei Pushkov said at a news briefing in Moscow.
Driving the Islamic State militants out of the territories they now control in Iraq and Syria would help lessen the threat they pose to the rest of the world. Destroying the ISIL headquarters would facilitate our joint fight against the terrorist threat, Pushkov added. “The terrorists use Turkish territory as a transit zone to bring reinforcements and arms to the conflict zone in Syria. Some of these militants may be sent to carry out terrorist attacks here in Russia, so our decision to suspend the visa-free regime with Turkey will help keep them out. This is exactly what the French did after the Paris attacks and the EU is now considering a closure of its external borders in the face of the terrorist threat,” Pushkov noted.
Immoral dealmaking that the EU should never have been party to.
European and Turkish officials are working to smooth out their remaining differences on an agreement to help stem flows of migrants to Europe, which they hope will be signed on Sunday by European Union leaders and Turkey’s prime minister. Turkish President Tayyip Erdogan broadly accepted a proposed action plan last month, under which the EU would provide €3 billion in aid for the 2.3 million Syrian refugees in Turkey. It will also “re-energize” talks on Ankara’s joining the bloc and ease visas for Turks visiting Europe. But diplomats and officials said on Friday that differences remained on just what Turkey would commit to do in return – and when – to prevent migrants from making the short but risky crossing to Greek islands and to accept the return of people who reach the EU but fail to qualify for asylum.
German Chancellor Angela Merkel, a driving force behind seeking Turkish help in easing the refugee crisis, has faced criticism from EU allies for encouraging Erdogan to increase his demands. A senior German official stressed on Friday that Ankara also had much to gain from greater cooperation. Bolstered by the victory of his AK party in a parliamentary election early this month, Erdogan re-appointed Prime Minister Ahmet Davutoglu and, EU officials and diplomats say, Turkey is now driving a hard bargain – notably seeking 3 billion euros per year instead of the EU offer of the same amount over two.
“There are things that can still go wrong. It’s not a simple negotiation. Among the 28 member states, there are different sensibilities about Turkey, then with Turkey itself a dialogue needs to be found,” a senior EU official said on Friday. “It’s always possible there won’t be an agreement.” A diplomat in Ankara said: “Turkey is pushing its luck. They’re asking for a lot and the atmospherics aren’t good. “At the same time, there are a lot of important actors within Europe that have a soft spot for Turkey and really want to find ways of taking the relationship forward.”
“..no trains have come in or out of Greece for the last week.”
A protest by migrants on Greece’s border with the Former Yugoslav Republic of Macedonia (FYROM) is putting railway operator Trainose at risk of losing major international clients. Migrants have over the last few days been protesting FYROM’s decision not to let them cross from Greece. Many migrants have camped on the railway lines connecting the two countries, which means that no trains have come in or out of Greece for the last week. This means that the freight Trainose is responsible for carrying has not been able to reach its destinations. The railway company serves major international clients such as Hewlett Packard and Sony.
There is concern that if the protest does not end soon, these companies will be forced to transport their goods by road. “The issue is not paying compensation to the companies, which we can pay even if the situation is not our fault,” said Trainose CEO Thanasis Ziliaskopoulos. “What is more important is that the country’s credibility is at stake.” Trainose’s contract with Chinese giant Cosco to transport goods that arrive at Piraeus port is seen as a key part of the goal to make Greece a logistics hub in Southeastern Europe.
What will future generations say about us?
Turkish state media say six children have drowned when boats carrying migrants to Greece sank in two incidents off the Turkish coast. A wooden boat smuggling some 20 people to the island of Kos capsized in bad weather off the Aegean resort of Bodrum early on Friday. The state-run Anadolu Agency says most of the migrants made it to shore with the help of rescuers, but two sisters aged 4 and 1 drowned. Their nationalities were not immediately known. The agency says a second boat carrying as many as 55 migrants from Syria and Afghanistan sank hours later off the town of Ayvacik, further north. Four Afghan children drowned in that incident, Anadolu reported. Ayvacik is a main crossing point for migrants trying to reach the island of Lesvos.