Switzerland Seeks a Study of Starting Its Own Cryptocurrency

Switzerland’s government has requested a report into the risks and opportunities of launching its own cryptocurrency, a so-called “e-franc” that would use technology similar to privately launched coins like bitcoin but have backing of the state.

The lower house of the Swiss parliament must now decide whether to back the Federal Council’s request for a study into the subject, which has been discussed in Sweden.

Cryptocurrencies have drawn scrutiny from lawmakers and international governing bodies coming to grips with the technology’s rapid ascent. The coins use encryption and a blockchain transaction database designed to enable anonymous transactions that do not require centralized processing.

Other countries interested

Several countries have begun evaluating the viability of introducing their own state-backed digital currency, with Sweden’s Riksbank saying an e-crown might help counteract issues arising from declining cash use and help make payment systems more robust.

But existing digital currencies such as bitcoin have been hampered by extreme volatility, high-profile hacks and doubts about long-term viability. Venezuela has issued a state-backed coin, but major developed economies have so far steered clear.

The Bank of International Settlement in March warned central banks to think hard about potential risks and spillovers before issuing their own cryptocurrencies.

Swiss bank cautious

In Switzerland, if the proposal is approved, a study will be produced by the Swiss finance ministry. No timing has been given on when it would be published should the go-ahead be given.

Swiss lawmaker Cedric Wermuth, vice president of the Social Democratic Party, called for the study. In its response Thursday, the Swiss government, or Federal Council, backed the proposal to look into it, although it said there were hurdles.

“The Federal Council is aware of the major challenges, both legal and monetary, which would be accompanied by the use of an e-franc,” it said. “It asks that the proposal be adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc.”

The Swiss National Bank has so far been cautious on the issue. Private-sector digital currencies were better and less risky than any version that might be offered by a central bank, SNB governor Andrea Maechler said last month.


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New US Sanctions Hit at Hezbollah-Linked Financier, Companies

The United States sought on Thursday to further choke off funding sources for Iranian-backed Hezbollah, imposing sanctions on its representative to Iran, as well as a major financier and his five companies in Europe, West Africa and the Middle East.

The U.S. Treasury said Mohammad Ibrahim Bazzi was a Hezbollah financier operating through Belgium, Lebanon and Iraq, and was a close associate of Gambia’s former president Yahya Jammeh, who is accused of acquiring vast wealth during his decades-long rule.

It also imposed sanctions on Hezbollah’s representative to Iran, Abdallah Safi Al-Din, who it said served as an interlocutor between Hezbollah and Iran on financial issues.

The department said it had blacklisted Belgian energy services conglomerate Global Trading Group; Gambia-based petroleum company Euro African Group; and Lebanon-based Africa Middle East Investment Holding, Premier Investment Group SAL Offshore and import-export group Car Escort Services. All were designated because they are owned or controlled by Bazzi, the Treasury said.

“The savage and depraved acts of one of Hezbollah’s most prominent financiers cannot be tolerated,” U.S. Treasury Secretary Steven Mnuchin said in a statement.

“This administration will expose and disrupt Hezbollah and Iranian terror networks at every turn, including those with ties to the Central Bank of Iran,” he said.

The sanctions are among a slew of fresh measures aimed at Iran and Hezbollah since U.S. President Donald Trump withdrew from the Iran nuclear deal last week.

U.S. Secretary of State Mike Pompeo is set to outline in a speech in Washington on Monday plans by the United States to build a coalition to look closer at what it sees as Iran’s “destabilizing activities,” spokeswoman Heather Nauert told reporters at the State Department.

In one of the biggest moves this week aimed at clamping down on Iran’s overseas operations, the Treasury sanctioned Iran’s central bank governor, Valiollah Seif.

On Wednesday, the United States, backed by Gulf States, imposed additional sanctions on Hezbollah’s top two leaders, Sayyed Hassan Nasrallah and Naim Qassem.


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UN Forecasting Global Economy Will Expand by Over 3 Percent

The United Nations is forecasting that the global economy will expand by more than 3 percent this year and next year — but it warns that increasing risks could trigger “a shock to investment and trade” and a sharp drop to 1.8 percent growth in 2019.

 

The U.N.’s mid-year report on the World Economic Situation and Prospects launched Thursday says growth in the world economy is surpassing expectations, reflecting further economic expansion in developed countries and broadly favorable investment conditions.

 

However, the report said, “downside risks” have increased including “a rise in the probability of trade conflicts between major economies.”

 

Dawn Holland, chief of the U.N.’s Global Economic Monitoring Branch, cited the Trump administration’s imposition of tariffs in January and proposed new tariffs against China as well as the renegotiation of the U.S. trade agreement with Mexico and Canada, which has left “a void of uncertainty.”

 

There are also negotiations between the European Union and the United States partly linked to tariffs on steel, she said, and an increasing number of disputes have been raised with the World Trade Organization over the last six months.

 

The report said other factors also pose risks including uncertainty over monetary policy, increasing debt levels, and greater geopolitical tensions including in the Korean peninsula, Middle East, South China Sea and Ukraine.

 

But the U.N.’s assessment was generally upbeat citing continued economic improvements over the last several months including accelerating wage growth, improved investment prospects, and the short-term impact of the U.S. fiscal stimulus package.

 

“Many commodity-exporting countries will also benefit from the higher level of energy and metal prices,” the report said.

 

According to the U.N., world growth is now forecast to reach 3.2 percent in both 2018 and 2019, up from its forecast in December of 3 percent growth this year and 3.1 percent next year.

 

While many countries will experience growth, the report said output is expected to decline in central Africa and southern Africa, the report said. And the forecast for economies in transition including Russia and the world’s poorest countries have been revised “marginally downward” for 2018.

 

Assistant Secretary-General for Economic Development Elliott Harris cautioned, however, that “there is a strong need not to become complacent in response to upward trending headline figures.”

 

The report not only highlights the risks to economic growth but “the need to urgently address a number of policy challenges, including threats to the multilateral trading system, high inequality and the renewed rise in carbon emissions,” he told a press conference launching the report.

 

And it warned that if trade tensions and barriers were to “spiral over the course of 2018, through widespread retaliations and extensive disruption to global value chains, this could trigger a sharp drop in global investment and trade.”


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US Warns China Against Imposing ‘Political Correctness’ on US Firms

U.S. officials and politicians say they are increasingly frustrated and looking for ways to fight back against what they see as China’s use of its market power to impose “politically correct” behavior on American companies. Airlines, retailers and hoteliers all have been pressured to alter products and promotions that offended Beijing.

“These actions are outrageous and disturbing,” Deputy Assistant Secretary of State for East Asian and Pacific affairs Alex Wong told American lawmakers Tuesday.

“China is very much well aware that it’s wading through treacherous waters here. And they understand that if they continue along this path, continue to employ these tactics, that will negatively affect the U.S.-China relationship and that there will be consequences,” said Wong during a hearing at Senate Foreign Relations subcommittee on East Asia, The Pacific, and International Cybersecurity Policy.

“The consequences are under review,” Wong added.

His remarks come after American clothing retailer Gap apologized and recalled the sale in the Chinese market of its T-shirts showing a map that’s seen by Beijing as politically incorrect. The T-shirts were also destroyed. 

A Chinese student earlier this week posted pictures of the T-shirt, which did not include Taiwan, parts of Tibet and islands in the South China Sea that Beijing claims are Chinese territories. Gap quickly apologized, citing “unintentional error.” Photos circulated on Chinese social media network Weibo were said to be have been taken at an outlet store in Canada. 

A Chinese government spokesperson took note of Gap’s apology and the American company’s pledge to respect “China’s sovereignty and territorial integrity and is conducting an internal inspection.”

“We have taken note of this statement. We will continue to listen to its [Gap’s] words, and watch the actions,” said Chinese Ministry of Foreign Affairs Spokesperson Lu Kang on Tuesday.

But U.S. officials and lawmakers are hitting back.

“American companies are being bullied,” said Florida Republican Senator Marco Rubio during Tuesday’s Senate Foreign Relations Subcommittee hearing.

Rubio said U.S. airlines “are being threatened by China, that if their website doesn’t say Taiwan [is part of] China, they’re going to lose their routes and have fines and penalties.”

On April 25, the Chinese Civil Aviation Administration sent a letter to 36 foreign air carriers, including a number of American carriers, demanding the carriers remove references on their websites or in other material that suggests Taiwan, Hong Kong and Macau are independent territories from China.

And in January, Beijing requested U.S. hotel giant Marriott International change the way it referred to Tibet, Taiwan, Hong Kong and Macau to be in line with Beijing’s views.

The request came after a Marriott employee “liked” a tweet by Friends of Tibet that praised Marriott for “listing #Tibet as a country along with #HongKong and #Taiwan” in an online customer questionnaire.

The employee was fired and Marriott apologized to Beijing.

Observers said market access to the growing population of affluent Chinese consumers leads to American companies’ compliance.

“It’s totally based on market strategy or, more precisely, fear of being shut out of the China market,” Brooking Institution’s Senior Fellow Richard Bush told VOA on Thursday. 

U.S. officials said they have raised this issue privately with their Chinese counterparts, while also condemning Beijing’s actions in public. U.S. officials have also talked with companies who have been involved in the incidents.

China claims democratically ruled Taiwan is part of its territory, and it has never renounced the use of military force to bring the island under Beijing’s control. The U.S. broke diplomatic ties with Taiwan in 1979 and has “acknowledged” Beijing’s position, while insisting on a “peaceful resolution of cross-Strait differences.”


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Trump Meets Chinese Vice Premier Amid Tough Trade Talks 

President Donald Trump stepped into a round of tough trade talks with China on Thursday after the White House confirmed a meeting between the U.S. president and Chinese Vice Premier Liu He.

The two world powers are taking part in a second series of trade negotiations that started Thursday. The initial talks were held in Beijing two weeks ago.

Speaking to reporters before his meeting with Liu, Trump repeated his strong dislike for previous deals between Washington and Beijing.

“The United States has been ripped off for many, many years by its bad trade deals. I don’t blame China; I blame the leadership of this country from the past,” Trump told reporters before a meeting with NATO Secretary-General Jens Stoltenberg.

“China has taken out hundreds of billions of dollars a year from the United States, and I explained to President Xi [Jinping] we can’t do that anymore,” Trump added.

The talks are aimed at “rebalancing the United States-China bilateral economic relationship,” according to the White House. They are also aimed at avoiding a full-blown trade war after the two countries exchanged tariff threats in March.

Despite the tough talks, Trump tweeted over the weekend that he was working with Xi to give Chinese phone company ZTE a way to get back into business.

The U.S. slapped sanctions against the Chinese telecommunications company last month for breaking U.S. trade control laws by selling components to Iran and North Korea. The move prompted ZTE to shut down its U.S. operations.

U.S. law enforcement and intelligence communities have long had national security and espionage concerns about ZTE.

“ZTE was a company I spoke to with President Xi. He asked me if I could take a look at that, because it was very harmful to them in terms of their jobs and probably other things, and I certainly said I would — he asked me to do it, and I would do that. I like him, he likes me, we have a great relationship,” Trump said in explaining his tweet to reporters. 

Trump noted it was his administration that had first put strong clamps on ZTE.

“Anything we do with ZTE is just a small component of the overall deal. I can only tell you this: We are going to come out fine with China,” Trump said. “When you’re losing $500 billion a year on trade, you can’t lose the trade war, you’ve already lost it.”

Liu, who is Xi’s top economic adviser, is taking part in two days of talks with a U.S. trade delegation led by Treasury Secretary Steve Mnuchin.

Trump’s top economic adviser, Larry Kudlow, told reporters Wednesday that the administration was conducting “very serious” talks with China, and that Trump was “very hands-on” and “involved in every decision.”

“We have requested that China change their trading practices, which are unfair and in many ways illegal,” Kudlow said.

“This is with respect to the issue of theft of technology, forced transfers of technology, high tariffs and non-tariff barriers” that are preventing the United States from making a competitive effort to export goods and services to China, he said.

The economic adviser said the administration had given China a “lengthy, detailed list” of what the U.S. wanted, including narrowing the U.S.-China trade deficit, lowering non-tariff barriers and permitting American ownership of its own companies in China. 

“Right now, the limit is 49 percent and that’s one of the causes of the theft and transfer of viable technology,” Kudlow said. “When we do these joint ventures, we should have to own 51 percent on to 100 percent. That’s a key part of these talks.”


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Trump: US Has Not ‘Folded’ in Trade Dealing with China

President Donald Trump says the United States has not “folded” in trade negotiations with China as both countries get set for another round of meetings.

“We have not seen China’s demands yet,” Trump tweeted Wednesday. “The U.S. has very little to give because it has given so much over the years. China has much to give.”

U.S. Treasury Secretary Steve Mnuchin opens two days of talks in Washington with Chinese officials Thursday.

“These meetings are a continuation of the talks held in Beijing two weeks ago and will focus on rebalancing the United States-China bilateral economic relationship,” the White House says.

They are also aimed at avoiding a full-blown trade war after the U.S. and China exchanged tariffs in March.

Trump told the country Wednesday that the U.S. has been losing hundreds of billions of dollars a year and countless U.S. manufacturing jobs because of its trade deficit with China.

But despite his tough talks on China, Trump wants to rescue China’s giant technology company ZTE, puzzling many lawmakers.

ZTE was forced to close one of its plants and cease major operations after the U.S. Commerce Department barred it from buying American-made components for its consumer products. ZTE had been using those components in goods sold to Iran and North Korea, a violation of U.S. trade embargoes.

The president said earlier this week that “too many jobs” were being lost in China because of ZTE’s problems, and he ordered the Commerce Department to help it “get back into business, fast.”

Republican Senator Marco Rubio told VOA that the Commerce Department’s sanctions on ZTE are “a law enforcement function that really shouldn’t have anything to do with trade. … Chinese telecom companies are agents of the Chinese government. They don’t just steal national security secrets, they steal commercial secrets.”

House Democratic Leader Nancy Pelosi also talked to VOA, saying Trump does not know how to fight when it comes to balancing trade issues.

“The president talked big about wanting to have a fair trade relationship with China and folded immediately on the ZTE issue.”

Pelosi said Trump’s motives over ZTE are hard to understand, but said he will face serious opposition in Congress if he tries to use ZTE as a bargaining chip.

Michael Bowman and VOA Mandarin contributed to this report.


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Argentina’s Currency Crisis Over, Macri says

President Mauricio Macri said Wednesday that Argentina’s currency crisis is over, speaking as the country’s currency rebounded somewhat and prices for its stocks and bonds rose.

 

Macri announced last week that Argentina was seeking a financing deal with the International Monetary Fund following a sharp drop in the peso. The decision brought back haunting memories for Argentines who blame the IMF for introducing policies that led to the country’s 2001 economic implosion.

 

Argentina was forced to impose interest rate hikes and to tighten the fiscal deficit target to try to halt the devaluation of its currency, which has lost about 25 percent of its value in recent weeks.

 

The peso hit a new all-time low of 25.30 to the U.S. dollar Monday. But it rose at 24.8 per dollar Wednesday and Argentine stocks and bonds rose.

 

Macri said his government thinks it has “overcome” the turbulence over the currency. He also said he will demand “an intelligent” deal with the IMF.

 

“It’s important to recognize the moment of nervousness and anguish lived by a sector of the population,” Macri told reporters at the presidential palace.

 

“There was fear and anguish. Today, we have a different climate, but we must take a balance of what happened.”

 

The economic turbulence highlighted the frailty of Argentina’s economy despite austerity measures imposed by Macri, a conservative who has vowed to boost growth and curb Argentina’s high inflation.

 

Macri’s government has requested a “high-access stand-by arrangement” from the IMF to meet its debt obligations without risking a disruption of economic growth.

 

“With this deal, we will potentialize the future of Argentines,” Macri said.

 

The crisis 17 years ago resulted in one of every five Argentines being unemployed and millions sliding into poverty. The peso, which had been tied to the dollar, lost nearly 70 percent of its value.

 

Many Argentines have blamed the IMF since then for its role in Argentina’s record debt default of more than $100 billion.

 

A survey by Argentine pollsters D’Alessio Irol/Berensztein said 75 percent of Argentines feel that seeking assistance from the IMF is a bad move. The survey of 1,077 people in early May had a margin of error of three percentage points.


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Amsterdam Determined to Tame Tourism

Amsterdam unveiled far-reaching plans Wednesday to rein in tourism, reflecting the dissatisfaction of many residents who feel the city’s historic center has been overrun.

The leading Green-Left and other parties negotiating a new municipal government after March elections vowed to return “Balance to the City,” in a document of that name seen by Reuters.

“The positive sides of tourism such as employment and city revenues are being more and more overshadowed by the negative consequences,” including trash and noise pollution, the document said.

Changes the document outlines include curtailing “amusement transportation” such as multiperson “beer bikes”; cracking down on alcohol use in boats on the canals; further restricting Airbnb and other home rentals; and a large tax hike.

The plans announced Wednesday also include creating an inventory of all commercial beds in the city to try to cap various sectors, such as those on cruise ships and in hotels.

“I’m very happy that the city is now finally taking action, because residents have been asking for it for a very long time,” said Bert Nap of neighborhood organization d’Oude Binnenstad, in the historic center.

“What I’m worried about is that this package of measures is so drastic that there will be a lot of lawsuits and political resistance, which will cost a lot of time.”

He said the city was suffering from too many visitors in general, which had the effect of changing the character of the center into one big tourist attraction. He also said some unruly, drunken tourists were making the city center an unattractive place for local residents.

Edgy lure

With a population of around 800,000, the city expects 18 million tourists in 2018, an increase of 20 percent from 2016 levels, many drawn by an edgy atmosphere generated by readily available soft drugs and the “red light” sex zone.

Anti-tourist and anti-expatriate sentiment have been steadily on the rise in Amsterdam, as both are blamed in part for helping drive housing prices increasingly out of the reach of ordinary Dutch people.

The average apartment in Amsterdam cost 407,000 euros ($475,000) in 2017, an increase of around 12 percent from 2016 levels, according to national real estate association NVM.

The change of emphasis has already started from national government over the past years, to try to dissuade visitors from the more earthy pastimes the city is famous for.

Advertising campaigns have focused on the city’s canals, the Anne Frank House and the museums packed with the greatest works of Van Gogh and Rembrandt.

Legislators have helped the rebranding, shutting a third of the city’s brothels in 2008 and starting a program in 2011 to close marijuana cafes located near schools.

“Amsterdam is a city to live and work in — it’s only a tourist destination in the second place,” the municipal document said.


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US Pushes for NAFTA Deal as Thursday Deadline Approaches

The United States is pushing for a deal in negotiations on a revised North American Free Trade Agreement (NAFTA), the White House said Wednesday, but Canadian and Mexican officials were not due in Washington for talks before a Thursday deadline.

President Donald Trump is committed to getting a better agreement with Canada and Mexico, press secretary Sarah Sanders told Fox News.

“We still want to see something happen and we’re going to continue in those conversations. They’re ongoing now and we’re pushing forward and hopeful that we can get something done soon,” Sanders said.

On Tuesday, Mexico’s economy minister said he saw diminishing chances for a new NAFTA agreement before a Thursday deadline to present a deal that could be signed by the U.S. Congress.

Neither the Mexican minister, Ildefonso Guajardo, nor Canadian Foreign Affairs Minister Chrystia Freeland had plans to travel to Washington on Wednesday, their representatives said.

U.S. House Speaker Paul Ryan has said that the Republican-controlled Congress would need to be notified of a new deal by Thursday to give lawmakers a chance to approve it before a newly elected Congress takes over in January.

Sanders did not address the timeline.

“We’ve got to get a deal that works for everybody, but most importantly this president is going to make sure that we get a deal that works for America,” she said. “He’s not going to stop until he gets it.”

Ryan said Congress cannot begin working on the negotiating law known as “fast track” without a trade deal in hand.

“The point is, we can’t work a bill unless we have an agreement that’s in writing that we can work on and that hasn’t occurred yet,” Ryan told reporters at the U.S. Capitol.


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Venezuela Reactivates Kellogg Plant After Company Pullout

Venezuelan authorities said they were reactivating a Kellogg Co plant under worker control Wednesday, a day after the U.S. multinational food producer pulled out of the crisis-hit country.

Kellogg joined a host of other multinationals in exiting Venezuela and later confirmed President Nicolas Maduro’s leftist government had taken over its manufacturing plant.

On Wednesday, Aragua state Governor Marco Torres slammed Kellogg and guaranteed food production would continue.

“With no notification, this U.S.-based multinational decided to close its doors, leaving 570 workers hanging,” said Torres at the plant, in Maracay. “Yet, we’re here — in less than 24 hours.”

Millions in Venezuela suffer food and medicine shortages amid hyperinflation. Maduro blames Venezuela’s crisis on an “economic war” that he says is being waged by Washington, greedy businessmen and coup-mongers.

He is expected to win Sunday’s presidential election, described by the opposition as a sham.

Clorox, Kimberly-Clark, General Mills, General Motors and Harvest Natural Resources are the most recent big names to pull out of Venezuela in the face of economic conditions.

Opposition critics scoffed that the government would quickly plunder the Kellogg plant and ruin its business.


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