«Non-performing loans still a serious issue for Europe»

Valdis Dombrovskis pointed out the main challenges for the Eurozone viability. Italy the major concern, German banks with a past of risky attitude

by Emanuele Bonini

Banks in Europe «are stronger and better capitalised» than the previous years, according to the European commissioner for the Euro and the Financial stability, Valdis Dombrovskis. This means the worst is passed. Just theoretically. Risks are in fact not over at all, because of non performing loans. Non-performing loans are all those kind of credits of difficult repayment. It means that financial institutions give money to borrowers who are not in the position to give those money back, finishing to be exposed to the risk of shock due to insolvent debtors. It is not just a matter of isolated cases. On the contrary, that of non-performing loans «is a serious issue we are facing in several Member States», pointed out once again Dombrovskis. Once again because the problem is not a new one, and the story is not an unknown one.

Italy. A Member State with long-date problem is Italy. The country is «in a context of high non-performing loans», as the European Commission underlined in the latest winter economic package. The scale of risk exposure is source of concerns, since «the stock of non-performing loans has only started to stabilize and still weighs on banks’ profits and lending policies». In numbers, the sector’s gross stock of  non-performing loans stabilized only recently at around 329 billion Euro. In practice, Italy lives in «persistent uncertainty» related to the adequacy of loan loss provisions and capital buffers, given the existing high stock of non-performing loans and banks’ limited ability to absorb losses in a context of subdued profitability. Italy is the third economy of the Euro area, and spill-over effects need to be avoided, according to the European Commission, worried for the viability of the Member States. Italy was identified as having excessive macroeconomic imbalances relating to its high public debt and weak external competitiveness in a context of weak productivity growth and the high level of non-performing loans on banks' balance sheets.

CETA to harm the least developed countries

According to an analysis for the European Parliament the EU-Canada trade agreement will likely erode the economic power of poorest States, condemned to be much poorer. 

by Emanuele Bonini

It has been considered «a Trojan horse», an asymptomatic carrier of infectious diseases for the «made in», the workers' health and the national economies. Now CETA, the Comprehensive Economic and Trade Agreement between the EU and Canada, can harshly hit the developing countries. In other words the new trade deal is against the poors, according to a report from the European Parliament. Written under the request of the Committee on Development, the report pointed out that «it is likely that the implementation of mega-regional agreements will result in some preference erosion for developing countries». There is no doubt that CETA is a mega-regional agreement, so it is expectable to see the European Union and Canada trading more between themselves and less with other partners. Less business in the developing countries means to put at stake their future, and for such a reason the report suggested that the EU development assistance «should be targeted at these vulnerable countries and producers». The same report considered to recommend «a more targeted and perhaps extended programme of support» for those third countries affected by CETA».

Despite the impossibility of calculating the real impact of the new trade agreement, the European Parliament recognised side effects. The report made a distinction between the so-called ACP countries (African, Caribbean and Pacific states) and the Least Developed Countries (LDC). According to the different scenarios, losses for the ACP countries are estimated from 21.78 billion Dollars up to 50.31 billion Dollars, while for the second group of States losses range from 11.39 billion Dollars up to 16.24 billion Dollars. To put under pressure the least rich part of the world is the end of trade barriers between the EU and Canada. «CETA will have a very aggressive tariff elimination regime», making goods and products from different markets less attractive because less profitable. So, in the case of CETA analyses suggest that «there may be some preference erosion effects for developing countries, particularly those with concentrated export structures vis-à-vis the EU and those competing directly with Canada in EU markets». It's not only about that. In fact it is not clear whether such trade diversion could be offset by trade creation arising from the growth-enhancing effects of the CETA, particularly vis-à-vis the EU.

New US-EU ties searched amid European skepticism

American vice president Mike Pence tried to reassure Europe on Trump's commitments, but the counterparts didn't show enthusiasm 

Mike Pence (left) and Donald Tusk

by Emanuele Bonini

The United States of America have no intention of reconsider the engagement towards Europe, the US vice president Mike Pence said on Monday during his official visits to the EU institutions chiefs. EU leaders have been considering the new American administration as a problem for the future of the trans-Atlantic ties, and Pence was in Brussels to reassure the historic partner about the intentions and political agenda of the White House. «On behalf of President Trump I reaffirm the strong commitment of the US to continued cooperation and partnership with EU». Pence's key message was sent in the occasion of the bilateral meeting with the president of the European Council, Donald Tusk. Of course on the other side of the ocean expectations are high. «We will continue to do our part but Europe's defence requires Europe's commitment as much as it does ours», said the former governor of Indiana, resuming an issue already pointed out by Barack Obama's administration. Politically speaking, Pence was sent to Brussels to build the first diplomatic ties with the Europeans after the US electoral campaign, during which Trump's statements on the European Union generated general discontent. Concerns were raised also on the foreign affairs agenda, with Trump ready to reconsider the American approach on Russia. According to Pence's assurances, nothing is supposed to radically change. «On Ukraine the United States will continue to pursue any Russian accountable».

European leaders welcomed Mike Pence's declarations with mild optimism and some skepticism. The president of the European Parliament, Antonio Tajani, invited today to keep calm and wait the US administration when put to test. «Some positive messages come from Pence, but I believe that we have to wait some time and see what it will be done». In his opinion, it is essential to «wait in order to well understand what is the real position of the White House instead of focusing on the position of single advisors». Totally different is the opinion of Jean-Claude Juncker, the president of the European Commission, who put the new president of the United States amongst the problem of Europe. Speaking in the federal Parliament of Belgium, Juncker didn't hide what he defined «a multiple crisis», that includes «Brexit, Greece, Syria and Trump». Despite Pence's efforts, doubts and mistrust remain in Europe.

What «Orwellian» really means

Moldovan geopolitical game resumed

Pro-Russia head of State Igor Dodon in Brussels to confirm commitments taken with the EU, without forgetting traditional ties with Moscow

by Emanuele Bonini

An eye at east, another to the west. Igor Dodon's Moldova introduced itself to the European Union, in an attempt to secure the little that the former Soviet republic can obtain from the new ally. Or rather, the other partner, namely the Western one, opposed to the Eastern one. The new President of Moldova, Igor Dodon, is a pro-Russian even before being a pro-European. He thus could put in question the painstakingly relationships built between Chisinau and Brussels. Dodon has made his visit to the EU capital to meet the presidents of the three EU institutions (Jean-Claude Juncker, Donald Tusk, Antonio Tajani) and the High Representative for Foreign and Security Policy (Federica Mogherini). At each of them he reiterated its willingness to comply with the commitments foreseen by the Association Agreements, what led the eastern country to have one foot into the single market. Officially the engagement to go on is there, as well as the usual problems for the country remain. The EU has always recognized Moldova in its entirety, ie with Transnistria, the region under Russian control. This causes Moldovan leadership embarrassment when it comes to deal with the old partner. Moldova is still anchored in Russia. Before being elected new president, Dodon publicly recognised the legitimacy of Russian actions in Crimea, defined by Dodon as «part of the Russian Federation».

On foreign policy issues, the new Moldovan president doesn't seem to be on the same wavelength of the EU. For the European Union the main challenge will be to preserve relations with a country to which Europe promised as many concessions as possible. The main spoken language of Moldova is Romanian, part of the population didn't made mystery of wishing to be part of Romania, and some Moldovans would like getting a deeper European integration. There is at least a moral obligation of the EU towards this country. But the feeling is that the EU be not any longer the goal to be reached as it was in the Republic of until last December, before the new president's appointment.

FACT SHEET/ Wahhabism training in Europe

(click on the picture to enlarge)

Radical Islam growing in Belgium, agency warned

The body responsible for the national security registered the propagation of Wahhabism. Apparently Imams can't avoid it

by Emanuele Bonini

He is not alone, and he is not the only one. In Belgium there are more and more Salah Abdeslam. The Belgium-born French national of Moroccan descent and the symbol of the Paris terrorist attack of November 2015, have an increasing number of comrades. In Belgium Islamic fundamentalism is growing, the Coordinating Unit for Threat Analysis (OCAD) warned in its latest report. Islamic fundamentalism has been proliferating on the internet, and it penetrated worship places and prisons. OCAD noted in particular «a growing number of mosques and Islamic centres in Belgium, as elsewhere in Europe, under the influence of the Wahhabi Salafi missionary device». The phenomenon especially concerns Brussels, Vilvoorde, Mechelen and Antwerp, the urban zones at high Muslim presence. Wahhabism is the ultraconservative branch of Islam, totally closed to any form of modernity and strongly against the Western way of life.

Legacy of the past
Wahhabism is not new for Belgium. He officially entered into the kingdom at the end of 60's, when king Baudouin decided to give the Saudi community a place where praying. It happened in the occasion of Saudi king Faisal bin Abdelaziz's official visit to Belgium. The European country opened the door to the Sunni religious movement in exchange for oil. Radicalization started at that time, and now the situation seems to be not completely under control.
Extremists are becoming huge in number because of the web. On the internet there are a lot of recruitment channels, so many and so powerful that «moderate imams in their Mosques can't do anything in front of this media violence», according to OCAD. The Belgian authorities are working on a plan to counter radicalization: all security services have been asked to submit operational proposals, in order to put all into a draft of an integrated action plan. A Plan which doesn't exist yet. Meanwhile, extremists are increasing.

Crop-destroying worm to cause new African migrations

A new insect larvae «spreading rapidly», warned CABI. Risks of starvation and new refugees

by Emanuele  Bonini

A new migration crisis could be take place because of... A worm. In Africa there is the risk of food emergency, the non-profit organization CABI (Centre for Agriculture and Biosciences International) warned yesterday. According to the CABI experts it is proved that a crop-destroying armyworm caterpillar is now spreading rapidly across Mainland Africa, and could spread to tropical Asia and the Mediterranean in the next few years, becoming a major threat to agricultural trade worldwide. This kind of worm belongs to a very dangerous specie: it mostly affects maize (corn) but it has been recorded eating more than 100 different plant species, causing major damage to economically important cultivated grass crops such as maize, rice, sorghum and sugarcane as well as other crops including cabbage, beet, peanut, soybean, alfalfa, onion, cotton, pasture grasses, millet, tomato, potato and cotton. A plague of suspected armyworms destroyed 2000 hectares of crop fields in Malawi and was spreading at «alarming rates», while in 2016 first signs of a potential problem where registered in Ghana, in the Gulf of Guinea region.

CABI called to immediate actions. «Following earlier reports from Nigeria, Togo and Benin, this shows they are clearly spreading very rapidly», pointed out CABI Chief Scientist, Dr. Matthew Cock. Without countermeasures Africa risks to be further destabilized and the theatre of new more global issues. «Urgent action will be needed to prevent devastating loses to crops and farmers’ livelihoods». Economic damages will create unrest, social problems and a new wave of migration. The story is well know in Europe, or so should be. The Irish Great Famine is there to recall what has to be avoided. In that case migration was just one of natural consequences. The fact now the problem is not in Europe is not enough to remain indifferent. It would be unfair, and blind too. People in starvation will come soon or late to Europe claiming for a loaf of bread. If not for love, western and European countries have the duty of intervene. Otherwise new tragedies and new migrants will come.

EU at risk of a new migration crisis

Both the president of the European Council and the commissioner responsible for Migration called for actions before spring arrival

by Emanuele Bonini

A new migration crisis can not be ruled out. On the contrary, it is something that is quite likely next to come. The EU leaders look at refugees with concern because of the division within the Member States, of course, and because of a phenomenon which is far, far away, to be under control. «Migratory crisis is not over», warned the European Commissioner for Migration and Internal affairs, Dimitri Avramopoulos. «There is still a lot to do», as figures show. In 2016 more than 1,2 million people applied for asylum in the EU, and 181,436 people reached the Italian coasts. These are «unprecedented numbers», and the situation could worsen. «Flows are at a record level, and spring is approaching fast», stressed the president of the European Council, Donald Tusk, in the letter sent to the leader of the Member States ahead of the Malta summit.What Tusk wrote is nothing but a warning: once the good season will come, the Mediterranean sea will be theatre of new exodus.

Figures are at record level, and the instability in the southern Mediterranean region can make them even higher. «The situation on the ground requires immediate and urgent action, with and around Libya», where the vast majority of irregular migrants depart from, recalled Tusk. The European Union can't act beyond the international waters, and a political solution is then needed in order to stabilise Libya, something considered now in Brussels as «more important than ever». EU players are aware of the gravity of the situation. When it comes to migration, «2017 is a crucial year», stressed Avramopoulos, who recall Member States to show solidarity and act to find a common solution to what has to be treated as a common challenge. But EU players means above all the head of State and government. It's them who have to work together to set a real and genuine migration policy. This is just one of the main item in a political agenda containing huge issues - such as Brexit, French and German elections - which will test the viability of the EU. There is no much time remained: facts are needed. The alternative is another migration crisis. From Brussels just came a last recall.