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French President Emmanuel Macron will make the tough political choices needed to meet his deficit commitments, his government spokesman said, as he looked to put a bodyguard scandal behind him at his first Cabinet meeting after the summer break.

Macron and his ministers in all likelihood need to find savings in next year’s budget, to be presented to parliament next month, if they are to prevent the deficit from ballooning once again.

The president faced his first crisis in the summer when video surfaced of bodyguard Alexandre Benalla beating a protester. Macron’s own aloof response fanned public discontent.

Now the 40-year-old leader returns to work facing difficult political choices as he embarks on a new wave of reforms to reform the pensions system, overhaul public healthcare and shake-up the highly unionized public sector — tasks complicated by forecasts that economic growth is slower than expected.

“A budget is not only figures, but a strategy, and strong political choices,” Griveaux said, without giving details on the budget negotiations. “There will be [spending] increases and then we will require efforts from other sectors.”

The French economy eked out less growth than expected in the second quarter as strikes and higher taxes hit consumer spending, official data showed in July.

Macron has linked fiscal discipline to restoring France’s credibility in Europe, and while the budget deficit — forecast at 2.3 percent of GDP this year and next — should not surpass the EU-mandated 3 percent limit, it is still expected to be one of the highest in the euro zone.

“The budget equation is becoming more complicated,” Denis Ferrand, economist at COE-Rexecode told Reuters.

The Bank of France has revised 2018 growth down to 1.8 percent from 1.9 percent. Budget rapporteur Joel Giraud in July said that a revision down to 1.7 percent could see the public deficit slip by 0.2 percentage points.

Beyond raising eyebrows in Brussels and Berlin, it would also complicate Macron’s efforts to make transfers towards social policies that might help him dispel the impression among leftist critics that he is a “president of the rich.”

“It would be more difficult to find resources for social spending,” Ferrand said.

Elysee officials acknowledge growth was lower than expected in the first half, and say the housing and subsidized jobs portfolios will see sharp cuts to help finance Macron’s priorities in education, security and the environment.

Some 1 billion euros ($1.14 billion) is expected to be saved by changing rules for widely-enjoyed housing benefits, junior minister Julien Denormandie told BFM TV earlier on Wednesday.

Last year, a cut of five euros ($6) per month to the same allowance contributed to a sharp slump in the president’s popularity, which opinion polls show plumbing lows.
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Saudi Arabia has called off both the domestic and international stock listing of state oil giant Aramco, billed as the biggest such deal in history, four senior industry sources said on Wednesday.

The financial advisors working on the proposed listing have been disbanded, as Saudi Arabia shifts its attention to a proposed acquisition of a “strategic stake” in local petrochemicals maker Saudi Basic Industries Corp., two of the sources said.

“The decision to call off the IPO was taken some time ago, but no-one can disclose this, so statements are gradually going that way — first delay then calling off,” a Saudi source familiar with IPO plans.

Saudi Aramco did not immediately respond to an emailed request for comment. The Saudi Royal Court had no immediate comment.

The proposed listing of the national champion was a central part of Crown Prince Mohammed bin Salman’s reform drive aimed at restructuring the kingdom’s economy and reducing its dependence on oil revenue.

The prince announced the plan to sell about 5 percent of Aramco in 2016 via a local and an international listing, predicting the sale would value the whole company at $2 trillion or more. Several industry experts however questioned whether a valuation that high was realistic, which hindered the process of preparing the IPO for the advisors.

Stock exchanges in financial centers including London, New York and Hong Kong had been vying to host the international tranche of the share sale.

An army of bankers and lawyers started to fiercely compete to win advisory roles in the IPO, seen as a gateway to a host of other deals they expected to flow from the kingdom’s wide privatization program.

International banks JPMorgan, Morgan Stanley and HSBC, were working as global coordinators, boutique investment banks Moelis & Co and Evercore were chosen as independent advisors and law firm White & Case as legal adviser, sources had previously told Reuters.

More banks were expected to be named but no bookrunners were formally appointed despite banks pitching for the deal.

Lawyers, bankers and auditors are all essential in the drafting the prospectus, a formal document that provides essential details on the company.

“The message we have been given is that the IPO has been called off for the foreseeable future,” said one of the sources, a senior financial advisor.

“Even the local float on the Tadawul Stock Exchange has been shelved,” the source added.

Saudi energy minister and Aramco chairman Khalid al-Falih said in the company’s 2017 annual report, released in August, that Aramco “continued to prepare itself for the listing of its shares, a landmark event the company and its board anticipate with excitement.”

Aramco had a budget which it used to pay advisors until the end of June. This has not been renewed, one of sources said.

“The advisors have been put on standby,” a third source, a senior oil industry official said.

“The IPO has not been officially called off, but the likelihood of it not happening at all is greater than it being on.”

Sources have previously told Reuters that in addition to the valuations, disagreements among Saudi officials and their advisers over which international listing venue to be chosen had slowed down the IPO preparations.
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When reforms began in Myanmar in 2011, its tourism sector was considered as one of those most likely to take advantage of the economic opportunities as the country looked to reconnect with the outside world. 

Authorities and businesspeople were confident that foreign tourists would be drawn to Myanmar, eager to see such sites as the ancient temples of Bagan, the unique culture of Inle Lake, or the picturesque beaches overlooking the Bay of Bengal. 

For a while it worked, as Myanmar’s international reputation improved in-line with the reforms happening at the time, the country was at the top of many visitors’ wish lists. Official figures showed that more than 4.68 million tourists visited the country in 2015, up from 816,000 in 2011. In 2017, 3.4 million tourists visited. 

But the situation has changed again. The tourism sector has been heavily impacted by the crisis in Rakhine State, which has seen 700,000 Rohingya cross into Bangladesh to flee a brutal army crackdown. Myanmar’s military has been accused of ethnic cleansing the Rohingya, leading many tourists to stay away because of ethical concerns. 

Myanmar’s government recognizes the need to take action, and in early August held a meeting for stakeholders to discuss what measures can be taken to improve the situation. 

At that event, de facto leader Aung San Suu Kyi said the country should focus on measures such as improving rail and water transport, providing clean accommodation and developing more community-based tourism projects.

“Tourists can get many opportunities such as viewing the beautiful scenery and enjoying new experiences,” Aung San Suu Kyi said. “That is why roads, water ways and railways should be considered aside from air travel.” 

Tourist operators in the country welcomed the remarks, but said that there are more short-term measures that can be made, and have also called for a nationwide strategic plan to tackle the malaise the industry is currently undergoing. 

“What is needed is a comprehensive integrated approach from [the government] and the private sector to improve the tourism sector,” said Aung Kyaw Swar, former principal of the Inle Heritage Foundation. “This should include infrastructure, products, channels of communication, public relations, marketing and sales.” 

He said he welcomed Aung San Suu Kyi’s speech, particularly the calls to improve infrastructure, but said a cohesive plan should be formed, including one that ensures that the respective ministries work closely together. 

He also said that the government should invest in research teams, in order to effectively research potential clients’ expectations when they visit the country.

Foreign visitors to Myanmar have traditionally been drawn towards the major cities of Yangon and Mandalay, as well as Bagan and Inle Lake, but new destinations are emerging, and tourist development in lesser known areas could bring economic benefits. 

U Bawla, a hotelier in Kale, the gateway to Chin State, one of Myanmar’s most scenic but underdeveloped regions, said that government support for tourism development would bring huge improvements for the lives of Chin people. 

“When people come to Chin State, [they say] it is an amazing, and beautiful place,” he said, adding that only a handful of tourists visit each month. “I think that if the government concentrates on [developing tourism] in Chin State, that will bring many improvements for the Chin people, including improvements in roads and transportation.” 

Bertie Lawson, managing director of Yangon-based Sampan Travel, said that Aung San Suu Kyi’s recommendations were “a good start”, but that much more needed to be done. 

As examples, he highlighted the practice by domestic airlines of charging foreigners double the price of Myanmar citizens, and the fact that buses to tourist destinations are often scheduled to arrive in the middle of the night, rather than at times more convenient for visitors. 

“This might seem small and petty, but they add up and make people wonder if Myanmar is really worth it, when they could go elsewhere and not have to deal with this,” he told VOA. 

“People aren’t complaining about the lack of CBT projects, or waterways. They’re complaining about the price, or about the issues they have traveling around the county. Those things can be changed, and should be looked at first,” he said. 

Lawson said he believed the impact of the Rakhine crisis on tourism would likely be long-term, but said there was still reason to be optimistic. 

“Repairing that reputation will take quite a long time,” he said. “I don’t think that means that tourism can’t do well, I just don’t think it will grow quite at the rate many were previously expecting.” 
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Following Seoul’s announcement that South Korean companies have illegally imported North Korean coal, U.S. experts are worried about North Korean trade that contravenes international sanctions.

The Korea Customs Service (KCS) announced earlier this month that three South Korean companies illegally imported North Korean coal that was transshipped at Russian ports, in violation of United Nations resolutions.

The U.N. Security Council adopted a resolution on August 5, 2017, banning North Korea from exporting coal, iron, lead and other materials. Another resolution later that year, on December 22, called for U.N. members to seize and inspect vessels suspected of transporting prohibited items. 

According to the KCS, in seven shipments between April and October of last year, three South Korean companies imported a total of 35,038 tons of North Korean coal and pig iron with a combined worth of $5.81 million.

North Korean coal on ships registered under a third country set sail either from its ports of Songlim, Wonsan, Chongjin and Daean, and the cargoes were transshipped via the Russian ports of Kholmsk, Vladivostock and Nakhodka before arriving at the South Korean ports of Dangjin, Pohang, Masan, Incheon and Donghae.

Action by Seoul

The South Korean government is now seeking the prosecution of the three companies for the illicit import of the materials and forging customs documents to state the coal and pig iron were of Russian origin. It also banned four ships – the Sky Angel, Rich Glory, Shining Rich and Jin Long – that transported the coal to South Korea from entering its ports. 

Sanctions experts said South Korea’s illegal import of banned North Korean coal is a major violation of U.N. sanctions and that the U.N. panel of experts on North Korea may want to try to further investigate the ships that transported the coal to South Korea. 

“It’s major in the sense that North Korea is very skilled at getting around sanctions,” said Robert Huish, a sanctions expert at Canada’s Dalhousie University in Halifax, Nova Scotia.  “The issue with this is that when sanctions are put in place, they are never simple because the target, which is North Korea, will always have the chance to circumvent them.” 

George Lopez, former member of the U.N. Panel of Experts for monitoring and implementing U.N. sanction on North Korea, said although he does not think the U.S. or U.N. will open a new investigation into the case, the panel of experts “may want to follow their own linkages to other sanctions violations, especially regarding particular ships and their owners and insurers.”

Lopez continued, “Their own connecting of the dots might lead to a critique of the [South Korea] customs service or an encouragement to other nations to follow this case as a model.” 

Joshua Stanton, a Washington-based attorney who helped draft the North Korean Sanctions Enforcement Act for the House Foreign Affairs Committee, thinks the U.S. or U.N. should probe the case further if there is an indication that the South Korean government knowingly committed the illegal acts.

“If the evidence shows South Korea did it willfully or that it stood by after having enough knowledge to know that the coal was North Korean, they should be sanctioned [by the U.S.],” Stanton said. “I think there are things that the U.S. law enforcement and the U.N. panel of experts can investigate and should investigate. And the fact that the South Korean government denies it, is not persuasive to me.” 

Some experts are concerned that South Korea’s illicit import could have a significant impact on the U.S. policy to apply maximum pressure on North Korea. 

“Sanctions leakage does lessen the pressure on Pyongyang,” said Troy Stangarone, senior director at Korea Economic Institute specializing in South Korean trade and North Korea, adding, “North Korea has a long history of working to evade sanctions, and it is unsurprising that some of its efforts are coming to light.”

Length of investigation

The South Korean government faced a criticism that the investigations into this case, which took over 10 months, were overly drawn out, reflecting its reluctance to enforce sanctions. 

In an interview with VOA’s Korean Service last week in Seoul, Cho Hyun, the vice foreign minister of South Korea, said the pace of the investigation reflected nothing other than a desire for accuracy.

“It took time to accurately probe the case, and following the principle of being presumed innocent until guilty, [we] could not inform [the public of the investigation] in the interim period,” he said.

Kim Yung-moon, the commissioner of Korean customs, also told VOA’s Korean Service that it took time to prove the coal was actually from North Korea.

“Because the North Korean coal entered [South Korea] after being transshipped from Russia, taking three months at times, we needed to prove that the coals were, in fact, from North Korea,” he said.

The Trump administration remains cautious about making accusations against the South Korean government for failing to enforce sanctions, stressing the importance of fully implementing U.N. sanctions. 

The U.S. Treasury Department said in an email sent to VOA last week, the “Treasury strictly enforces OFAC (Office of Foreign Asset Control) sanctions and U.N. Security Council Resolutions prohibiting illicit transactions with North Korea and works closely with our South Korean partners to continue to implement existing sanctions.” It further stated that the department does not speculate publicly on possible violations. 

In July, the State Department issued a “North Korea Sanctions and Enforcement Actions Advisory” warning that businesses “should be aware of deceptive practices employed by North Korea,” emphasizing that the OFAC has “authority to impose sanctions on any person determined to … have sold, supplied, transferred, or purchased, directly or indirectly, to or from North Korea or any person acting for or on behalf of the government of North Korea.” The advisory was distributed in five foreign languages, including Korean.

On Tuesday, the U.S. Treasury Department imposed sanctions on two Russian individuals, three companies, and six Russian-flagged ships for doing business with North Korea.

Christy Lee of the VOA Korean Service contributed to this report.
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Chilean President Sebastian Pinera said on Tuesday that his overhaul of the country’s tax structure would “modernize” Chile’s revenue system and stimulate investment by local and foreign companies.

The conservative leader said in a televised address that reform would, among other proposals, calibrate taxes paid by conventional companies with those paid by digital technology companies. The reform aims “to create a simpler and more equitable and fully integrated tax system for all Chilean companies.”

Digital commerce companies with local operations like Netflix and Uber are likely to be affected under the reform.

E-commerce is gaining traction in Latin America after a slow start. Last month, an Amazon Web Services vice president met with Pinera to discuss Amazon investing in the country as part of a longer-term regional expansion plan.

Pinera, a billionaire second-term president, whose first term as president was marred by protests over rising inequality, in June detailed a $26 billion spending plan and called for unity as Chile continues its “vigorous march towards development.”
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U.S. President Donald Trump’s administration weakened environmental controls on coal production Tuesday, overturning national regulations set by his predecessor, former President Barack Obama.

The Environmental Protection Agency said it will now allow individual coal-producing states to set their own rules for carbon emissions rather than have to adhere to an overall country-wide standard. The plan is subject to a 60-day comment period before it is finalized.

The action marks a fulfillment of a 2016 Trump campaign pledge to boost the fortunes of coal companies and coal-producing states.

It came hours before the president headed to a political rally for a Senate candidate in West Virginia, the second biggest U.S. coal production state, where he was expected to promote the plan. During his successful run for the White House, Trump supporters in coal states often held signs saying, “Trump Digs Coal.”

The EPA decision is Trump’s latest effort to topple Obama’s environmental legacy, following his withdrawal of the U.S. from the 2015 international Paris climate control accord championed by the former president.

At the time that he revoked U.S. participation in the agreement, Trump said, “I was elected by the citizens of Pittsburgh, not Paris.”

The EPA said its new rule is designed to replace Obama’s 2015 Clean Power Plan that targeted greenhouse gas emissions from coal plants and sought to shift power production away from coal to abundant natural gas supplies in the U.S., along with wind and solar energy. Trump’s EPA called the Obama rules “overly prescriptive and burdensome.”

The White House said the policy change will “significantly decrease bureaucratic red tape and compliance costs” for coal companies, “keeping American energy affordable and competitive on the world stage.”

But environmental groups immediately attacked the Trump administration edict, with the Natural Resources Defense Council calling it a “Dirty Power Plan.”

Environmental advocates said the Trump policy change, assuming some states weaken their regulations compared to the current national standards, will boost emissions from coal-fired power plants and worsen global warming.

Congressman Frank Pallone, a New Jersey Democrat, said “once again, this administration is choosing polluters’ profits over public health and safety.”
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British and European Union negotiators expressed cautious optimism Tuesday that they would reach a deal to prevent a disorderly U.K. exit from the bloc, saying talks will be intensified and take place “continuously” over the next few crucial months.

After meeting U.K. Brexit Secretary Dominic Raab in Brussels, chief EU negotiator Michel Barnier said differences remained between the two sides on future economic relations and maintaining an open border between EU member Ireland and the U.K.’s Northern Ireland.

 

Barnier said the challenge “for the coming weeks is to try and define an ambitious partnership between the U.K. and the EU, a partnership that has no precedent.”

 

Raab said there were “significant” issues to overcome, but that if both sides showed ambition and pragmatism, an agreement could be reached by October.

 

That’s the deadline the two sides have set themselves for a deal on divorce terms and the outlines of future trade, so that it can be approved by individual EU countries before Brexit day on March 29.

 

But negotiations have got bogged down amid infighting within British Prime Minister Theresa May’s divided Conservative government about how close an economic relationship to seek with the EU after Brexit.

 

Last month the government finally produced a plan, proposing to stick close to EU regulations in return for free trade in goods and no customs checks on the Irish border. But to some EU officials that smacks of cherry-picking benefits of EU membership without the responsibilities — something the bloc has explicitly ruled out.

 

Last week Latvian Foreign Minister Edgars Rinkevics put the chances of getting a Brexit deal at 50-50.

 

British businesses have warned that leaving without a deal could cause mayhem for trade and travel, bringing higher food prices, logjams around U.K. ports and disruption to everything from aviation to medical supplies.

 

A group that represents U.K. hospitals and ambulance services has said that its members may run out of drugs if Britain leaves the European Union without an agreement on future relations.

 

In a letter published Tuesday, NHS Providers said a lack of “visible and appropriate communication” from the government is hampering preparations for a so-called no-deal Brexit.

 

In a letter to National Health Service bosses that was leaked to the Times of London, the group’s chief executive said it would be more efficient to develop contingency plans nationally rather than “have to reinvent the wheel 229 times.”

 

Chris Hopson said “the entire supply chain of pharmaceuticals” could be affected by the failure to reach a deal, adding that it could also “jeopardize” the EU workforce “on which the NHS relies.”

 

The U.K. government says it remains confident of reaching a deal, but is preparing for all outcomes. Foreign Secretary Jeremy Hunt said Tuesday that the chance of no deal was “not negligible,” and that outcome would be bad both for Britain and for the EU.

 

On Thursday, the U.K. government plans to publish the first in a series of technical reports outlining the effects a no-deal Brexit would have on various sectors and offering advice to businesses and the public on how to prepare.

 
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