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EU Leaders Agree to $859 Billion Coronavirus Relief Package Under Larger Economic Budget Deal

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  • After talks ran long at a European Union summit, EU leaders agreed to a massive $859 billion stimulus plan which will address economic impacts from the coronavirus.
  • The plan will provide a mix of grants and loans over the next four years to help businesses recover, roll out new measures to reform economies, and invest in protecting against “future crises.”
  • The original plan would have provided more grant money to struggling countries, but richer nations rejected that idea and only agreed to the current plan after an additional series of concessions.
  • Those concessions include cuts made to projects covering health, refugees, and the climate.

What’s in the Deal?

The European Union agreed to a massive $859 million stimulus package on Monday meant to address the economic crisis caused by the COVID-19 pandemic.

The package is part of a $2.1 trillion budget the EU approved for 2021-2027. While $1.3 trillion of that goes directly to the EU’s budget and is part of its normal negotiations every seven years, the portion provided for coronavirus relief is quite extraordinary. 

In fact, this package is so important that it’s expected to help Europe avoid what could be its worst economic blow since World War 2.

According to the final agreement, the package will largely be spent over the next four years and will include both loans and grants that will be sent to member nations. It will also focus on providing funding in three main ways: helping businesses recover, rolling out new measures to reform economies, and investing in a goal to protect against “future crises.”

German Chancellor Angela Merkel said she had “no regrets” on the concessions given to reach an agreement, saying, “We think we’ve acted responsibility in agreeing to these compromises,”

Others, however, were less pleased, and one anonymous official described the agreement as a “bittersweet victory” because, in order to reach a compromise, cuts were made to projects covering healthcare and refugees. The finished deal also doesn’t include expenditure on many research and climate projects.

Long Road to Reaching This Deal

While EU leaders have lauded the passage of the deal, the process of reaching an agreement was tedious at best. 

For one, talks ran long. The summit to discuss the package began on Friday and was only scheduled to last through the weekend, but it ended up stretching into Monday.

That’s because a number of rich, northern countries known as the “Frugal Four” slowed down those talks after opposing the EU’s original plan. The “Frugal Four” include the Netherlands, Denmark, Austria, and Sweden. Over the weekend, Finland also allied with their opposition to the original plan.

That plan would have allocated €500 billion in grant money, meaning the “Frugal Four” would have had to pay in more as net contributors to the EU.

Their main objection was over how much should be given to countries like Italy and Spain—countries that have been hit inordinately hard by the coronavirus. They also questioned how much control those countries should have over how the funds distributed to them will be spent. 

During the summit, Dutch leaders argued that Italy and Spain were to blame for struggling to recover because they had other economic difficulties prior to the pandemic. The Dutch then added that they did not want to send money to those countries without guarantee that such a move would provide economic reform to the EU in the long run.

Much of the specifics of the debate boiled down to two questions: How much should be given in grants, and how much should be given in loans? 

More grant money, for example, would mean less debt for countries receiving aid as they wouldn’t have to repay the money given to them. On the other hand, countries would be expected to repay loans. 

After denouncing the original plan, the “Frugal Four” returned with a counter-offer that proposed only handing out €375 billion in grants.

The situation in itself was already quite unique. Typically, in times of crisis, the EU has only offered loans. Still, Spain argued that the EU couldn’t afford to give out less than €400 billion in grants for this specific emergency. 

As a basis for that argument, it said that any failure to reach an agreement would result in a “two-speed” economic recovery, with richer countries bouncing back faster than struggling countries. In turn, Spain stressed that such a failure would place further strain on the EU as a whole. 

From there, European Council President Charles Michel proposed a compromise of €390 billion in grant money ($446 billion USD).

The rest of that overall $859 billion would then go to low-interest loans.

Notably, the compromise also included billions in rebates to the “Frugal Four” for their contribution and with that, the four agreed to the deal. 

EU Leaders Praise the Deal

Michel described the agreement, which was the single-biggest joint borrowing plan ever agreed to by the EU, as the first time that EU member countries were “jointly enforcing our economies against the crisis.”

“We did it! We have reached a deal on the recovery package and the European budget,” he said. “This is a strong deal. And most importantly, the right deal for Europe right now.” 

French president Emmanuel Macron describing the deal as a “historic day for Europe.” 

Hard hit countries like Spain, Italy, and even Portugal also appeared to be content with the final grant figure.

“While it’s true that it could have had a slightly bigger dimension, the recovery plan is robust enough to respond to the current estimates of the coronavirus crisis,” Portuguese Prime Minister António Costa said. 

See what others are saying: (The Washington Post) (CNN Business) (BBC)

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Tunisian President Fires Prime Minister, Suspends Parliament Over Deadlock and COVID-19 Response

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President Kais Saied claims his actions are constitutional and have the support of the military, which has already blocked off government buildings. His opponents, however, call the move little more than a coup.


President Makes Massive Changes to Government

Tunisia’s government received a major shakeup after President Kais Saied fired the Prime Minister and froze parliament late Sunday.

The move, according to Saied, was meant to break years of parliamentary deadlock between Prime Minister Hichem Mechichi and various political parties that have sturggled to find common ground. However, the timing comes just after a massive protest over how the government has handled the COVID-19 pandemic turned violent earlier on Sunday.

Either way, the move risks sparking a confrontation between Saied —who is backed by the army — and various political parties that view his actions as a coup.

The President’s actions have proven cotnroversial. Despite that, he has widepsread support after being elected in 2019 on a platform to fight corrupt politicians.

After the announcement, tens of thousands have taken to the streets in support of his decision to dismiss the Prime Minister and parliament, with many cheering as he appeared among the crowd Sunday night.

In recent months, anger at the ruling government has only increased as many feel the ruling coalition, largely made up of the Islamist Ennahda (“Renaissance”) party, have been ineffective.

It’s a common belief in Tunisia that Ennahda’s rule, alongside its tenuous coalition, helped exacerbate problems caused by the COVID-19 pandemic, which led to the economy shrinking by 8% as tourism plummeted.

One of the President’s supporters told Reuters and other outlets during Sunday’s demonstration, “We are here to protect Tunisia. We have seen all the tragedies under the rule of the Muslim Brotherhood.”

He mentioned the Muslim Brotherhood, which had a strong presence in Egpyt after the Arab Spring, becuase Ennahda has longstanding relationship with the group, although it has sought to distance itself as a more moderate political group over the last few years.

Now, for their part, the ruling coalition has argued that Saied’s move is clearly unconstitutional. Rached Ghannouchi, leade of Ennahda and Parliamentary Speaker, said that he is “against gathering all powers in the hands of one person.” His position isn’t without supporters eithers. Both sides have already gathered throughout the capital and have thrown rocks at each other.

Legalities of Article 80

The question across many minds is whether or not Saied’s actions are actually constitutional.

He claims that under Article 80 of the constitution, he can fire the Prime Minister, suspend parliament for 30 days, and appoint a premier to rule — all of which is true.

However, in order to do that, the Prime Minister and the Parliamentary Speaker need to be consulted; something Parliamentary Speaker Ghannouchi said was never done. It’s unclear what Mechichi’s position is as he’s stayed inside his home all day, though the army says he is not under any kind of arrest.

In addition to those requirements, a Constitutional Court needs to approve the move, and one hasn’t been set up. As the German Foregin Office put it on Monday morning, it seems like Saied is relying on “a rather broad interpretation of the constitution.”

International observers hope a solution will soon be made to keep what seems to be the last functional democracy to come from the Arab Spring from devolving into civil war or dictatorship.

See what others are saying: (The Washington Post) (Reuters) (BBC)

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South Korean President Makes BTS Official Presidential Envoys

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The position is largely ceremonial but will be used by the government to help give a friendly and popular face to national and international initiatives spearheaded by Seoul.


Government Recognition

The K-pop band BTS will be adding to its list of global impacts this year after South Korean President Moon Jae-in appointed its members as Presidential Envoys on Wednesday.

The role will include attending international conferences such as the United Nations General Assembly in September.

At these events, BTS will perform “various activities to promote international cooperation in solving global challenges, such as improving the environment, eliminating poverty and inequality, and respecting diversity,” according to Park Kyung-mee, a Blue House spokesperson.

The band has already appeared at U.N. conferences multiple times over the last few years.

Just last year, the group gave a message of hope and reassurance through the U.N. during the COVID-19 pandemic. Prior appearances at the U.N. have been either as part of U.N. organizations or as private citizens.

Wednesday’s appointment will make them official representatives of South Korea, although they won’t actually engage in any direct diplomacy and instead will be used to promote the country’s ongoing efforts in youth-related projects.

Longstanding Policy

BTS’ success, alongside prior and current K-pop groups, has remained a masterclass of soft diplomacy by the Korean government. For decades, the Korean government has cultivated promoting cultural aspects abroad in the hopes of generating more interest in the country. There are hopes that such efforts will encourage more tourism as well as an elevated image when consumers consider Korean-made products.

Such efforts, beyond cultivating K-pop and raising its stars as semi-official government symbols, also include helping fund Korean restaurants abroad as well as free Korean-language classes taught by Professors of some of Korea’s most prestigious schools.

The news comes as BTS’ newest single, “Permission to Dance,” quickly took the #1 spot on the Billboard top 100. BTS is also partnering with YouTube to promote a Permission to Dance challenge on YouTube Shorts that will begin tomorrow and end on August 4.

Fans will be encouraged to replicate dance moves from the music video, and the group’s favorite clips will be put into a compilation made by them.

See what others are saying: (Yonhap News) (The Korea Times) (All Kpop)

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Over 1 Million Chinese Displaced After Record Rainfall

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The rain has created waist-high waters throughout the capital of China’s Henan province, drastically affecting the lives of its over 10 million inhabitants.


Trapped in a Flood

The Henan province of central China experienced severe rainfall over the last week that has left at least 25 dead and displaced more than 1.2 million people due to severe flooding, according to figures released by Chinese authorities Wednesday.

Meteorologists claim that the sudden, severe rainfall is caused by Typhoon In-Fa colliding with a high-pressure system over Henan province.

The floods have forced people to wade through waist-high water throughout Zhengzhou, the region’s capital. In one tragic incident Monday, 12 people died after they were trapped in the subway amid rising waters. A similar situation occurred Tuesday, causing multiple lines to be trapped in chest-high water for up to three hours before rescue workers managed to save them. Since then, metro authorities have shut down many of Zhengzhou’s rail lines.

Between Monday and Tuesday alone, Zhengzhou was hit with an estimated 25 inches of rain, equating to about 87% of its average annual rainfall. At one point, seven inches of rain occurred in less than an hour.

In an effort to alleviate rising waters, authorities breached a nearby dam to release floodwaters on Tuesday, although it’s unclear how much that helped as many dams and rivers in the region have overflowed for days.

Elsewhere in Henan, villages have been cut off by landslides and flooding, killing at least four others and leaving some areas without power for more than 24 hours.

Long Recovery Ahead

The region was finally able to begin recovery efforts Wednesday as conditions have begun to die down.

Despite reduced rainfall, the situation has still proven to be dire, leading President Xi Jinping to issue a statement through state media ordering authorities to give top priority to people’s safety and property.

In total, more than 17,000 firefighters have been mobilized for rescue efforts, as well as local volunteers and other rescue crews from other provinces.

Chinese companies have rushed to donate money to help the affected communities, and so far over $300 million has been donated.

It’s likely that for some time, hundreds of thousands in the region will be left without homes as authorities begin the work of ensuring that buildings are safe to return to.

See what others are saying: (South China Morning Post) (BBC) (The New York Times)

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