US Business

Russia warns Lithuania, pushes into Ukraine's Donbas

Moscow on Tuesday warned Lithuania of “serious” consequences over its restriction of rail traffic to Russia’s Kaliningrad exclave, as Kremlin forces made gains in Ukraine’s strategic Donbas region.

The row over Lithuania, the arrival of sophisticated German weaponry in Ukraine’s arsenal and an imminent decision on Kyiv’s candidacy to join the European Union threaten to further ratchet up tensions between the West and Moscow.

Kremlin troops were meanwhile gaining ground in the Donbas, causing “catastrophic destruction” in Lysychansk, an industrial city at the forefront of recent clashes, the region’s governor said. Ukraine confirmed Russia had taken the frontline village of Toshkivka.

Governor Sergiy Gaiday said “every town and village” in Ukrainian hands in the Lugansk region was “under almost non-stop fire”. 

Since being repelled from Kyiv and other parts of Ukraine following its invasion in February, Moscow has been focusing its offensive on the Donbas region.

In the eastern city of Sloviansk, which could become a flashpoint as Russian troops advance from the north, local people were preparing to withstand attacks and the authorities said the community would defend itself.

“We believe they’ll beat the Russian scum,” resident Valentina, 63, said of local Ukrainian forces.

– ‘Serious’ consequences –

Russia’s war of words with EU member Lithuania escalated on Tuesday, with Moscow vowing “serious” consequences over Vilnius’ restrictions on rail traffic to the exclave of Kaliningrad that borders Lithuania and Poland. 

Lithuania says it is simply adhering to EU-wide sanctions on Moscow but Russia countered, accusing Brussels of “escalation”.

Moscow summoned the EU’s ambassador to Russia. Its foreign ministry said Lithuania’s actions “violate the relevant legal and political obligations of the European Union”.

“Russia will certainly respond to such hostile actions,” security council chief Nikolai Patrushev said at a regional security meeting in Kaliningrad.

The United States made clear its commitment to Lithuania as an ally in NATO, which considers an attack against one member an attack on all.

“We stand by our NATO allies and we stand by Lithuania,” State Department spokesman Ned Price told reporters in Washington.

With US-Russia tensions soaring, the State Department on Tuesday confirmed a second American, 52-year-old Stephen Zabielski, was killed fighting for Ukraine.

Two other Americans were captured last week in eastern Ukraine. 

A White House spokesman, John Kirby, voiced alarm at Russian statements that it would not apply the Geneva Conventions on the humane treatment of prisoners to the pair.

“It’s appalling that a public official in Russia would even suggest the death penalty for two American citizens that were in Ukraine,” Kirby told reporters.

Spain also said one of its citizens fighting for Ukraine had been killed, without giving further detail.

Ukraine has been seeking membership in the European Union after earlier failing to join NATO.

Ministers on Tuesday were united in granting candidate status to Ukraine as well as Moldova before a formal greenlight later this week, said France’s Europe minister, Clement Beaune, whose country holds the EU’s rotating presidency

Ukrainian President Volodymyr Zelensky, who has found hero status in Europe for resisting the invasion, said that he was working the phones to drum up support for EU membership.

“I will do everything for a historic decision of the European Union to be approved. It is important for us,” he said in a daily address.

– ‘Significant losses’ –

Western nations have been pumping billions of dollars of weapons into Ukraine, where Defence Minister Oleksiy Reznikov tweeted that powerful German-made Panzerhaubitze 2000 howitzer artillery pieces had reached his country’s forces.

Russia said Tuesday it had repelled a Ukrainian attempt to retake the symbolic Snake Island, a small territory in the Black Sea captured by Russian forces on the first day of the invasion. 

In addition to Toshkivka, Ukraine said it had lost control of the eastern village of Metyolkine, a settlement adjacent to Severodonetsk, which has been a focus of fighting for weeks and is now largely under Russian control.

A chemical plant in Severodonetsk where hundreds of civilians are said to be sheltering was being shelled constantly, Ukrainian officials said.

But defence ministry spokesman Oleksandr Motuzyanyk told Ukrainian television that Russian forces had suffered “significant losses” in the area of Severodonetsk.

Ukraine on Tuesday said it struck a Black Sea oil drilling platform off the Crimea peninsula because Russia was using it as a military installation. 

The rig had Russian garrisons and equipment for air defence, radar warfare and reconnaissance, Sergiy Bratchuk of Odessa’s regional military administration told an online briefing.

Russian shelling killed 15 people including an eight-year-old in eastern Ukraine’s Kharkiv region on Tuesday, its governor said.

On the sea, Russia’s navy is blockading ports, which Ukraine says is preventing millions of tonnes of grain from being shipped to world markets, contributing to soaring food prices.

Prior to the war, Ukraine was a major exporter of wheat, corn and sunflower oil.

Moscow denies Western charges it is responsible for the disruption to deliveries.

Turkish media reported that Russian, Ukrainian and UN officials would meet in Istanbul next week to try to unblock Black Sea grain exports.

– Search for accountability –

Ukraine, its Western backers and the International Criminal Court have all vowed to seek accountability over the war.

A search for bodies remains underway in the Kyiv region, where the police chief said that 1,333 civilians have been discovered and 300 people remain missing.

US Attorney General Merrick Garland visited Ukraine on Tuesday to discuss prosecution of individuals involved in war crimes.

“There is no place to hide,” Garland said.

Ukraine’s Prosecutor General Iryna Venediktova said Kyiv was looking for special equipment and expertise from the United States, including in recovering assets.

Legal support is just as needed “as the supply of arms to fight with the Russian Federation, which commits unprecedented, large-scale atrocities against the civilian population of our state,” she wrote on Facebook. 

Denmark and Sweden meanwhile became the latest European countries to warn of potential gas supply problems. 

Ukraine has called the reasons given for Russia’s reduction of gas supply to European customers “far-fetched” and “illegal”.

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Facebook agrees to safeguards in ad discrimination case

Facebook owner Meta has agreed to change its ad targeting technology and pay $115,000 to settle US government allegations the social media giant allowed discrimination in who saw housing advertisements, authorities said Tuesday. 

Under terms of a deal that must still be approved by a court, Meta will use artificial intelligence to make sure ads cross demographics to reach people regardless of age, gender or race.

“We will be introducing a new method designed to make sure the audience that ends up seeing a housing ad more closely reflects the eligible targeted audience for that ad,” Meta deputy general counsel Roy Austin said in a post.

The Department of Housing and Urban Development had charged in 2019 that Facebook “unlawfully discriminates based on race, color, national origin, religion, familial status, sex and disability” by restricting who can view housing-related ads.

Facebook has become a multi-billion dollar advertising juggernaut with its large amounts of user data that allow companies to more precisely target certain demographics, but which have also prompted allegations of privacy infringement and discrimination.

While HUD accusations focused on housing ads, Meta will also put the new system to use to make sure ads for jobs or credit don’t discriminate, Austin added.

Meta has been working with HUD on a “variance reduction system” to prevent discrimination in ad targeting on its platform.

Meta had already made changes to address housing ad discrimination concerns, and those will remain in effect, the proposed settlement stated.

Facebook announced early in 2019 that it was revamping how it uses targeted advertising in a settlement with activist groups alleging it discriminated in messages on jobs, housing, credit and other services.

By the end of this year, Meta will stop allowing ads to be targeted using a pair of “special audience” tools it offers that could carve out certain groups of people, the settlement said.

Meta will also pay a civil penalty of $115,000 and let an independent third-party check to make sure it is abiding by the terms of the settlement, court documents stated.

Trump pressure to flip election 'upended' lives, hearing told

US state lawmakers and poll workers described Tuesday how their lives had been upended by threats of violence as Donald Trump singled them out in his bid to overturn the 2020 US election.

Trump was personally involved in an intense campaign of pressure on officials in key swing states he had lost to Joe Biden, the fourth congressional hearing into the former president’s bid to cling to power after his defeat was told.

Members of the committee probing the January 2021 assault on the US Capitol that followed the election have spent much of June setting out their initial findings that Trump led a multi-pronged conspiracy to overturn the results, culminating in the insurrection in Washington.

On Tuesday they heard from poll worker Shaye Moss, who was falsely accused by Trump and his lawyer Rudy Giuliani alongside her mother Ruby Freeman of “rigging” the election count in Georgia with “suitcases” full of ballots for Biden. 

Moss, who is Black, described people making “hateful” and “racist” threats of violence following the baseless accusations, including one message saying: “Be glad it’s 2020 and not 1920.”

“This turned my life upside down. I no longer give out my business card, I don’t transfer calls,” Moss testified.

“I don’t want anyone knowing my name… I don’t go to the grocery store. Haven’t been anywhere at all.”

Freeman said in her deposition she had lost her good name and sense of security because “number 45 and his ally Rudy Giuliani decided to scapegoat me and my daughter Shaye, to push their own lies about how the presidential election was stolen.”

The mother and daughter were among poll workers or election officials in several states who found themselves pressured to thwart the will of millions of voters based on bogus claims of fraud, the panel said.

Rusty Bowers, speaker of the Arizona House of Representatives, testified that he asked Giuliani “on multiple occasions” for evidence of his stolen election claims.

He told committee members Giuliani said “we’ve got lots of theories, we just don’t have the evidence.”

Trump issued a statement, read out during the hearing, attempting to discredit Bowers, calling him a “RINO” — Republican In Name Only — and claiming that the lawmaker had told Trump the election was rigged and that Trump had in fact won Arizona.

Bowers said both claims were false.

– ‘Part of the playbook’ –

Committee chairman Bennie Thompson had started the hearing by asserting that Trump “pressuring public servants into betraying (their) oath was a fundamental part of the playbook.”

Liz Cheney, the committee’s vice chair, said Trump was aware that his false claims of fraud could lead to violence, but he assumed a “direct and personal role” in the disinformation campaign anyway.

US presidents are not elected directly by citizens, but chosen by “electors” named to a body called the electoral college by the party that wins the presidential vote in each state.

The committee says a key plank of the plot to subvert the 2020 election was getting pro-Trump Republicans in swing states won by Biden to submit official-looking but fake certificates claiming they were the legitimate electors.

The committee says Trump pressed his vice president Mike Pence to accept these “fake electors” when he was overseeing certification of Biden’s victory on January 6, 2021. 

Pence ultimately refused to recognize the pro-Trump slates and the president’s supporters rioted for hours at the Capitol in unprecedented scenes of brutality that led to at least five deaths.

– Sexualized threats –

At one point after the election, Trump personally called Republican National Committee chairwoman Ronna McDaniel to get involved in his pressure campaign, according to videotaped testimony by McDaniel.

Trump put on his lawyer John Eastman, McDaniel said, “to talk about the importance of the RNC helping the campaign gather these contingent electors.”

The exchange is crucial because the committee has promised to provide evidence of a direct link between Trump and the scheme to put forward the false electors.

In-person witnesses included Georgia secretary of state Brad Raffensperger, whom Trump pushed to “find” enough votes to overcome Biden’s lead in the battleground state in a phone call that is the subject of a state-level criminal probe.

Raffensperger revealed that 28,000 Republicans voted down-ballot in Georgia in 2020 but skipped the presidential race, which Biden won by just 12,000 votes.

The official described being inundated with vile messages and said his wife began receiving “sexualized” threats after Trump made them briefly infamous among his supporters. 

He also described a break-in at his widowed daughter-in-law’s home sparked by the election fraud claims.

“Moments require you to stand up and take the shots, and do your job, which is what we did,” he told the hearing.

Global stocks bounce after sharp selloff; yen falls

Stock markets rose Tuesday as calm returned following last week’s rout, but analysts warned that recession fears have not gone away and will cause more turmoil.

After a three-day holiday weekend, Wall Street burst higher, with major indices finishing more than two percent higher after spending the entire session in positive territory.

European equities rose for a second straight day, but pared down some of their gains from the morning.

Oil prices extended gains on hopes of improving energy demand in key consumers China and the United States, while the euro climbed on the prospect of rising eurozone borrowing costs.

“Risk appetite has managed to recover for now, perhaps because we get a much needed-break from central bank decisions this week,” IG analyst Chris Beauchamp told AFP.

“But while a bounce is overdue, it is probably only temporary.”

There remains an overarching sense of gloom as traders speculate that the sharp rise in borrowing costs around the world will tip economies into recession.

The focus this week is on Federal Reserve boss Jerome Powell’s two days of testimony to lawmakers in Washington, which will be closely watched for clues regarding the bank’s plans for fighting surging consumer.

“Where we go from here depends largely on whether Federal Reserve Chair Powell spooks the markets with his pre-released comments and what inflation data from the UK shows tomorrow (Wednesday),” City Index analyst Fiona Cincotta told AFP.

The Fed announced a hefty interest rate hike last week, days after inflation data had smashed forecasts and returning to a four-decade high. 

Several officials — including at the Fed, Bank of England, Reserve Bank of Australia and European Central Bank — have come out in recent days to flag a further tightening of borrowing costs.

Inflation has rocketed to multi-decade highs around the world on a host of factors, including the global supply crunch and the Ukraine conflict, which has fueled surging food and energy prices.

“These small recoveries in stock markets shouldn’t provide any comfort,” said Craig Erlam, senior analyst at OANDA trading platform.

“Recession is increasingly becoming the base case and so equities are vulnerable to further losses,” he said.

In currencies, the yen struck a fresh 24-year low against the US dollar following comments by Prime Minister Fumio Kishida that it “is up to the central bank” how to maintain its easy money policy while central banks elsewhere are raising rates. 

“The market is clearly looking to test the resolve of the Bank of Japan in terms of how much they are prepared to tolerate further currency weakness,” said analyst Michael Hewson at CMC Markets UK.

In corporate news, shares in German chemicals group Bayer fell by 4.7 percent following the US Supreme Court declining to hear an appeal from Bayer-owned Monsanto to quash lawsuits claiming its weedkiller Roundup causes cancer, before clawing back part of the drop.

The decision marks a major blow to the German conglomerate’s legal fight against Roundup-related cases, and Bayer has set aside more than $15 billion to deal with a wave of US lawsuits linked to the weedkiller.

– Key figures at around 1530 GMT –

New York – Dow: UP 2.2 percent at 30,530.25 (close)

New York – S&P 500: UP 2.5percent at 3,764.79 (close)

New York – Nasdaq: UP 2.5 percent at 11,069.30 (close)

London – FTSE 100: UP 0.4 percent at 7,152.05 (close)

Frankfurt – DAX: UP 0.2 percent at 13,292.40 (close)

Paris – CAC 40: UP 0.8 percent at 5,964.66 (close)

EURO STOXX 50: UP 0.7 percent at 3,494.00 (close)

Tokyo – Nikkei 225: UP 1.8 percent at 26,246.31 (close)

Hong Kong – Hang Seng Index: UP 1.9 percent at 21,559.59 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,306.72 (close)

Euro/dollar: UP at $1.0535 from $1.0511 late Monday

Pound/dollar: UP at $1.2273 from $1.2253

Euro/pound: UP at 85.80 pence from 85.78 pence

Dollar/yen: UP at 136.64 yen from 135.07 yen

Brent North Sea crude: UP 0.5 percent at $114.65 per barrel

West Texas Intermediate: UP 1.0 percent at $110.65 per barrel

burs-jmb/hs

Kellogg pops as it plans spin-off of legacy cereal business

Iconic breakfast food brand Kellogg became the latest US corporate giant to announce a breakup, unveiling plans Tuesday to split into three companies in a move that lifted its share price.

The company — known for such ubiquitous brands as Corn Flakes and Pop-Tarts — will spin off its North American cereal business into a new company, while a second venture will house Kellogg’s plant-based businesses.

The remaining corporation will be positioned as a higher-growth snacks business with exposure to emerging markets. This unit — which will also house the international cereal operation — accounted for roughly 80 percent of Kellogg’s $14.1 billion in 2021 revenues.

“This will unlock and create opportunity for all three businesses,” Kellogg Chief Executive Steve Cahillane said on a conference call with analysts.

The yet-to-be-named entities will initially be known as Global Snacking Co., North America Cereal Co., and Plant Co. The latter two will be created through tax-free spin-offs.

North American Cereal, covering the United States, Canada and the Caribbean, “will be solely dedicated to winning cereal and will not have to compete for resources with a fast-growing snack business,” said Cahillane, who will lead the new snacks company. 

North American Cereal and Plant Co. would remain headquartered in Battle Creek, Michigan, while Global Snacking will have dual headquarters — in Battle Creek and Chicago.

Leadership for the other two ventures has not yet been announced.

Kellogg’s announcement comes on the heels of earlier corporate break-ups including General Electric’s November 2021 announcement of a split into three ventures, which was followed a few weeks later and by Johnson & Johnson saying it will break in two.

– Growth markets –

The company’s origins date to 1894 when WK Kellogg created Corn Flakes breakfast cereal, launching the Kellogg company 12 years later in Battle Creek, Michigan. 

Subsequent products included Rice Krispies, released in 1928, and Frosted Flakes, which was unveiled in 1952 with the Tony the Tiger character on the box, which became famous for his “They’re gr-r-reat!” tagline.

But the bulk of the company’s revenues now come from global snacks, where about 50 percent of sales come from emerging markets and developed international markets.

Snack brands include Pringles, Pop-Tarts and Rice Krispies Treats, while the group also houses Eggo and other frozen breakfasts and products such as noodles in Africa, which Kellogg described as a “rapidly expanding business.”

Kellogg is aiming to complete the split by late 2023, subject to approval by US regulators.

Kellogg will continue to report as one company throughout 2022, said Chief Financial Officer Amit Banati.

The company expects to produce the required three years of audited financial statements for each of the ventures in the second half 2023.

Cahillane said it will be “business as usual over the next 18 months” while the company moves through the process.

He said Plant Co., which will house the MorningStar Farms alternative meat products, could also be acquired by another company if such an option arises and is better than an initial public offering.

Briefing.com praised the move, saying the cereal business had  “weighed down” the higher-margin snack business and adding, “we also think that Kellogg’s promising plant business has sort of been buried.”

Shares rose 2.0 percent to finish the day at $68.86.

Kellogg pops as it plans spin-off of legacy cereal business

Iconic breakfast food brand Kellogg became the latest US corporate giant to announce a breakup, unveiling plans Tuesday to split into three companies in a move that lifted its share price.

The company — known for such ubiquitous brands as Corn Flakes and Pop-Tarts — will spin off its North American cereal business into a new company, while a second venture will house Kellogg’s plant-based businesses.

The remaining corporation will be positioned as a higher-growth snacks business with exposure to emerging markets. This unit — which will also house the international cereal operation — accounted for roughly 80 percent of Kellogg’s $14.1 billion in 2021 revenues.

“This will unlock and create opportunity for all three businesses,” Kellogg Chief Executive Steve Cahillane said on a conference call with analysts.

The yet-to-be-named entities will initially be known as Global Snacking Co., North America Cereal Co., and Plant Co. The latter two will be created through tax-free spin-offs.

North American Cereal, covering the United States, Canada and the Caribbean, “will be solely dedicated to winning cereal and will not have to compete for resources with a fast-growing snack business,” said Cahillane, who will lead the new snacks company. 

North American Cereal and Plant Co. would remain headquartered in Battle Creek, Michigan, while Global Snacking will have dual headquarters — in Battle Creek and Chicago.

Leadership for the other two ventures has not yet been announced.

Kellogg’s announcement comes on the heels of earlier corporate break-ups including General Electric’s November 2021 announcement of a split into three ventures, which was followed a few weeks later and by Johnson & Johnson saying it will break in two.

– Growth markets –

The company’s origins date to 1894 when WK Kellogg created Corn Flakes breakfast cereal, launching the Kellogg company 12 years later in Battle Creek, Michigan. 

Subsequent products included Rice Krispies, released in 1928, and Frosted Flakes, which was unveiled in 1952 with the Tony the Tiger character on the box, which became famous for his “They’re gr-r-reat!” tagline.

But the bulk of the company’s revenues now come from global snacks, where about 50 percent of sales come from emerging markets and developed international markets.

Snack brands include Pringles, Pop-Tarts and Rice Krispies Treats, while the group also houses Eggo and other frozen breakfasts and products such as noodles in Africa, which Kellogg described as a “rapidly expanding business.”

Kellogg is aiming to complete the split by late 2023, subject to approval by US regulators.

Kellogg will continue to report as one company throughout 2022, said Chief Financial Officer Amit Banati.

The company expects to produce the required three years of audited financial statements for each of the ventures in the second half 2023.

Cahillane said it will be “business as usual over the next 18 months” while the company moves through the process.

He said Plant Co., which will house the MorningStar Farms alternative meat products, could also be acquired by another company if such an option arises and is better than an initial public offering.

Briefing.com praised the move, saying the cereal business had  “weighed down” the higher-margin snack business and adding, “we also think that Kellogg’s promising plant business has sort of been buried.”

Shares rose 2.0 percent to finish the day at $68.86.

US businessman John Textor completes Lyon takeover

Lyon president Jean-Michel Aulas said on Tuesday a deal had been struck for US businessman John Textor to complete a takeover of the seven-time French champions.

Eagle Football Holdings, a sports investment vehicle controlled by Crystal Palace shareholder Textor, is set to acquire a majority stake in the Ligue 1 club.

“We agreed, we shook hands overnight via video and at 3 a.m. Monday everything was signed,” said Aulas, adding that the board of directors had approved the deal.

The agreement will see Textor buy out minority shareholders Pathe and IDG Capital — who hold 19.36 percent and 19.85 percent stakes respectively — and a gradual sale of Holnest, the family holding company of Aulas, which holds 27.72 percent of the capital.

Aulas said he would continue as club president for “at least three years”.

“John wanted me to stay… it wasn’t an obligation but a wish of the fans” and of all those involved in the club, he said.

“OL… has stretched its wings beyond the borders, it has got a brand known everywhere, it is the 20th club in the world, so why would I show up and want to change any of that,” Textor told reporters.

“I believe in dreaming with your eyes wide open. Jean-Michel and I really want championship titles and winning Europe.”

Textor also owns Brazilian top-flight club Botafogo and Belgian second-division side RWD Molenbeek.

Lyon missed out on European competition for the second time in three seasons after finishing the 2021-22 campaign in eighth place under Peter Bosz.

White House says concerned about recession but US economy strong

The American economy remains strong, a White House economist asserted Tuesday, while acknowledging President Joe Biden’s team is concerned about a possible recession.

With inflation soaring at the fastest pace in more than four decades, sending prices for gas and housing rocketing, Americans are feeling the pain and the Federal Reserve is cranking up interest rates to try to cool the economy, fueling fears of a sharp downturn.

Despite a contraction in the first three months of the year, core parts of the world’s largest economy remain in good shape, including the labor market and consumer spending, Cecelia Rouse, head of Biden’s Council of Economic Advisers said on CNBC.

“When we look at recession (risks) … that’s obviously a concern, but the bones of our economy are solid,” she said, noting that the United States is better positioned to face the challenges than most other nations.

On Sunday, Treasury Secretary Janet Yellen also tried to quell recession fears, saying a downturn is not “inevitable” even while the economy will slow as it “transitions to stable growth.”

Rouse said Biden is focused on the inflation challenge, which is related to the Covid-19 pandemic: “It’s not easy to turn back on a global economy.”

Global supply chain snarls have been a key factor in fueling the prices increases, and pandemic lockdowns in China are adding to the ongoing uncertainty.

But Russia’s invasion of Ukraine was a “game changer,” she said.

“We all hope the Fed can get inflation under control without ceding too much on maximum employment,” Rouse said “We all hope for the longed-for soft landing.”

The Fed last week implemented the third interest rate hike this year, the biggest in nearly 30 years, and promised more big increases in coming months.

– ‘Relatively healthy’ –

Richmond Federal Reserve Bank President Thomas Barkin said there is a risk of recession, but agreed there are many signs the economy remains strong.

“Data on today’s economy still looks relatively healthy. Tomorrow is of course unclear,” Barkin said Tuesday in a speech prepared for delivery to an event in Richmond.

However, he acknowledged that with the Fed raising interest rates and an uncertain outlook for the global supply chain, fears of a coming downturn are not surprising.

But “not all recessions are equal,” he said, and “it’s worth remembering that most other recessions aren’t that long or that deep.”

Getting the economy back to normal in the wake of the supply disruptions “doesn’t have to require a calamitous decline in activity.”

Barkin echoed comments from Fed chief Jerome Powell that the central bank has the tools and will do whatever it takes to bring down inflation, but he cautioned that “we may or may not get help from global events and supply chains. There is of course recession risk.”

Earlier Tuesday, during a discussion with the National Association for Business Economics, Barkin said it was not yet clear how fast and how far the central bank will have to move.

“You want to get back to where you want to go as fast as you can without breaking anything,” he said.

Ecuadorans teargassed at demos that military deems 'grave threat'

Police used tear gas Tuesday to disperse hundreds of Ecuadorans protesting in the capital Quito on the ninth day of Indigenous-led fuel price protests that the military described as a “grave threat.”

Some 500 protesters among thousands who arrived in the capital from around the country in recent days blockaded a key road with burning tree branches.

Dispersed with tear gas, they quickly regrouped to march with watery eyes on the CCE culture center — traditionally used by Indigenous people to launch protests but requisitioned by police on Sunday to use as a base. 

“The objective of today is to retake the Casa de la Cultura,” protester Wilson Mazabanda told AFP before police used mace for a second time to break up the group.

Earlier Tuesday, Defense Minister Luis Lara said Ecuador’s democracy “faces a grave threat from… people who are preventing the free movement of the majority of Ecuadorans” with widespread road blockades.

Flanked by the heads of the army, navy and air force, Lara warned that the armed forces “will not allow attempts to break the constitutional order or any action against democracy and the laws of the republic.”

Called by the powerful Confederation of Indigenous Nationalities of Ecuador (Conaie), demonstrations since June 13 have seen roads barricaded nationwide at a cost of hundreds of millions of dollars to the economy.

Dozens of people have been injured. 

– ‘Tired of this government’ –

Conaie — credited with helping topple three presidents between 1997 and 2005 — called the demonstrations as Ecuadorans increasingly struggle to make ends meet.

Indigenous people comprise more than a million of Ecuador’s 17.7 million inhabitants and wield much political clout, but are disproportionately affected by rising inflation, unemployment and poverty exacerbated by the coronavirus pandemic.

Conaie has vowed to maintain the protests until its demands are met.

Thousands of fresh protesters entered Quito from the south and north on Monday, after often long journeys on foot and on the backs of trucks.

They took to the streets afresh on Tuesday, burning tires and tree branches, some wielding sticks, fireworks and makeshift shields made of road signs or garbage can lids.

“We are already tired of this government,” said protester Mazabanda, a university student, of ex-banker President Guillermo Lasso’s one-year-old term.

– State of emergency –

Fuel prices have risen sharply since 2020, almost doubling for diesel from $1 to $1.90 per gallon and rising from $1.75 to $2.55 for gasoline.

Conaie is demanding a price cut to $1.50 a gallon for diesel and $2.10 for gasoline.

It also wants jobs, food price controls and a commitment to renegotiating the personal bank loans of about four million families.

The movement has since been joined by students, workers and other Ecuadorans feeling the economic pinch.

Police said on Monday that 63 armed forces personnel have been wounded in clashes and 21 others briefly held hostage since the protests began, while human rights observers reported 79 arrests and 55 civilians wounded.

Lasso on Monday extended a state of emergency to cover six of the country’s 24 provinces, with a night-time curfew in the capital Quito, as he sought to curtail the countrywide show of anger.

The state of emergency empowers Lasso to mobilize the armed forces to maintain order, suspend civil rights and declare curfews.

Conaie has vowed to maintain its blockade until the government meets its demands.

– ‘They seek chaos’ –

The president said in a video on Twitter Monday that the protesters “do not want peace” and have rejected government calls for dialogue.

“They seek chaos. They want to eject the president,” he charged.

Ecuador was losing about $50 million a day as a result of the protests, official figures show, without counting oil production — the country’s main export product.

State-owned Petroecuador has reported almost 64,300 barrels in lost production because of more than 230 wells shuttered by demonstrations in the Amazon.

Ecuador’s parliament voted 81 to 56 late Monday in favor of a resolution urging the government to conduct a “serious, clear and honest” dialogue with protesters.

It also proposed the convening of a “round table” of talks including the United Nations, Red Cross, universities and the powerful Catholic Church to find a solution to the stalemate.

In 2019, Conaie-led protests left 11 people dead and more than 1,000 injured but forced then-president Lenin Moreno to abandon plans to eliminate fuel subsidies.

Mexican scientist jailed in US for spying for Russia

A prominent Mexican scientist convicted of spying for Russia was sentenced to four years in prison by a US court on Tuesday.

Hector Cabrera Fuentes, 37, pleaded guilty in February to a single charge of acting on behalf of a foreign government without notifying the US authorities.

“I have deep regrets and remorse for my actions and I apologize to the United States,” Cabrera Fuentes said.

“Everyone makes mistakes in his life and this is my big mistake,” the renowned biochemist and cardiovascular researcher said.

Cabrera Fuentes, who lived in Singapore, was arrested in Miami in 2020 for spying on a “US government source” on behalf of Russia, according to the Department of Justice.

According to court documents, a Russian government official recruited Cabrera Fuentes in 2019. He faced a maximum penalty of 10 years in prison.

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