Category: Economy

  • The US excludes the last major Russian state bank from SWIFT

    The last of Russia’s major state-owned banks, which retains access to the SWIFT system for international payments in the world’s major currencies, will become subject to new US sanctions.

    The White House is considering blacklisting Gazprombank, the Russian Federation’s third-largest bank by assets, which is a “hub” for gas payments with Europe. As the Nikkei reported, citing officials familiar with the matter, GPB could be subject to blocking sanctions: it would be barred from any transactions with US banks. A decision on sanctions will be made by the end of November – the United States has notified its G7 partners about this, sources told the publication, including high-ranking European officials.

    Directly owned by Gazprom with a third and another 40% by its pension fund, Gazprombank is not yet subject to strict Western restrictions: in the United States it is only prohibited from raising capital on the debt market, although its top managers and a subsidiary are subject to blocking sanctions IT company. In the European Union, GPB also avoids blacklists, and only Britain has introduced blockers against the bank.

  • Fintech Boom Drives Financial Inclusion in Africa, Yet High Funding Costs Block Climate and Digital Progress

    In a newly released report, the European Investment Bank (EIB) reveals that Africa’s fintech sector has nearly tripled in size since 2020, bringing vital financial services to underserved communities across the continent. However, the report, Finance in Africa 2024, also underscores significant barriers to growth: high funding costs and limited capital, which are hindering Africa’s climate and digital transitions.

    “Fintech is revolutionizing the way we think about finance in Africa,” noted EIB Vice-President Thomas Östros. “By leveraging technology, we can improve access to finance for millions and foster sustainable economic growth.”

    The rapid expansion of digital finance solutions is shifting the African financial landscape, with fintech firms multiplying from 450 in 2020 to 1,263 in early 2024. This boom is increasing access to credit, particularly benefiting small businesses and marginalized populations, according to the EIB’s ninth annual Banking in Africa survey.

    While digital solutions flourish, traditional banking in Africa faces considerable challenges. About one-third of African banks reported a lack of capital and cited funding costs as obstacles to growth. These constraints contribute to Africa’s declining private-sector credit, which fell from 56% of GDP in 2007 to 36% in 2022, stalling progress in industrialization and economic resilience.

    EIB Chief Economist Debora Revoltella emphasized the urgency of addressing these challenges to unlock Africa’s potential. “While we see some signs of improvement, the high cost of finance remains a source of concern. As we navigate the dual challenges of climate change and digital transformation, the role of multilateral development bank lending is even more relevant in supporting sustainable growth on the continent.”

    The report highlights Africa’s heightened vulnerability to climate change, with 34% of surveyed banks noting asset quality deterioration due to extreme weather events. Small and medium enterprises (SMEs) are particularly affected, as climate-related risks undermine their resilience and creditworthiness. Revoltella’s call to action underscores the need for financing models that can absorb climate risks while fostering economic growth.

    Gender-sensitive lending is another notable trend identified in the report. Nine out of 10 banks across Africa are considering or implementing a gender strategy, encouraged by data showing better loan performance among women-led businesses. Nearly 70% of banks reported lower rates of non-performing loans for women-owned firms, and 17% plan to introduce a dedicated gender strategy to expand this promising avenue.

    Economic conditions in Africa are gradually improving, with sovereign bond yields falling, giving several nations renewed access to international bond markets. However, the EIB Financial Conditions Index still shows overall financial conditions as restrictive, posing challenges to private-sector growth.

    The EIB Global, a division dedicated to international partnerships, seeks to bridge these financial gaps by supporting sustainable investment in Africa. Through initiatives such as Global Gateway, EIB Global aims to mobilize €100 billion in investment by 2027, with a particular focus on digital infrastructure and climate resilience.

    The Finance in Africa 2024 report offers a comprehensive analysis of both the opportunities and the structural challenges facing Africa’s financial sector. As fintech continues to transform the region’s financial services, the EIB’s report underscores that easing financial barriers and investing in climate adaptation are essential steps toward a sustainable and inclusive economic future in Africa

  • The European Union and Morocco: Navigating Trade Relations and Geopolitical Issues

    The European Union and the Agreements with Morocco: An In-Depth Analysis of Recent Developments

    The European Union (EU) has recently taken crucial decisions regarding its fisheries and agriculture agreements with Morocco, a matter that raises complex economic, political and legal issues. These agreements, which allow European vessels access to Moroccan waters and facilitate the import of Moroccan agricultural products into the European market, are essential for both parties. However, they are also marked by tensions linked to the Western Sahara issue.

    Legal background to the agreements

    The fisheries and agriculture agreements between the EU and Morocco have been renewed several times since they were first signed. However, their legitimacy has been called into question, notably following rulings by the Court of Justice of the European Union (CJEU). In 2016, the CJEU annulled a fisheries agreement, arguing that it failed to comply with international law, particularly with regard to the rights of the Saharan people. The Court stressed that the resources of Western Sahara cannot be exploited without the consent of its people, leading to a re-evaluation of existing agreements.

    Morocco’s position and international support

    Morocco has championed an autonomy initiative for Western Sahara, proposing a solution that would allow the territory to enjoy a degree of autonomy while remaining under Moroccan sovereignty. This initiative has received the support of over 100 nations, including major geopolitical players such as the United States, France, the United Arab Emirates, Israel, Germany and Spain. This international support is crucial for Morocco, as it strengthens its position on the international stage and enables it to legitimize its actions regarding the Western Sahara.

    Morocco maintains that the proposed autonomy is the best solution for ensuring stability and development in the region. The Moroccan authorities maintain that this initiative could encourage dialogue and cooperation between the various stakeholders, while guaranteeing respect for the rights of local populations.

    Reactions from the Polisario Front

    In contrast, the Polisario Front, which claims independence for Western Sahara and is supported by Algeria, advocates a referendum on self-determination for the Saharan people. This position has historically enjoyed some international support, but is currently less popular in the current geopolitical context.

    The difficulties of implementing a referendum are manifold. Analysts point out that issues such as voter registration, factional tensions and security concerns make it a complex option. Moreover, international support for the Polisario Front has waned in recent years, further complicating its position.

    Economic consequences of the agreements

    The fisheries and agriculture agreements are of vital importance to the Moroccan economy. The fishing industry, in particular, is an essential source of income and employment, especially in coastal regions. Access to the European market enables Moroccan fishermen to sell their products at a competitive price, while meeting the growing demand for seafood products in Europe.

    At the same time, the agricultural agreement also opens up opportunities for Morocco to export agricultural products, promoting the development of Moroccan agriculture. For the EU, these agreements guarantee a stable supply of food products while supporting sustainable fishing, which is crucial in the context of growing concerns about food security in Europe.

    Future challenges

    The challenges facing the EU and Morocco are many. The need to reconcile economic interests with the requirements of international law and humanitarian concerns is paramount. The situation in Western Sahara continues to be a sticking point influencing EU negotiations and decisions.

    The EU seeks to maintain advantageous trade relations with Morocco while respecting the principles of international law. The complexity of this situation calls for continuous and constructive dialogue between the various parties, in order to find lasting solutions that are acceptable to all.

    Future prospects

    In the future, the EU may consider modifications to its agreements to ensure their compliance with international legal standards while safeguarding its economic interests. Enhanced dialogue between the EU and Morocco will be essential to navigate these complexities. Morocco’s international support could also play a key role in future discussions, influencing EU decisions.

    In summary, the EU’s decision on fisheries and agriculture agreements with Morocco represents a delicate balance between economic interests, legal considerations and humanitarian issues. Future discussions will need to take these various aspects into account to achieve sustainable solutions, while recognizing the international context that shapes this dynamic. The future of EU-Morocco relations will depend on the ability of both parties to overcome current challenges and cooperate constructively for the development of the region.

  • “Floating gas stations” in front of Bulgarian ports sell Russian fuel to passing ships

    Two Russian tankers “Nikolay Velikiy” and “Nikolay Gamayunov” were refueling ships leaving the ports of Varna and Burgas on the border of Bulgaria’s 24-mile contiguous zone in the Black Sea. Risky offshore fueling was probably motivated by dumping prices, which were achieved after taxes and excise duties were not charged on the fuel sold.

    This was shown on several reports of companies working in the field of ship agency. A large part of them work as intermediaries for the only company in the country that trades in marine fuel – “Lukoil – Bulgaria Bunker” EOOD.

    Illustration: The ship “Nikolay Velikiy (the Great)” on September 16, 2024 in position near Cape Shabla (Screenshot from the Vessel Finder system).

  • The 10 Most Influential Books on the European Economy: A Deep Dive into Their Legacy

    Economic thought in Europe has shaped, and been shaped by, centuries of political and social transformation. This article explores ten landmark books that have defined how we think about Europe’s economy, blending intellectual depth with practical relevance. Each entry delves into the book’s significance, themes, and impact, offering an engaging narrative for readers keen to understand the forces driving Europe’s economy.

    1. Capital in the Twenty-First Century

    Author: Thomas Piketty
    Publication Year: 2013
    Publisher: Éditions du Seuil (French Edition); Harvard University Press (English Edition, 2014)
    Language: Originally in French; translated into multiple languages, including English.

    Thomas Piketty’s Capital in the Twenty-First Century became a global sensation upon release, sparking debates from academic halls to political offices. Piketty meticulously analyzes historical data on income and wealth distribution, painting a striking picture of inequality in Europe and beyond. His central thesis? Over time, wealth tends to concentrate in fewer hands unless actively countered by policies such as progressive taxation. The book’s groundbreaking use of data spanning centuries demonstrates how Europe, particularly after the Industrial Revolution, became a stage for widening inequality. Piketty’s accessible writing, despite the complex statistical analysis, makes it a touchstone for understanding the socio-economic dynamics of modern Europe.

    2. The Euro: How a Common Currency Threatens the Future of Europe

    Author: Joseph E. Stiglitz
    Publication Year: 2016
    Publisher: W.W. Norton & Company
    Language: English

    Joseph Stiglitz, a Nobel laureate in economics, dives into the contentious world of the euro. Published in 2016, Stiglitz’s work critiques the design flaws of Europe’s common currency, arguing that it exacerbates economic disparities between member states. For instance, the rigid monetary policies of the eurozone prevent struggling economies like Greece from devaluing their currency to regain competitiveness. Stiglitz also discusses how political motivations, rather than sound economic reasoning, drove the euro’s creation. His proposed solutions, such as creating a “flexible euro” or allowing countries to leave the union without catastrophic fallout, offer provocative alternatives to Europe’s current monetary framework. The book is a sharp, yet balanced, critique of one of Europe’s most ambitious projects.

    3. Austerity: The History of a Dangerous Idea

    Author: Mark Blyth
    Publication Year: 2013
    Publisher: Oxford University Press
    Language: English

    Mark Blyth’s Austerity couldn’t have come at a better time, arriving amidst debates over austerity measures in the wake of the 2008 financial crisis. In this compelling and combative book, Blyth traces austerity’s origins back to 18th-century Europe, demonstrating how it has been repeatedly implemented as a panacea for economic crises. His historical approach is particularly enlightening when analyzing post-crisis Europe, where nations like Greece and Spain were forced into harsh austerity policies that deepened social and economic pain. Blyth doesn’t just critique; he highlights the political motivations behind austerity, exposing how it often serves elite interests at the expense of broader economic health. It’s both a history lesson and a rallying cry for more equitable economic policies.

    4. Europe Since 1989: A History

    Author: Philipp Ther
    Publication Year: 2014
    Publisher: Suhrkamp Verlag (German Edition); Princeton University Press (English Edition, 2016)
    Language: Originally in German; translated into English.

    Philipp Ther’s Europe Since 1989 is an essential read for understanding the transformation of Europe after the fall of communism. Ther chronicles the rise of neoliberal economic policies across Eastern and Western Europe. He discusses how these policies led to profound social changes, from privatization drives in the East to the erosion of welfare systems in the West. What sets Ther apart is his focus on the human cost of these transformations—he vividly illustrates how economic liberalization often created winners and losers, leaving large swathes of Europe’s population disillusioned. This book is as much about the people of Europe as it is about the policies shaping their lives.

    5. The Road to Serfdom

    Author: Friedrich A. Hayek
    Publication Year: 1944
    Publisher: Routledge Press
    Language: English

    Friedrich Hayek’s The Road to Serfdom is a classic that remains as provocative today as it was upon its publication in 1944. Written during World War II, Hayek argues that centralized planning and government overreach, even with good intentions, inevitably lead to tyranny. Though focused on the dangers of socialism, his warnings extend to Europe’s mixed economies. In the post-war European context, the book became a cornerstone of economic liberalism, influencing policymakers who sought to rebuild Europe on free-market principles. Critics have often accused Hayek of exaggerating his claims, but there’s no denying the book’s influence on shaping European economic thought in the latter half of the 20th century.

    6. Why Nations Fail: The Origins of Power, Prosperity, and Poverty

    Authors: Daron Acemoglu & James A. Robinson
    Publication Year: 2012
    Publisher: Crown Business
    Language: English

    While Why Nations Fail isn’t solely about Europe, its insights are crucial for understanding the continent’s economic disparities. Acemoglu and Robinson argue that inclusive institutions—those that provide broad participation in economic and political life—are the key to prosperity. They use examples like the Industrial Revolution in Britain and the divergence between Western and Eastern Europe to illustrate how institutions shape economic trajectories. The book is an intellectual journey through history, filled with case studies that resonate deeply with Europe’s current challenges, from inequality to the rise of populism.

    7. The European Economy Since 1945: Coordinated Capitalism and Beyond

    Author: Barry Eichengreen
    Publication Year: 2007
    Publisher: Princeton University Press
    Language: English

    Barry Eichengreen’s The European Economy Since 1945 is a masterclass in economic history. Eichengreen examines Europe’s extraordinary recovery from World War II, focusing on the role of “coordinated capitalism,” where governments, businesses, and labor unions worked together to rebuild economies. He explains how this model laid the groundwork for the European Union but also how it struggled to adapt to globalization and the financial crises of the 21st century. The book’s detailed analysis of policies like the Marshall Plan and the creation of the euro makes it essential reading for anyone interested in the forces that shaped modern Europe.

    8. European Integration: A History of Nations and Borders

    Author: Peter Gowan
    Publication Year: 2004
    Publisher: Verso Books
    Language: English

    Peter Gowan’s European Integration explores the economic and political motivations behind Europe’s push for unity. Gowan argues that economic integration was as much about containing Germany’s power as it was about fostering prosperity. The book takes readers through milestones like the Treaty of Rome and the Maastricht Treaty, offering a critical perspective on the compromises and tensions inherent in the EU’s development. Gowan’s writing is both analytical and accessible, making complex economic theories understandable without oversimplifying.

    9. The Wealth of Nations

    Author: Adam Smith
    Publication Year: 1776
    Publisher: W. Strahan and T. Cadell
    Language: English

    Few books have shaped the world as profoundly as Adam Smith’s The Wealth of Nations. Though written in the 18th century, its analysis of markets, competition, and the division of labor laid the foundation for modern economics. Smith’s exploration of Europe’s economic systems remains relevant today, offering insights into everything from trade policies to labor markets. While dense in places, the book’s enduring wisdom continues to inspire economists and policymakers alike.

    10. Europe Reborn: A History of European Unity, 1945–2000

    Author: Harold James
    Publication Year: 2001
    Publisher: Longman Publishing Group
    Language: English

    Harold James provides a sweeping history of Europe’s journey toward unity in Europe Reborn. Beginning with the devastation of World War II, James traces the economic and political initiatives that led to the formation of the European Union. He highlights the role of economic policies like the Common Agricultural Policy and the euro in fostering integration, while also addressing the cultural and political challenges along the way. James’s balanced approach makes this book a definitive account of Europe’s post-war transformation.

    Final Thoughts

    These ten books illuminate the complex and fascinating evolution of Europe’s economy, each offering unique insights into its successes, failures, and enduring challenges. Whether through historical analysis, theoretical exploration, or policy critique, these works collectively provide a rich tapestry of thought on Europe’s economic landscape.

  • Triple increase in the fee that Turkish citizens pay when going abroad

    The fee for traveling abroad, which Turkish citizens pay, is increased from 150 to 500 Turkish lira (about 14 euros). The Ordinance was published in the issue of the Turkish State Gazette (Resmi Gazete) dated August 2, 2024.

    The fee for going abroad is a type of tax that must be paid by every Turkish citizen over the age of 7 when going abroad.

    Inflation in Turkey, which was 71.6 percent in June, once again hit the pockets of Turkish citizens. Compared to 2022, the fee for going abroad has risen by 233 percent, according to the newspaper “Birgun”. This will put a heavy burden on families’ budgets when they travel abroad with children over 7 years old.

    The fee for going abroad in the amount of the then 100 dollars was introduced in 1963 by a decision of the Council of Ministers and applied until 1996, when it was abolished. In 2001, it began to be applied again, and its amount was 50 dollars. Since 2007, it has been 15 pounds. After 12 years of implementation, in 2019 the amount of the fee was increased to 50 Turkish lira.

    In March 2022, by decree of President Recep Tayyip Erdogan, the fee was increased to 150 Turkish lira.

    The latest increase was proposed by Treasury and Finance Minister Mehmet Simsek. According to media reports, the proposal was to make the fee 3,000 Turkish lira (about $90 or 83.50 euros), but that proposal sparked strong protests, including among the ruling Justice and Development Party, and was dropped.

    According to official data, the revenue from fees for going abroad in 2023 was 1 billion 311 million Turkish lira. From the beginning of this year to the month of April, the revenue from the fee is in the amount of 427 million Turkish lira.

    Fifteen Turkish liras of the fee are paid to TOKI – the State Agency for Housing Construction.

    Turkish citizens holding dual citizenship are exempt from paying the fee.

    The application of the new regulation entered into force on August 12 of this year.

    Illustrative Photo by Enes Akdoğan: https://www.pexels.com/photo/a-black-and-white-photo-of-money-in-a-glass-jar-28184340/

  • Russians or Russian companies have shares in nearly 12,000 companies in Bulgaria

    Russian citizens or Russian companies participate in 11,939 companies in our country. This is clear from the answer of the Bulgarian Minister of Justice Maria Pavlova to a question posed by the parliamentarian Martin Dimitrov. He asked about the number of companies in Bulgaria in which Russians participate or Russian companies with a share of more than 40%.

    The information provided by Minister Pavlova is based on the data in the Information System of the Trade Register and the Register of Non-Profit Legal Entities, “Focus” reported. The inspection concerns the participation of individuals or legal entities in limited liability companies, sole proprietorships and sole proprietorships.

    7118 companies in our country are owned by Russian individuals or legal entities. 4,659 Russians participate with a share of over 40% in companies in Bulgaria. There are 162 companies in which a Russian citizen is registered as the actual owner.

    The question of the national representative was provoked by the published statistics of the agency Moody’s that Bulgaria is in second place in the European Union in terms of companies with Russian connections.

    Illustrative Photo by Kiril Gruev: https://www.pexels.com/photo/surva-festival-in-pernik-at-the-end-of-the-year-the-days-between-christmas-and-jordan-s-day-the-6th-of-january-yordanovden-are-called-dirty-days-it-is-the-coldest-and-darkest-time-15045130/

  • Why Namibia plans to kill over 700 wild animals

    Namibia plans to cull 723 wild animals, including 83 elephants, and distribute the meat to people struggling to feed themselves due to a severe drought in South Africa, the environment ministry has ruled.

    The culling will take place in parks and public areas where authorities believe the number of animals exceeds available pasture and water supplies. South Africa is facing its worst drought in decades, with Namibia depleting 84 percent of its food reserves last month, according to UN figures. Almost half of Namibia’s population is expected to experience hunger problems in the coming months.

    With such a severe drought, human-wildlife conflicts are expected to increase if authorities do not intervene. “To this end, 83 elephants from identified conflict zones will be killed and the meat distributed to the drought relief programme,” it said in a statement.

    The country also plans to cull 30 hippos and 60 buffalo, as well as 50 impala, 100 wildebeest, 300 zebra and 100 eland.

    157 animals have already been captured by professional hunters and companies hired by the government, with more than 56,800 kilograms of meat harvested.

    “This is necessary and in line with our constitutional mandate where our natural resources are used for the benefit of the citizens of Namibia,” Reuters quoted the environment ministry as saying.

    More than 200,000 elephants are estimated to live in a protected area spread across five southern African countries – Zimbabwe, Zambia, Botswana, Angola and Namibia – making the region home to one of the largest elephant populations in the world.

    Illustrative Photo by Vik Joshi: https://www.pexels.com/photo/hippopotamus-lying-near-the-river-8150826/

  • Bulgaria is selling dollar bonds for the first time in over 20 years

    The caretaker government aims to cover 1.5 billion euros worth of bonds maturing next week

    Bulgaria will offer US dollar-denominated bonds for the first time in 22 years as it tries to plug its budget deficit and pay off maturing debt amid a prolonged political crisis, Bloomberg reports.

    The country will offer 12-year dollar-denominated securities as well as euro-denominated bonds with maturities of 8 and 20 years in a deal that can be priced as early as today (August 28), the agency noted, citing to a familiar source. BNP Paribas, Citigroup, ING Groep NV and UniCredit are managing the deal.

    Bulgaria is gearing up for another snap election in October, the seventh in three and a half years, as political parties have failed to form a stable majority coalition. The caretaker government appointed on Tuesday aims to cover 1.5 billion euros ($1.7 billion) in bonds maturing next week and finance a planned budget deficit of 3 percent of gross domestic product.

    Initial price talks were about 165 basis points above the mid-swap for the 8-year euro-denominated bond, 220 b. p. above the midpoint for 20-year bonds in euro and 170 b. t. above the midpoint for 12-year dollar bonds, said the source, who requested anonymity because he is not authorized to speak publicly.

    The government can sell new debt for a total of 10 billion leva ($5.7 billion) in the next 4 months, according to this year’s budget, after already issuing 1.7 billion leva on the domestic market. Two previous governments this year did not tap into international markets.

    Illustrative Photo by Karolina Kaboompics: https://www.pexels.com/photo/dollar-banknote-on-white-table-4386155/

  • Albania builds airport for over 103 million Euros to attract tourists

    Despite the fact that there is a 450-kilometer-long road strip, which is a wild occasion, Albania is protected by the destination of the flights and the Albanians this.

    Often compared to the Maldives, thanks to its crystal-clear waters and peaceful beaches, Albania is not as dirty as the rest of the world, or at least not to the public including Spain, Greece and Italy.

    The group from Southeast Europe is working to increase the level of typism. Albania hopes to increase its total annual number of visitors to five times from the current target of 2.8 million, writes Ehrres.so.

    The target of 14 million readers would be a four million increase, compared to the 10 million readers reported for 2023. To increase its appeal, Albania is betting big. The city is building an entirely new airport for 103.3 million euros in order to make it more convenient for the typists to visit it.

    The international airport in the Albanian city of Bljepa should be put into operation by the end of 2025 a year, although it has been planned for a long time. The famous Bljepa international airport must be one more reason for typists to visit this place. This will significantly reduce the travel time from the airport to the airport.

    The Albanian government for the first time announced plans for the new airport in 2017, and by 2021, the engineering company Mabetech International l, announced its intention to invest more than 103 million euro in the initial phase, which includes the loss of on the computer, as well as on the terminal.

    It is said that the future airport will provide services for flights from more than 3 km. terminal of 31 square meters.

    Albania is considered an ideal destination for those with a typical budget. A search on the booking site shows that nights cost from 17 euros to 140 euros for the cheapest hotels.

    Illustrative Photo by Mihai Vlasceanu: https://www.pexels.com/photo/beach-on-sea-coast-26743508/