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Why Mario Draghi taking charge of Italy is great news for the EU (and also America)

The former European Central Bank supremo has been generally seen as a good hire for Italy, but there are also global issues at play.

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The news that Mario Draghi has become prime minister of Italy has been saluted by many commentators as great news for the nation. Italy is in desperate need of a strong guide to save the country from one of its worst crises since the second world war, and the 73-year-old former president of the European Central Bank (ECB) is seen as having all the requisite skills.

Yet while most of the attention has focused on what it means for Europe’s fourth-largest economy, it needs to be acknowledged that Draghi’s appointment is also critical for the EU and the US. Here are four reasons why.

1. How to recover

One of Draghi’s new key responsibilities is to redesign the recovery plan that will determine how Italy spends the €209 billion (£180 billion) being provided by the EU in grants and loans over the coming years. A major criticism of Italy’s previous government led by Giuseppe Conte was the dearth of details on how these resources would actually be allocated and their usage monitored. Draghi’s mission will be to bring the plan to the next level while ensuring its proper execution.

His leadership and direction in this role can be an example for other member states as they decide how to spend their share of the EU’s overall €750 billion recovery fund. Italy is the largest recipient of the fund together with Spain, but both have poor records in deploying resources from Brussels. Draghi’s world-renowned competence on these matters – in conjunction with the fine political skills he forged leading the ECB – can therefore be crucial for the entire EU as so much of the recovery fund’s success will depend on Italy.

In a possible foretaste of what to expect, Draghi made an important speech in August 2020 at a Catholic convention in Rimini, Italy. In what was one of very few public appearances since leaving the ECB the previous October, Draghi emphasised the fundamental difference between “good” and “bad” debt.

He explained that only debt used for investment in people, key infrastructure and research is sustainable in the longer term. Conversely, debt used for unproductive purposes – for instance, the eye-watering €10 billion of public money that the airline Alitalia burned in the 2008-20 period) – would not promote the growth that Italy and the EU desperately need, even borrowed at today’s very low interest rates. This was a crucial lesson that other EU nations will do well to heed.

2. Stable markets

In the midst of the pandemic and with a vaccination campaign that is lagging behind rival economies, the EU cannot afford to have Italy at the brink of a financial crisis anytime soon. Draghi’s superior knowledge and understanding of financial markets are therefore another reason that he is the ideal leader to take Italy’s helm in these turbulent times.

His success as ECB president, especially his key role in overcoming the European sovereign debt crisis of 2010-12, is a strong signal to the markets that Italy is in the safest possible hands. Since his appointment, the gap (or spread) between the rates at which Germany and Italy can borrow has duly shrunk to around 90 basis points, at -0.43% and 0.48% respectively, which is the lowest in over a decade. Assuming this stability continues, it will benefit the whole bloc.

Italian/German ten-year bond spread

Graph of spread between German and Italian ten-year bond spreads
The y-axis represents basis points, which are each a hundredth of a percentage point. Borsa Italiana

3. Foreign investment

The EU desperately needs to attract foreign investments to remain competitive. A new UN report has confirmed that global foreign investment plummeted 42% in 2020 to US$859 billion (£611 billion), and the damage was very uneven. Inflows into developing Asia only fell 4%, while the US fell 50% and the EU fell two-thirds. Germany registered a 60% drop, France 40%, while for Italy the drop was even higher than 100% – in other words, inflows dropped into negative territory, mainly due to large divestments by international companies. Conversely, Chinese inflows rose 4% year on year, while India’s were up 13%.

To remain competitive in the global competitive landscape, the EU therefore urgently needs to attract more investment from abroad. This will be fundamentally driven by the stability of the market and its future economic outlook. There is no better leader than Draghi to set the direction on how to regain international competitiveness while reassuring foreign investors on the future of Italy and, in turn, the EU.

4. American re-engagement

To counter China’s global ambitions, President Biden will need to revitalise the partnership with the EU after the tensions of the Trump era. With Angela Merkel soon to step down, Emmanuel Macron facing elections early in 2022, and Britain off the EU stage, Draghi will be a crucial American ally for Biden in the EU.

Major issues will include managing the trade relationships between the US and the EU in the aftermath of the new EU-China investment deal that was announced just weeks before Biden arrived at the White House. And helping to resolve the trade tensions in relation to the long-running fight over state subsidies between Boeing and European rival Airbus.

Draghi is very popular in the US and has often been considered as the most American among European bankers. This is partly because of his days as Goldman Sachs’ vice president, but mainly because of his strong partnership with Janet Yellen when the two were the world’s most powerful central bankers during the crisis-ridden 2010s. Following Yellen’s appointment as the US secretary of the treasury in January 2021, the US can again count on this duo.

For all these reasons, we should not underestimate how important Draghi at Italy’s helm can be for both the EU and the US at such a difficult moment for the global economy.

Niccolò Pisani tidak bekerja, menjadi konsultan, memiliki saham, atau menerima dana dari perusahaan atau organisasi mana pun yang akan mengambil untung dari artikel ini, dan telah mengungkapkan bahwa ia tidak memiliki afiliasi selain yang telah disebut di atas.

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There will soon be one million seats on this popular Amtrak route

“More people are taking the train than ever before,” says Amtrak’s Executive Vice President.

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While the size of the United States makes it hard for it to compete with the inter-city train access available in places like Japan and many European countries, Amtrak trains are a very popular transportation option in certain pockets of the country — so much so that the country’s national railway company is expanding its Northeast Corridor by more than one million seats.

Related: This is what it's like to take a 19-hour train from New York to Chicago

Running from Boston all the way south to Washington, D.C., the route is one of the most popular as it passes through the most densely populated part of the country and serves as a commuter train for those who need to go between East Coast cities such as New York and Philadelphia for business.

Veronika Bondarenko captured this photo of New York’s Moynihan Train Hall. 

Veronika Bondarenko

Amtrak launches new routes, promises travelers ‘additional travel options’

Earlier this month, Amtrak announced that it was adding four additional Northeastern routes to its schedule — two more routes between New York’s Penn Station and Union Station in Washington, D.C. on the weekend, a new early-morning weekday route between New York and Philadelphia’s William H. Gray III 30th Street Station and a weekend route between Philadelphia and Boston’s South Station.

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According to Amtrak, these additions will increase Northeast Corridor’s service by 20% on the weekdays and 10% on the weekends for a total of one million additional seats when counted by how many will ride the corridor over the year.

“More people are taking the train than ever before and we’re proud to offer our customers additional travel options when they ride with us on the Northeast Regional,” Amtrak Executive Vice President and Chief Commercial Officer Eliot Hamlisch said in a statement on the new routes. “The Northeast Regional gets you where you want to go comfortably, conveniently and sustainably as you breeze past traffic on I-95 for a more enjoyable travel experience.”

Here are some of the other Amtrak changes you can expect to see

Amtrak also said that, in the 2023 financial year, the Northeast Corridor had nearly 9.2 million riders — 8% more than it had pre-pandemic and a 29% increase from 2022. The higher demand, particularly during both off-peak hours and the time when many business travelers use to get to work, is pushing Amtrak to invest into this corridor in particular.

To reach more customers, Amtrak has also made several changes to both its routes and pricing system. In the fall of 2023, it introduced a type of new “Night Owl Fare” — if traveling during very late or very early hours, one can go between cities like New York and Philadelphia or Philadelphia and Washington. D.C. for $5 to $15.

As travel on the same routes during peak hours can reach as much as $300, this was a deliberate move to reach those who have the flexibility of time and might have otherwise preferred more affordable methods of transportation such as the bus. After seeing strong uptake, Amtrak added this type of fare to more Boston routes.

The largest distances, such as the ones between Boston and New York or New York and Washington, are available at the lowest rate for $20.

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The next pandemic? It’s already here for Earth’s wildlife

Bird flu is decimating species already threatened by climate change and habitat loss.

I am a conservation biologist who studies emerging infectious diseases. When people ask me what I think the next pandemic will be I often say that we are in the midst of one – it’s just afflicting a great many species more than ours.

I am referring to the highly pathogenic strain of avian influenza H5N1 (HPAI H5N1), otherwise known as bird flu, which has killed millions of birds and unknown numbers of mammals, particularly during the past three years.

This is the strain that emerged in domestic geese in China in 1997 and quickly jumped to humans in south-east Asia with a mortality rate of around 40-50%. My research group encountered the virus when it killed a mammal, an endangered Owston’s palm civet, in a captive breeding programme in Cuc Phuong National Park Vietnam in 2005.

How these animals caught bird flu was never confirmed. Their diet is mainly earthworms, so they had not been infected by eating diseased poultry like many captive tigers in the region.

This discovery prompted us to collate all confirmed reports of fatal infection with bird flu to assess just how broad a threat to wildlife this virus might pose.

This is how a newly discovered virus in Chinese poultry came to threaten so much of the world’s biodiversity.

H5N1 originated on a Chinese poultry farm in 1997. ChameleonsEye/Shutterstock

The first signs

Until December 2005, most confirmed infections had been found in a few zoos and rescue centres in Thailand and Cambodia. Our analysis in 2006 showed that nearly half (48%) of all the different groups of birds (known to taxonomists as “orders”) contained a species in which a fatal infection of bird flu had been reported. These 13 orders comprised 84% of all bird species.

We reasoned 20 years ago that the strains of H5N1 circulating were probably highly pathogenic to all bird orders. We also showed that the list of confirmed infected species included those that were globally threatened and that important habitats, such as Vietnam’s Mekong delta, lay close to reported poultry outbreaks.

Mammals known to be susceptible to bird flu during the early 2000s included primates, rodents, pigs and rabbits. Large carnivores such as Bengal tigers and clouded leopards were reported to have been killed, as well as domestic cats.

Our 2006 paper showed the ease with which this virus crossed species barriers and suggested it might one day produce a pandemic-scale threat to global biodiversity.

Unfortunately, our warnings were correct.

A roving sickness

Two decades on, bird flu is killing species from the high Arctic to mainland Antarctica.

In the past couple of years, bird flu has spread rapidly across Europe and infiltrated North and South America, killing millions of poultry and a variety of bird and mammal species. A recent paper found that 26 countries have reported at least 48 mammal species that have died from the virus since 2020, when the latest increase in reported infections started.

Not even the ocean is safe. Since 2020, 13 species of aquatic mammal have succumbed, including American sea lions, porpoises and dolphins, often dying in their thousands in South America. A wide range of scavenging and predatory mammals that live on land are now also confirmed to be susceptible, including mountain lions, lynx, brown, black and polar bears.

The UK alone has lost over 75% of its great skuas and seen a 25% decline in northern gannets. Recent declines in sandwich terns (35%) and common terns (42%) were also largely driven by the virus.

Scientists haven’t managed to completely sequence the virus in all affected species. Research and continuous surveillance could tell us how adaptable it ultimately becomes, and whether it can jump to even more species. We know it can already infect humans – one or more genetic mutations may make it more infectious.

At the crossroads

Between January 1 2003 and December 21 2023, 882 cases of human infection with the H5N1 virus were reported from 23 countries, of which 461 (52%) were fatal.

Of these fatal cases, more than half were in Vietnam, China, Cambodia and Laos. Poultry-to-human infections were first recorded in Cambodia in December 2003. Intermittent cases were reported until 2014, followed by a gap until 2023, yielding 41 deaths from 64 cases. The subtype of H5N1 virus responsible has been detected in poultry in Cambodia since 2014. In the early 2000s, the H5N1 virus circulating had a high human mortality rate, so it is worrying that we are now starting to see people dying after contact with poultry again.

It’s not just H5 subtypes of bird flu that concern humans. The H10N1 virus was originally isolated from wild birds in South Korea, but has also been reported in samples from China and Mongolia.

Recent research found that these particular virus subtypes may be able to jump to humans after they were found to be pathogenic in laboratory mice and ferrets. The first person who was confirmed to be infected with H10N5 died in China on January 27 2024, but this patient was also suffering from seasonal flu (H3N2). They had been exposed to live poultry which also tested positive for H10N5.

Species already threatened with extinction are among those which have died due to bird flu in the past three years. The first deaths from the virus in mainland Antarctica have just been confirmed in skuas, highlighting a looming threat to penguin colonies whose eggs and chicks skuas prey on. Humboldt penguins have already been killed by the virus in Chile.

A colony of king penguins.
Remote penguin colonies are already threatened by climate change. AndreAnita/Shutterstock

How can we stem this tsunami of H5N1 and other avian influenzas? Completely overhaul poultry production on a global scale. Make farms self-sufficient in rearing eggs and chicks instead of exporting them internationally. The trend towards megafarms containing over a million birds must be stopped in its tracks.

To prevent the worst outcomes for this virus, we must revisit its primary source: the incubator of intensive poultry farms.

Diana Bell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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This is the biggest money mistake you’re making during travel

A retail expert talks of some common money mistakes travelers make on their trips.

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Travel is expensive. Despite the explosion of travel demand in the two years since the world opened up from the pandemic, survey after survey shows that financial reasons are the biggest factor keeping some from taking their desired trips.

Airfare, accommodation as well as food and entertainment during the trip have all outpaced inflation over the last four years.

Related: This is why we're still spending an insane amount of money on travel

But while there are multiple tricks and “travel hacks” for finding cheaper plane tickets and accommodation, the biggest financial mistake that leads to blown travel budgets is much smaller and more insidious.

A traveler watches a plane takeoff at an airport gate.

Jeshoots on Unsplash

This is what you should (and shouldn’t) spend your money on while abroad

“When it comes to traveling, it's hard to resist buying items so you can have a piece of that memory at home,” Kristen Gall, a retail expert who heads the financial planning section at points-back platform Rakuten, told Travel + Leisure in an interview. “However, it's important to remember that you don't need every souvenir that catches your eye.”

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According to Gall, souvenirs not only have a tendency to add up in price but also weight which can in turn require one to pay for extra weight or even another suitcase at the airport — over the last two months, airlines like Delta  (DAL) , American Airlines  (AAL)  and JetBlue Airways  (JBLU)  have all followed each other in increasing baggage prices to in some cases as much as $60 for a first bag and $100 for a second one.

While such extras may not seem like a lot compared to the thousands one might have spent on the hotel and ticket, they all have what is sometimes known as a “coffee” or “takeout effect” in which small expenses can lead one to overspend by a large amount.

‘Save up for one special thing rather than a bunch of trinkets…’

“When traveling abroad, I recommend only purchasing items that you can't get back at home, or that are small enough to not impact your luggage weight,” Gall said. “If you’re set on bringing home a souvenir, save up for one special thing, rather than wasting your money on a bunch of trinkets you may not think twice about once you return home.”

Along with the immediate costs, there is also the risk of purchasing things that go to waste when returning home from an international vacation. Alcohol is subject to airlines’ liquid rules while certain types of foods, particularly meat and other animal products, can be confiscated by customs. 

While one incident of losing an expensive bottle of liquor or cheese brought back from a country like France will often make travelers forever careful, those who travel internationally less frequently will often be unaware of specific rules and be forced to part with something they spent money on at the airport.

“It's important to keep in mind that you're going to have to travel back with everything you purchased,” Gall continued. “[…] Be careful when buying food or wine, as it may not make it through customs. Foods like chocolate are typically fine, but items like meat and produce are likely prohibited to come back into the country.

Related: Veteran fund manager picks favorite stocks for 2024

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