World

Asian markets climb as calm returns after sharp sell-off

Equities rose Tuesday in Asia as some stability returned to markets after last week’s upheaval, but analysts warned of further pain for traders after central bank officials hinted at further interest rate hikes to reel in inflation.

While there was no catalyst from Wall Street owing to a public holiday, a healthy performance across Europe provided a little boost, while bargain-buying was also lending support.

However, there remains an overarching sense of gloom as traders speculate that the sharp lift in borrowing costs around the world will tip economies into recession.

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 some insight into the bank’s thinking and possible clues about its plans for fighting surging prices.

The Fed announced a three-quarter point lift last week, after inflation data days earlier had smashed forecasts and hit a four-decade high.

“While (investors do) not expect Powell to reinvent the policy wheel, we could expect him to reinforce the idea that the Fed is in data-dependent mode,” said Stephen Innes of SPI Asset Management. 

“Hence, any shift in Fed rhetoric will be a function of incoming data, virtually all of which now presents event risk. From that perspective, further evidence of persistent inflation will trigger policy panic, while any signs of sluggish growth momentum will confirm the recession narrative.

“Neither suggests that now is the time to board the rally wagon.”

In early trade, Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta all rose.

“There might be a narrative that we’ve hit a bottom, we are oversold, the Fed is taking inflation seriously and that might be slightly bullish in the interim,” Frances Stacy, of Optimal Capital, told Bloomberg TV.

However, while the volatility of last week has gone, banks’ intention to continue hiking rates could cause fresh ructions.

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.

In commodities markets, oil extended gains as traders moved back in after Friday’s plunge fuelled by concerns over a possible recession.

The gains have been helped by optimism for a boost to demand as China gradually eases out of its period of Covid containment, while the US summer driving period picks up.

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: UP 1.8 percent at 26,225.15 (break)

Hong Kong – Hang Seng Index: UP 1.1 percent at 21,392.60

Shanghai – Composite: UP 0.1 percent at 3,319.07

Euro/dollar: UP at $1.0534 from $1.0528 Monday

Pound/dollar: UP at $1.2269 from $1.2243

Euro/pound: DOWN at 85.86 pence from 86.02 pence

Dollar/yen: UP at 135.10 yen from 135.06 yen

West Texas Intermediate: UP 2.2 percent at $112.012

Brent North Sea crude: UP 1.6 percent at $115.91 per barrel

London – FTSE 100: UP 1.5 percent at 7,121.81 points (close)

New York – Dow: DOWN 0.1 percent at 29,888.78 (close)

For Iraqis a sweltering summer of 'hell' has begun

Umm Mohammed, 74, waves a fan back and forth to cool down, but in the blistering heat of Iraq’s southern city of Basra there is nothing but stiflingly hot air.

While Basra is used to scorching summers, this year it has started sooner than expected, bringing misery to residents in a city also plagued by chronic electricity shortages. 

“By God, we are tired,” Umm Mohammed said faintly, adding that the heat had woken her up in the middle of the night.

Just days into summer, the temperature in Basra has already soared to around 45 degrees Celsius (113 Fahrenheit).

Umm Mohammed’s modest home has a flimsy sheet-metal roof that retains the sweltering heat.

Further north in the capital Baghdad, temperatures have already topped 50 Celsius — in the shade.

Battered by decades of conflict that has sapped its infrastructure, Iraq is struggling with droughts, repeated sandstorms, desertification and a drop in some river levels.

Chronic power cuts are exacerbated in the summer, and only those who can afford private generators are able to keep their fridges or air conditioning units running.

In Basra, high humidity compounds the oppressive heat.

And with many Iraqis struggling to survive, spending around $105 dollars a month for a private generator is not an option.

The authorities “must help poor people”, Umm Mohammed said, decrying their failure to provide an adequate mains supply.

Referring to how the government treats its citizens, she said: “Even God does not agree to that.” 

– ‘It’s hell’ – 

Iraq is the second-largest oil producer in the OPEC cartel.

But the once thriving country has for years bought gas from neighbouring Iran, which supplies about one-third of its power sector needs.

US sanctions on Iranian oil and gas have complicated Baghdad’s payments for the imports, leaving Iraq in heavy arrears and prompting Tehran to periodically switch off the taps.

The result is longer power cuts for most of Iraq’s 41-million-strong population, many of whom blame politicians and endemic corruption for their plight.

Anger over blackouts helped fuel deadly protests from late 2019 to mid-2020, including many in southern Iraq.

Nataq al-Khafaji, who lives in Nasiriyah, just north of Basra, said getting by in the heat without electricity was “very difficult for the children and the elderly”.

“It’s hell,” he added.

During the summer holidays, Khafaji’s three children have nowhere to go and little to do.

Stuck in their darkened home, they try as best as they can to escape the suffocating heat outdoors.

Khafaji has bought a battery-operated fan, but expressed worry that it would not be enough during the worst months “when it will be close to 50 degrees”.

– ‘National priority’ –

The United Nations ranks Iraq as one of the top five countries most vulnerable to climate change.

Since mid-April, it has been battered by 10 sandstorms — a product of intense drought, soil degradation, high temperatures and low rainfall linked to climate change.

President Barham Saleh has warned that tackling climate change “must become a national priority for Iraq as it is an existential threat to the future of our generations to come”.

Saleh said desertification affects 39 percent of Iraq, where water supplies are also dwindling drastically and crop yields are declining.

With heat waves and dust storms “expected to increase over the years”, so will health issues, said Seif al-Badr, a spokesman for the health ministry.

“We expect to be treating more people for a variety of illnesses linked to climate” change, he told AFP.

But efforts to address such issues appear to have been shelved, as Iraq grapples with political deadlock that has left it without a new government after polls last October.

The World Bank has warned that unless solutions are found, Iraq could lose 20 percent of its water resources by 2050 due to climate change.

Eighth day of Indigenous fuel price protests in Ecuador

Thousands of Indigenous people and members of other disgruntled groups marched into Ecuador’s capital on the eighth day of fuel price protests Monday, accused by the president of seeking only “chaos” and his removal.

President Guillermo Lasso extended a state of emergency to cover six provinces, with a nighttime curfew in Quito, as he seeks to curtail demonstrations that have seen roads barricaded countrywide, cost the economy tens of millions of dollars, and left dozens of people injured.

“With this decision, the welfare of citizens is safeguarded in the face of violence. At the same time, the rights of those who demonstrate peacefully are protected,” the government said.

On foot, on motorcycles and in crowded trucks, the Indigenous protesters began a peaceful march towards the city center from Cutuglagua, an area in southern Quito where they have been steadily growing in number since Sunday.

A hundred Indigenous people also entered the city from the north.

The powerful Confederation of Indigenous Nationalities of Ecuador (Conaie) — credited with helping topple three presidents between 1997 and 2005 — called the protest as Ecuadorans increasingly struggle to make ends meet.

Indigenous people comprise more than a million of Ecuador’s 17.7 million inhabitants, and their protest has since been joined by students, workers and others feeling the economic pinch.

“We have reached out, we have called for dialogue, but they do not want peace,” Lasso said in a video on Twitter Monday.

“They seek chaos. They want to eject the president.”

Police say 63 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.

– ‘Zone of peace’ –

A state of emergency declared last Friday allowed Lasso to mobilize the armed forces to maintain order, suspend certain civil rights and declare curfews.

On Sunday, Ecuadoran police requisitioned an Indigenous cultural center in Quito to use as a base for protest monitoring.

The center had sheltered thousands of Indigenous people during anti-government demonstrations in 2019 that left 11 dead and more than 1,000 injured but forced then-president Lenin Moreno to abandon plans to eliminate fuel subsidies.

The Salesian University, in the north of the capital, decided on Monday to “open the doors” of its facilities as a “zone of peace and humanitarian shelter” for the indigenous people and called “to stop actions and attitudes that interfere or alter the processes of dialogue and the search for solutions.”

Oil producer Ecuador has been hit by rising inflation, unemployment and poverty exacerbated by the coronavirus pandemic.

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 demands a price cut to $1.50 a gallon for diesel and $2.10 for gasoline.

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

Eighth day of Indigenous fuel price protests in Ecuador

Thousands of Indigenous people and members of other disgruntled groups marched into Ecuador’s capital on the eighth day of fuel price protests Monday, accused by the president of seeking only “chaos” and his removal.

President Guillermo Lasso extended a state of emergency to cover six provinces, with a nighttime curfew in Quito, as he seeks to curtail demonstrations that have seen roads barricaded countrywide, cost the economy tens of millions of dollars, and left dozens of people injured.

“With this decision, the welfare of citizens is safeguarded in the face of violence. At the same time, the rights of those who demonstrate peacefully are protected,” the government said.

On foot, on motorcycles and in crowded trucks, the Indigenous protesters began a peaceful march towards the city center from Cutuglagua, an area in southern Quito where they have been steadily growing in number since Sunday.

A hundred Indigenous people also entered the city from the north.

The powerful Confederation of Indigenous Nationalities of Ecuador (Conaie) — credited with helping topple three presidents between 1997 and 2005 — called the protest as Ecuadorans increasingly struggle to make ends meet.

Indigenous people comprise more than a million of Ecuador’s 17.7 million inhabitants, and their protest has since been joined by students, workers and others feeling the economic pinch.

“We have reached out, we have called for dialogue, but they do not want peace,” Lasso said in a video on Twitter Monday.

“They seek chaos. They want to eject the president.”

Police say 63 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.

– ‘Zone of peace’ –

A state of emergency declared last Friday allowed Lasso to mobilize the armed forces to maintain order, suspend certain civil rights and declare curfews.

On Sunday, Ecuadoran police requisitioned an Indigenous cultural center in Quito to use as a base for protest monitoring.

The center had sheltered thousands of Indigenous people during anti-government demonstrations in 2019 that left 11 dead and more than 1,000 injured but forced then-president Lenin Moreno to abandon plans to eliminate fuel subsidies.

The Salesian University, in the north of the capital, decided on Monday to “open the doors” of its facilities as a “zone of peace and humanitarian shelter” for the indigenous people and called “to stop actions and attitudes that interfere or alter the processes of dialogue and the search for solutions.”

Oil producer Ecuador has been hit by rising inflation, unemployment and poverty exacerbated by the coronavirus pandemic.

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 demands a price cut to $1.50 a gallon for diesel and $2.10 for gasoline.

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

Britain faces biggest rail strike in over 30 years

Britain’s railway workers on Tuesday began the network’s biggest strike action in more than three decades, as a cost-of-living crisis caused by surging inflation risks wider industrial action.

Last-ditch talks to avert the strike broke down on Monday, meaning more than 50,000 members of rail union RMT will walk out for three days this week.

RMT general-secretary Mick Lynch described as “unacceptable” offers of below-inflation pay rises by both overground train operators and London Underground that runs the Tube in the capital.

Transport Secretary Grant Shapps said the government was doing everything it could to minimise the expected “mass disruption”.

But he told parliament on Monday: “It’s estimated that around 20 percent of planned services will operate, focused on key workers, main population centres and critical freight routes.”

The strikes — also on Thursday and Saturday — risk causing significant disruption to major events including the Glastonbury music festival.

Schools are warning that thousands of teenagers taking national exams will also be affected.

The strikes are the biggest dispute on Britain’s railway network since 1989, according to the RMT. 

Rail operators, however, warn of disruption throughout the week, with lines not affected by strike action still having to reduce services.

RMT members on the London Underground are additionally staging a 24-hour Tube train stoppage Tuesday.

The union argues the strikes are necessary as wages have failed to keep pace with UK inflation, which has hit a 40-year high and is on course to keep rising.

– Teachers, lawyers, NHS –

Countries around the world are being hit by decades-high inflation as the Ukraine war and the easing of Covid restrictions fuel energy and food price hikes.

Unions warn also that railway jobs are at risk, with passenger traffic yet to fully recover after the lifting of coronavirus pandemic lockdowns.

The strikes are compounding wider travel chaos after airlines were forced to cut flights owing to staff shortages, causing long delays and frustration for passengers.

Thousands of workers were sacked in the aviation industry during the pandemic but the sector is now struggling to recruit workers as travel demand rebounds following the lifting of lockdowns.

Other areas of the public sector are meanwhile set to hold strikes.

The Criminal Bar Association, representing senior lawyers in England and Wales, have voted to strike from next week in a row over legal aid funding.

Justice minister James Cartlidge called the walk-out “disappointing” given that the court system is already battling significant backlogs in cases caused by the pandemic.

Four weeks of action begin on Monday and Tuesday, increasing by one day each week until a five-day strike from July 18.

Teaching staff and workers in the state-run National Health Service are reportedly also mulling strike action.

And several other transport unions are balloting members over possible stoppages that could occur in the coming weeks.

Russian Nobel laureate sells medal for $103.5 mn to benefit Ukraine kids

Dmitry Muratov, the Russian editor-in-chief of the independent newspaper Novaya Gazeta, on Monday auctioned off his Nobel Peace Prize gold medal for a whopping $103.5 million to benefit children displaced by the war in Ukraine.

The medal was sold to an as yet unidentified phone bidder at the sale in New York organized by Heritage Auctions.

The sale was a spirited one, with lots of applause and bidders egging one another on to increase the total. Muratov was seen recording videos of the bidding screen and those in the room.

When the final bid came in, at tens of millions of dollars more than the previous offer, many in the room expressed shock, including Muratov himself.

“I’m just like you in that regard,” he told AFP, speaking through a translator after the sale.

Muratov won the prize in 2021 alongside journalist Maria Ressa of the Philippines, with the committee honoring the pair “for their efforts to safeguard freedom of expression.”

He was among a group of journalists who founded Novaya Gazeta in 1993 after the fall of the Soviet Union. 

This year, it became the only major newspaper left voicing criticism of President Vladimir Putin and his tactics inside and outside the country.

In March, more than a month into Moscow’s invasion of Ukraine, Novaya Gazeta suspended operations in Russia, after Moscow adopted legislation providing for tough jail terms against anyone criticizing the Kremlin’s bloody military campaign.

In April, Muratov was assaulted on a train when a person threw oil-based paint mixed with acetone on him, causing his eyes to burn.

Muratov’s medal was available to bidders both in person and online, with all proceeds going to UNICEF’s Humanitarian Response for Ukrainian Children Displaced by War.

When asked why he chose UNICEF as the recipient of the funds, Muratov said: “It’s critical to us that that organization does not belong to any government. It can work above government. There are no borders for it.”

– ‘We must stay in our jobs’ –

Since 2000, six of Novaya Gazeta’s journalists and collaborators have been killed in connection with their work, including investigative reporter Anna Politkovskaya.

Muratov dedicated his Nobel prize to their memory.

On Monday, he hailed the persistence of journalists as an important check on governments, and one way that war can be prevented.

“So no matter how many times each one of us wants to turn in our notice and quit, we must stay in our jobs,” he told AFP. 

Speaking in a video released by Heritage in connection with the sale, the prominent journalist said that winning the Nobel “gives you an opportunity to be heard.”

“The most important message today is for people to understand that there’s a war going on and we need to help people who are suffering the most,” he said.

Over 130 Malian civilians 'systematically' killed by suspected jihadists

Suspected jihadists massacred more than 130 civilians over the weekend in neighbouring central Mali towns, the latest mass killings in the Sahel region.

Local officials reported scenes of systematic killings by armed men in Diallassagou and two surrounding towns in the Bankass circle, a longtime hotbed of Sahelian violence.

“They have also been burning huts, houses, and stealing cattle — it’s really a free-for-all,” said a local official who for security reasons spoke on condition of anonymity.

He and another official, who like him had fled his village, said the death toll was still being counted on Monday.

Nouhoum Togo, head of a party in Bankass, the main town in the area, said the toll was even higher than the 132 announced by the government, which has blamed Al-Qaeda-affiliated jihadists for the killings. 

The national authorities broke their silence on Monday afternoon after alarming reports proliferated on social networks over the weekend.

Togo told AFP that army operations in the area two weeks ago had led to clashes with jihadists. On Friday, the jihadists returned on several dozen motorbikes to take revenge on the population, he added.

“They arrived and told the people, ‘You are not Muslims’ in Fulani, then took the men away, and a hundred people went with them,” he said. 

“Some two kilometres (1.2 miles) away, they systematically shot people.”

He said the bodies continued to be collected in the areas around Diallassagou on Monday.

– Blaming the Macina Katiba –

The government blamed the attack on Fulani religious leader Amadou Koufa’s armed group, the Macina Katiba. 

Central Mali has been plagued by violence since the Al-Qaeda-affiliated organisation emerged in 2015.

A large part of the area is beyond state control and is prone to violence by self-defence militias and inter-community reprisals.

Since 2012, Mali has been rocked by an insurgency by groups linked to Al-Qaeda and the so-called Islamic State group.

Violence that began in the north has since spread to the centre and neighbouring Burkina Faso and Niger.

Civilians are often subjected to reprisals by jihadists who accuse them of collaborating with the enemy.

Some areas of the country, especially in the centre, have fallen under the jihadists’ control. 

The military ousted the civilian government in 2020 over its inability to halt the violence, and has said the restoration of security is its priority.

But civilians still often find themselves caught in the crossfire between armed groups, including those affiliated with Al-Qaeda and the Islamic State.

– Deteriorating border situation –

Nearly 600 civilians were killed in Mali in 2021 in violence blamed mainly on jihadists, but also on self-defence militias and armed forces, according to a UN document published in March.

The UN has expressed alarm in Security Council documents at the deteriorating security situation in central Mali, as well as in the north and in the area along the borders of Burkina Faso and Niger.

Not far from those borders on Saturday, around 20 civilians were killed in the northern region of Gao — about 500 kilometres (311 miles) west of Bankass.

A UN spokesperson on Monday condemned “in the strongest terms the attacks perpetrated… near Goa and near Bankass”. 

Members of the UN Security Council “expressed their deepest sympathy and condolences to the families of the victims and to the transitional government of Mali”, the UN statement said. 

The number of civilians killed in attacks attributed to extremist groups has almost doubled since 2020 in the central Sahel, a coalition of West African NGOs said in a report released Thursday.

Last Wednesday, an armed group reported the death of 22 people in the Menaka region, right by Niger’s western border. 

In northern Burkina Faso, 86 people were killed in June in Seytenga. 

Mali’s junta leader Colonel Assimi Goita decreed three days of national mourning for the latest killings. 

Israeli coalition to dissolve parliament, force new elections

Israel’s Prime Minister Naftali Bennett said Monday his governing coalition will dissolve parliament next week, a shock announcement that will give power to Foreign Minister Yair Lapid in days and force new elections. 

Bennett and Lapid forged an ideologically disparate alliance one year ago, counting eight-parties broadly united on the desire to end the tenure of former premier Benjamin Netanyahu. 

The coalition of hawks, left-wingers and — for the first time in Israeli history — Arab Islamists, temporarily ushered Israel out of an unprecedented era of political gridlock. 

But after a series of defections that put the coalition on the brink of collapse, Bennett said he would support a bill to dissolve parliament next week, triggering a fifth election in less than four years with no guarantee of a viable new administration.

Bennett said that Lapid, a centrist, will take over as prime minister of the caretaker government in line with last year’s power-sharing deal. 

“We made the right decision for Israel,” he said.

The move means Lapid is now poised to host US President Joe Biden, who is due to visit Israel in July.

Lapid thanked Bennett for “putting the country before his personal interest”, but said the inability of the coalition to survive indicated that Israel “is in need of serious change”.

– West Bank settler law –

Bennett, a religious nationalist, is the former head of a lobby group for Jewish settlers in the West Bank, a Palestinian territory occupied by Israel since 1967.  

His government faced a June 30 deadline to renew a measure that ensures settlers live under Israeli law. Palestinians in parts of the West Bank are subject only to Israeli military rule. 

Two Arab lawmakers within the coalition refused earlier this month to re-certify the measure, leaving the coalition, which only controlled 60 votes in Israel’s 120-seat parliament, handcuffed. 

Bennett, an unswerving supporter of West Bank settlements considered illegal under international law, said he could not allow the measure to lapse. 

The law’s expiration would have created “security risks” and “constitutional chaos”, he said.

“I could not allow that.”

Dissolving the government before the measure expires means it is automatically renewed until a new government is formed. 

Israel’s Haaretz newspaper reported new elections would be held on October 25. 

– Netanyahu cheers –

Netanyahu, who is on trial over corruption charges that he denies, hailed the end of “the worst government in Israel’s history”.

The veteran right-winger pledged to form “a strong and stable government” of right-wingers. 

But Netanyahu has no obvious solution to the political challenges that plagued him through four previous votes since April 2019 in which he failed to secure a governing coalition. 

Many on the right still distrust him personally and have ruled out serving in any government he leads, including former ally and coalition member Gideon Saar, currently Israel’s justice minister.  

“The goal in the near elections is clear: preventing the return of Netanyahu to the premiership, and enslaving the state to his personal interests,” Saar tweeted. 

Political analyst and polling expert Dahlia Scheindlin told AFP earlier this week that while surveys continue to show Netanyahu’s Likud party remains Israel’s most popular, there is no certainty that fresh polls will give him a governing majority. 

“In all the surveys in the last two months, only one survey gave (Netanyahu and his allies) 61 seats and that one was a few weeks ago, so it is not like there is a trend (of Likud rising),” she said. 

Yohanan Plesner, president of the Israel Democracy Institute think-tank, said the move by Bennett and Lapid highlighted that Israeli governance remains in crisis. 

“The decision by Prime Minister Bennett to disperse the Knesset… is a clear indication that Israel’s worst political crisis did not end when this government was sworn into office, but rather merely receded only to return when this coalition failed to find a way to continue moving forward.”

“While this government was one of Israel’s shortest to hold office, it played an historical role by including an Arab party in the coalition and in the decisions made by the national leadership, and therefore paving the way for the possibility of more inclusion by the Arab minority in the political process,” Plesner added.

Air industry could fly back into black next year, IATA says

Global air transport is on course to return to profit after two pandemic-battered years but the war in Ukraine and the cost-of-living crisis lurk as threats, the industry’s world body said on Monday.

Renewed profitability “appears within reach” in 2023, the International Air Transport Association said, predicting a rebound in passenger levels to 83 percent of pre-pandemic levels this year.

Industry losses are expected to drop to $9.7 billion in 2022, a “huge improvement” from $137.7 billion in 2020 and $42.1 billion in 2021, IATA said in an upgraded industry outlook at its annual general meeting in Doha.

“Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty,” IATA director general Willie Walsh said.

The air industry was sent reeling by the pandemic, with passenger numbers plunging 60 percent in 2020 and remaining 50 percent down in 2021. Airlines lost nearly $200 billion over two years.

While some firms in the sector went bankrupt, others — often those backed by states — have emerged with profits intact.

IATA said there were positive signs in the latest figures, with North American carriers expected to return an $8.8 billion profit this year.

More than 1,200 aircraft are expected to be delivered in 2022, while cargo volumes should reach a record 68.4 million tonnes “despite economic challenges”, it added.

“Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fuelling a resurgence in demand that will see passenger numbers reach 83 percent of pre-pandemic levels in 2022,” IATA said.

– Clouds on the horizon –

Turnover should reach 93 percent of 2019 levels this year or $782 billion, a rebound of 54.5 percent on 2021, as revenues from passenger flights more than double to $498 billion.

Cargo, a rare bright spot for air transport in the depths of the pandemic, will retreat slightly with revenues of $191 billion — still double the level of 2019.

Clouds remain on the horizon, however, especially the war in Ukraine after the closure of Russian airspace to several long-haul carriers forced them into costly detours.

Airlines, desperate to put the coronavirus pandemic behind them, are facing a potential summer of chaos with shortages and strikes that could threaten their recovery.

In the past few weeks, delays and cancellations caused by a lack of staff at airports and strikes for better pay have wreaked havoc upon travellers.

The problems originate with the pandemic when airlines and airports laid off thousands of workers during its worst-ever crisis. Now, they are scrambling for employees.

However, Walsh played down the difficulties, saying they weren’t widespread and should ease in time.

High inflation will also erode the purchasing power of consumers, although airlines could profit from rising prices and interest rates as their debts are locked in at lower levels.

Meanwhile, the industry remains wary of new coronavirus variations that could close borders once again. 

China is still bound up with restrictions that are depressing the world’s second-biggest domestic market and are creating “chaos” in global logistics, said IATA’s chief economist Marie Owens Thomsen.

IATA originally planned to hold its annual general meeting in Shanghai, but moved it to Qatar as China, pursuing its “zero-Covid” policy, continues to grapple with the pandemic.

Dutch join Germany, Austria, in reverting to coal

The Dutch joined Germany and Austria in reverting to coal power on Monday following an energy crisis provoked by Russia’s invasion of Ukraine.

The Netherlands said it would lift all restrictions on power stations fired by the fossil fuel, which were previously limited to just over a third of output.

Berlin and Vienna made similar announcements on Sunday as Moscow, facing biting sanctions over Ukraine, cuts gas supplies to energy-starved Europe.

“The cabinet has decided to immediately withdraw the restriction on production for coal-fired power stations from 2002 to 2024,” Dutch climate and energy minister Rob Jetten told journalists in The Hague.

The Dutch minister said his country had “prepared this decision with our European colleagues over the past few days”.

Germany however said it still aimed to close its coal power plants by 2030, in light of the greater emissions of climate-changing CO2 from the fossil fuel.

“The 2030 coal exit date is not in doubt at all,” economy ministry spokesman Stephan Gabriel Haufe said at a regular news conference.

The target was “more important than ever”, he added.

– ‘More countries being squeezed’ –

Russia’s invasion of its pro-Western neighbour has sent global prices for energy soaring and raised the prospect of shortages if supplies were to be cut off. 

Russian energy giant Gazprom has already stopped deliveries to a number of European countries, including Poland, Bulgaria, Finland and the Netherlands.

Germany’s reliance on Russian energy imports has made it particularly vulnerable as Moscow looks for leverage against the West.

The Dutch are less reliant, depending on Russia for around 15 percent of their gas supplies compared to the EU average of 40 percent. But they are still concerned.

“I want to emphasise that at the moment there’s no acute gas shortage,” Dutch minister Jetten said. “However, more countries are now being squeezed (by Russia). That worries us.” 

The Dutch government said it was also making an “urgent appeal” to companies and business to save as much energy as possible ahead of the winter.

Germany’s decision to power up its coal power plants came after Gazprom cut deliveries to Germany via the Nord Stream gas pipeline last week.

The move, presented by Gazprom as a technical issue, has been criticised as “political” by Berlin. 

German Economy Minister Robert Habeck, a Green party politician, described the decision to revert to coal as “bitter, but indispensable for reducing gas consumption”.

– ‘Unexpected situation’ –

Austria’s government meanwhile announced Sunday that it would reopen a mothballed coal power station because of power shortages arising from reduced deliveries of gas from Russia.

The authorities would work with the Verbund group, the country’s main electricity supplier, to get the station in the southern city of Mellach back in action, said the Chancellery.

The European Commission noted Monday that “some of the existing coal capacities might be used longer than initially expected” because of the new energy landscape in Europe.   

“We know that the energy mix and the plans of member states will adjust slightly because we are in an unexpected situation,” Commission spokesman Tim McPhie said at a press briefing. 

Germany, Europe’s largest economy, has managed to reduce the share of its natural gas supplied by Russia from 55 percent before the invasion to 35 percent.

The government has also mandated the filling of gas reserves to 90 percent ahead of the European winter at the end of the year, to hedge against a further reduction in supply.

Germany’s government, a coalition between the Social Democrats, Liberals and Greens, aims “ideally” to close all coal power plants by 2030.

Their agreement, reached at the end of last year, brought forward the previous government’s aim to shut the plants by 2038.

burs-dk/jhe/jj

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