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China is pressing India to restart direct passenger flights after a four-year halt, but New Delhi is resisting as a border dispute continues to weigh on ties between the world's two most populous countries, officials said.India-China relations have been tense since the biggest military confrontation in decades on their disputed Himalayan border killed 20 Indian and at least four Chinese soldiers in June 2020. Thousands of troops remain mobilised on each side.Since the clash, India has made it difficult for Chinese companies to invest, banned hundreds of popular apps and severed passenger routes, although direct cargo flights still operate between the Asian giants.Direct flights would benefit both economies, but the stakes are higher for China, where a recovery in overseas travel after the Covid-19 pandemic is lagging, while India's aviation sector booms.Several times over the past year or so, China's government and airlines have asked India's civil aviation authorities to re-establish direct air links, two people with direct knowledge of the matter said, with one saying China considers this a "big issue"."We hope the Indian side will work with China in the same direction for the early resumption of direct flights," China's foreign ministry said in a statement last week, adding that resuming flights would be in both countries' interests.But a senior Indian official familiar with India-China bilateral developments said of Beijing's desire to resume flights: "Unless there is peace and tranquillity on the border, the rest of the relationship cannot move forward."Indian airlines are holding discussions with New Delhi, while Chinese carriers are talking to their government about resuming direct routes, CEO Pieter Elbers of Indigo, India's largest airline, said.India's external affairs and civil aviation ministries did not respond to requests for comment.Beijing has repeatedly protested India's ramped up scrutiny of Chinese businesses since 2020. Chinese smartphone giant Xiaomi told India's government this year that "confidence building" measures were needed as component suppliers were wary about setting up in India, citing compliance and visa issues.Direct India-China flights peaked in December 2019, with a total of 539 scheduled flights by the likes of IndiGo, Air India, China Southern, China Eastern, Air China and Shandong Airlines, data from aviation analytics firm Cirium shows.Chinese carriers scheduled 371 of those flights, more than double the 168 by India's airlines.Flights were halted four months later as the pandemic escalated. Except for a smattering of Covid repatriation flights, they have not resumed even though India lifted Covid restrictions on international air routes a year later and China lifted all Covid travel measures in early 2023.Travellers must now change planes either in Hong Kong, which has a separate aviation regulator and border controls from the rest of China, or in hubs like Dubai or Singapore.This has lengthened the India-China journey from less than six hours to upwards of 10, handing business - including lucrative through traffic to the US - to carriers like Emirates, Singapore Airlines and Cathay Pacific .The recovery in Chinese overseas travel is lagging due to rising costs and difficulties in securing visas for the world's top spenders on international tourism and airlines.Indigo's Elbers said a recent interview in Dubai, "When the time is right and the governments come to a mutual understanding of how to move forward, we'll assess the market."IndiGo flies seven times a week on the Delhi-Hong Kong route, where passengers can connect to mainland China.Air India CEO Campbell Wilson said direct India-China flights "would seem to be a huge potential market" but for now there are factors at play "beyond our level".

Over the past two decades, the productivity gap between Europe and the United States has steadily widened, with labour productivity in the US growing at more than twice the pace of the eurozone’s. The European “competitiveness crisis” can be attributed to several factors, including insufficient public and private investment, a shortage of tech firms and venture-capital funds, and the continent’s demographic decline. Another possible explanation that is often overlooked is the decline in foreign direct investment (FDI).FDI is a crucial driver of productivity growth, introducing recipient countries to new technologies, knowledge, and management skills. After falling by 4% in 2023, Europe’s FDI inflows are now 14% below their 2017 peak. Germany experienced a sharp 12% drop in foreign investment last year, undermining its post-pandemic recovery. In the United Kingdom, inward FDI declined by nearly 30% since 2016-17, as Brexit prompted foreign firms to redirect investments to other European countries. French policymakers seem determined to benefit from this shift, with President Emmanuel Macron actively marketing his country to foreign investors.Attracting FDI is crucial for the European Union as it grapples with two emerging challenges: de-risking its supply chains and preventing member states’ economies from experiencing a China shock similar to the one the US experienced after China joined the World Trade Organisation in 2001.FDI flows may play a key role in addressing both of these challenges. Climate change and heightened geopolitical tensions have made global supply chains increasingly vulnerable, especially since most inputs for green industries, such as semiconductors and battery cells for electric vehicles (EVs), come from Taiwan, South Korea, and China. A 2012 paper by MIT economist Daron Acemoglu and co-authors suggests that such geographic concentrations of input suppliers increase the risk of economic shocks. As supply disruptions reverberate across the global economy, they create multiplier effects that compound the initial disruption.Moreover, firms cannot protect themselves against such disruptions by diversifying their suppliers, since no alternative sources are available outside Asia. This vulnerability was underscored in 2021 when the Taiwan Semiconductor Manufacturing Company (TSMC) had to shut down some of its factories due to the Covid-19 pandemic and a severe drought, halting automobile production worldwide.To foster diversification, the EU has begun subsidising foreign investments in battery cells and semiconductors through the European Chips Act and the European Battery Alliance. Much like the Inflation Reduction Act and the CHIPS and Science Act in the US, these measures aim to ensure that enough alternative suppliers are available in the event of a climate disaster or geopolitical conflict.Despite these efforts, however, there are signs that Europe has begun to experience its own China shock. In 2022, for the first time ever, Germany imported more cars and machinery from China than it exported. A recent study by Allianz Research finds that China has surpassed Germany in key sectors of the global export market. For example, China’s share of machinery and equipment exports increased to 29% in 2022, compared to Germany’s 15%. While Germany still leads in exports of automobiles and transport equipment, with a 17% share compared to China’s 9%, its lead is diminishing.This should alarm policymakers for two reasons. First, losing its lead in critical high-tech sectors poses a major threat to Germany’s economic model. Second, a European China shock could fuel the rise of far-right parties like the German Alternative für Deutschland (AfD).The US should serve as a cautionary tale. The China shock of the early 2000s had a devastating impact on manufacturing regions, as workers displaced by Chinese competition struggled to find new jobs and often had to settle for significantly lower wages. The decline in manufacturing employment contributed to an epidemic of “deaths of despair” – from suicide, drug overdoses, and alcoholism-related liver disease – and set the stage for Donald Trump’s victory in the 2016 presidential election.With this in mind, EU policymakers are considering imposing import tariffs on Chinese EVs. In a recent speech, European Commission President Ursula von der Leyen said that the Commission has launched an anti-subsidy investigation into the Chinese EV industry and accused China of violating fair competition rules in an effort to “flood our market with massively subsidised electric cars.”US President Joe Biden’s decision to impose a 100% tariff on Chinese-made EVs is likely to redirect Chinese EV exports from the US to Europe, which leaves European policymakers with no choice but to impose their own import tariffs.Such a move could have the added benefit of boosting Chinese FDI flows to the EU, as Chinese carmakers might try to bypass import tariffs by building new factories in Europe and selling EVs directly to European consumers.But more must be done. By forming partnerships with companies in technologically advanced economies like China, Taiwan, South Korea, and Israel, European firms could bridge the EV and digital knowledge gap and increase FDI flows to the EU. For decades, China has used this strategy to become a world leader in green technologies, forcing Western companies to form joint ventures with domestic manufacturers to access the vast Chinese market.Today, the roles are reversed: China is now a technologically advanced economy seeking access to the large EU market for its EVs, and European countries lack the necessary technical expertise to remain competitive. To boost FDI flows and improve its competitiveness, the EU should reverse engineer China’s industrial policy and require Chinese EV manufacturers to establish joint ventures with domestic companies in exchange for market access. — Project SyndicateDalia Marin, Professor of International Economics at the School of Management of the Technical University of Munich, is a research fellow at the Centre for Economic Policy Research and a non-resident fellow at Bruegel.

Unlike in other countries, the far right in Denmark did not dominate this month’s European elections. Although populism surged in the country a decade ago, the parties at the centre have pushed the far right to the fringes and are now back in control. In the 2014 European Parliament election, the far-right Danish People’s Party (DPP) shocked the political establishment by winning the largest number of seats, with the party’s main candidate setting a national record for personal votes received. Then, the DPP triumphed in the general election one year later, to become the largest party in the conservative bloc, and the second-largest party in parliament. But in the European elections this month, the Danish far right was left scrambling to hold on to just one seat. What happened? Since the shock of 2014, the established political parties, led by the Social Democrats and the current prime minister, Mette Frederiksen, have adopted elements of the far right’s policy positions, especially on immigration, which is generally seen as the main driving force behind the rise of populism. Whereas Denmark once had among the most liberal immigration regimes in Europe, it has gradually tightened its policy and introduced stricter requirements for those seeking Danish citizenship. Another factor in recent populist waves is the deterioration of living conditions outside the big cities, where jobs and opportunities have been disappearing throughout the globalisation era. To address this problem, successive Danish governments have shifted public funds away from the cities – especially the capital, Copenhagen – to shore up social mobility in small-town Denmark. Meanwhile, the run-up to the recent European Parliament election demonstrated that the far right has fallen out of sync with an overwhelming majority of Danish voters on two key issues: climate change and security policy. In addition to challenging the European Union’s authority to act against climate change, far-right politicians have even announced their intention to withdraw from key climate agreements at the national level. Yet poll after poll has shown that Danish voters demand aggressive policies to combat climate change. Likewise, on security policy, the far right questioned the EU’s legitimacy as a forum for collective action, and argued that Danish security policy should be decided solely under the auspices of Nato. Yet in light of Russia’s war on Ukraine, Danish voters strongly disagree. While the Danish far right has always been skeptical of the EU, the DPP did not follow other right-wing nationalist parties in moderating its position in the years following Brexit and the Covid-19 pandemic. Instead, it doubled down and called for Denmark to leave the EU altogether. While that move consolidated the party’s electoral base, it radically reduced its chances of regaining its earlier strength. Danish support for EU membership has grown, and, in 2022, a referendum even scrapped a longstanding opt-out on defence cooperation. These sentiments should not come as a surprise. Danish television viewers watched in horror as the British House of Commons descended into chaos in the wake of Brexit. Britain’s political turmoil and economic sclerosis have convinced many Danes not to pursue a similar path. Similarly, Russia’s war of aggression has underscored the importance of EU membership and joint policymaking. Denmark is a strong supporter of not only Ukraine but also the Baltic countries, any one of which could be next in line. But while the far right has been pushed to the margins of Danish politics – owing to its hardened hostility toward the EU and the centre’s neutralisation of immigration as an issue – the threat of populism is still alive. The far right has splintered, and – contrary to what one might assume – this development is not necessarily beneficial for the political center. The breakaways, under the banner of the Denmark Democrats party, made a strong showing in the 2022 general election, and have secured one seat in the European Parliament. While the new party is closer to the centre and more supportive of EU membership, it has managed to keep immigration on the agenda. Sensing the risks, the Social Democrats’ spokesman on immigration, Frederik Vad, recently warned foreigners in the country against engaging in subversive activities, implying that non-native residents are not generally well integrated into Danish society. By shifting the issue from levels of immigration to the supposed challenges of integration, Vad, who is backed by the prime minister and other established parties, echoed what the far right has been claiming for years.

Bodies by the dozen are piled up at an overfull forensic morgue in Ecuador’s drug violence-plagued city of Guayaquil; the stench of death hanging over an entire neighbourhood.On site, workers in biohazard suits and masks move one body bag after another from shipping containers to coffins, as relatives wait outside in the stifling heat, gagging at the smell.“I smoke to mask the odour,” a man who requested anonymity for his own safety told AFP, dragging deeply on a cigarette as he waited to receive a loved one’s remains.The port city of Guayaquil has been at the centre of an increasingly deadly battle between Ecuadoran drug gangs, and the bodies are piling up, many of them unidentified.For days now, residents say, the odour of decomposing bodies has hung over an entire neighbourhood surrounding the morgue, which receives the bodies of people violently killed in Guayaquil and neighbouring Duran for investigation purposes.The national forensics service said in a statement on Tuesday that “due to the increase in criminal violence in the country, there are more bodies marked ‘NN’”, meaning unidentified and unclaimed, at the morgue.It did not provide a figure, but press reports suggested there were over 200.The service also said two refrigerated containers at the facility had broken down, amid media reports of leaking body fluids and even body parts spotted on the premises.The forensic service said an investigation was underway.Once considered a bastion of peace in Latin America, Ecuador has been plunged into crisis by the rapid spread of transnational cartels that use its ports – mainly Guayaquil – to ship drugs to the United States and Europe.The homicide rate in Ecuador, a country of about 17mn people, soared from six per 100,000 inhabitants in 2018 to 47 per 100,000 last year.In the first four months of 2024 alone, about 1,900 homicides were recorded. For 2023, the number was 8,004.In January, Ecuadoran President Daniel Noboa declared a state of “internal armed conflict” allowing for military deployment in the streets and in prisons which are frequently the scene of brutal gang battles.Noboa’s declaration came amid a particularly brutal wave of violence in several parts of Ecuador, sparked by the prison escape of one of the country’s most powerful criminal bosses.This is not the first time the number of corpses has overwhelmed capacity at the Guayaquil forensic morgue, but it is the worst since the coronavirus (Covid-19) pandemic when the remains of more than 200 people lay unidentified or unclaimed for months.The spreading stench of death only worsens the fear that has gripped residents of Guayaquil where dead bodies regularly turn up hanging from bridges as gangsters settle scores.

Qatar National Bank (QNB) said that the European Central Bank (ECB) will begin implementing a gradual monetary easing cycle shortly based on the absence of significant inflation rate developments with an additional interest rate reduction by 25 basis points in 2024. In its weekly commentary, QNB said, "Early this month, the central bank finally decided to pivot its monetary stance, cutting policy rates by 25 basis points (bps). The decision was expected, coming two years after the start of a record tightening cycle of 10 consecutive rate hikes that took the benchmark Euro area deposit rate to 4 percent. "Importantly, the move was also historic, as this is the first time ever in which the European Central Bank (ECB) started an easing cycle ahead of the usually more "dovish" US Federal Reserve (Fed). Moreover, the decision took place amid concerns that above target (2 percent) inflation is re-accelerating, after months of significant moderation. In fact, headline inflation was running at 2.6 percent in May, while core inflation, which extracts the more volatile elements of energy and food prices from the reference basket, was at 2.9 percent for the same period." The bank pointed out, "In our view, despite still lingering inflation concerns, this decision marks the beginning of a gradual cycle of interest rate cuts. In this article, we discuss the three main factors that support our outlook. "First, inflation is consolidating its steady convergence towards the ECB's target, which supports additional interest rate cuts. Inflation is now slightly more than half a percentage point away from the monetary policy objective. An important measure for policy is core inflation. By excluding the more volatile components, core inflation provides a more stable and informative view of the underlying inflation trends. The peak in core inflation was reached at 7.6 percent in March last year, after which it started a steady downward trend, reaching 2.9 percent in the most recent release. The disinflation cycle is expected to continue, irrespectively of volatility and negative data surprises. "Moreover, measures of long-term expectations have stabilized at the target of 2 percent for two consecutive quarters. Controlled expectations are crucial to moderate further price pressures from firms, as well as higher wage demands from workers. Overall, with inflation close to reaching the ECB target, and contained inflation expectations, the case was built for the beginning of a policy rate reduction cycle. "Second, the record cycle of policy rate tightening, together with the normalisation of the central bank's balance sheet, have left financial conditions at exceptionally restricted levels. The Financial Conditions Index for the Euro area provides a useful summary of the costs of credit. This indicator combines information of short- and long-term interest rates, and credit spreads. The index spiked in mid- 2022 and is currently at levels that have only been reached at the worst of the Global Financial Crisis, when the European economy faced a credit crunch and asset prices collapsed, or during the European Sovereign Debt Crisis. "In addition to policy rate hikes, the ECB continued to revert the balance sheet expansion that was implemented during the Covid-pandemic to support economic activity. The ongoing "quantitative tightening" will continue to withdraw liquidity from the financial system created by extraordinary and temporary measures. Decreased liquidity and higher credit costs have an impact on the volumes of credit, which are contracting in real terms, and are likely to decline further in the coming months, an indication to the ECB that its tightening cycle has been effective. "Third, the Euro area has just experienced a mild recession in H2-2023, and its economic growth performance is expected to remain lackluster. The most recent prints of the Purchasing Managers Index (PMI) signal a stagnant economic outlook. The PMI is a survey-based indicator that provides a measurement of improvement or deterioration in economic activity. This year, the composite PMI, which tracks the joint evolution of the services and manufacturing sectors, has remained below or close to the 50-point threshold that separates contraction and expansion. In line with this indicator, the Bloomberg consensus points to a modest growth in real GDP of 0.6 percent this year. While we do believe that there is scope for positive surprises in Euro area activity this year, our less negative 0.9 percent growth projection is still much below the long-term growth of 1.5 percent. Hence, growth is expected to remain well below trend, and therefore require some support from policy easing." QNB concluded, "All in all, the cut of policy rates by the ECB was supported by the still ongoing disinflation cycle, and overly-restrictive financial conditions in an environment of below trend growth. We expect the easing cycle to be gradual, absent significant unexpected developments in inflation, with two additional 25 bps cuts this year, as the ECB continues to monitor the evolution of prices and economic activity."

Switzerland captain Granit Xhaka is ready to write a “new chapter” at Euro 2024 after his dream season with Bayer Leverkusen. Xhaka, whose country face Hungary in their Euro opener today, helped Leverkusen spring a surprise as they went undefeated to win the Bundesliga title for the first time this term.Xabi Alonso’s team also won the German Cup and reached the Europa League final before losing to Atalanta in a defeat that has provided Xhaka with all the motivation he needs at the Euros. Asked if it was possible to surpass Leverkusen’s golden campaign with Switzerland at the Euros, Xhaka said: “Magnificent, what does it mean? It hasn’t been a perfect season because we lost the Europa League final.“It is a new chapter, a new challenge with the national team, and then with Leverkusen next season. I’m looking forward to the Euros starting for us tomorrow. We would like to win all the games of the group stage.”Xhaka, 31, was hailed by Hungary coach Marco Rossi as one of the best players in the world at his position on Thursday. But, while plaudits are nice, the former Arsenal star is more focused on ensuring Switzerland emulate their run to the European Championship quarter-finals in 2021.“Congratulations from the opposing coach are a pleasure. If I am among the best at my position, that is for others to say,” Xhaka said. “Success brings self-esteem. It has been an important challenge this season.”Switzerland stunned France with a penalty shoot-out victory in the last 16 at the Covid-delayed Euro 2020, before losing to Spain on penalties in the quarter-finals. After reports of a recent rift between Switzerland boss Murat Yakin and his players over tactics, Xhaka insisted the air had been cleared in time for the Euros.“We are glad to have a coach who is listening to us. We have never had problems,” he said. “We are adults. I had a great relationship with the coach in the last six to eight months. He came to visit me, we met for dinner. We are ambitious for the team and ourselves. That is all that matters. I packed my luggage to spend a lot of time here.”Rossi wants Hungary to embrace expectationsMeanwhile, Hungary coach Marco Rossi has urged his side to embrace the pressure of being ranked as an emerging force at Euro 2024. Rossi’s team face Switzerland in their opening Group A fixture in Cologne today.The Hungarians have arrived on the Euro stage thanks to Rossi’s astute guidance and the dynamic presence of Liverpool star Dominik Szoboszlai in midfield. While it will likely be too soon for Hungary to challenge for the trophy, they have genuine hopes of qualifying for the knockout stage from a group that also includes hosts Germany and Scotland.But Rossi knows even that might not be enough to satisfy the demands of Hungary’s fanatical support and he challenged his players to treat the expectations as a source of motivation. “I think my players feel the expectations, the hype and the pressure. It is a tournament which will be watched all over the world,” Rossi said.“We would like to be the protagonists, to give joy and happiness to our supporters. These are not matches between friends. We have this pressure and it is unavoidable. But it is important to keep the focus on what we need to do, not on ifs and buts.”Hungary’s golden era came when Ferenc Puskas’ ‘Mighty Magyars’ finished as runners-up at the 1954 World Cup. Rossi’s crop may not be at that level, but they are competing at their third successive European Championship after an unbeaten qualifying campaign. A friendly loss to the Republic of Ireland last week was Hungary’s first defeat since 2022, a superb run that has convinced pundits to tip them as the dark horse of the tournament. Now Rossi wants the current generation to write their own history.Rossi believes stopping Switzerland’s Bayer Leverkusen midfielder Granit Xhaka will be key to their hopes of starting with a win. “The recent career of Xhaka speaks for itself, he won the German league and went to the Europa League final,” he said. “He is a key player for Switzerland. He is the source of play and somehow we need to limit him.”

Former world number one Naomi Osaka has been given the green light to compete for Japan at next month’s Paris Olympics, the country’s tennis association said on Thursday.Former US Open finalist Kei Nishikori has also been cleared to play, the Japan Tennis Association said.Four-time Grand Slam winner Osaka lit the cauldron at the opening ceremony of the Covid-delayed Tokyo Games in 2021, where she went on to make the third round.She has since become a mother and returned to tennis late last year after a 15-month maternity break.The 26-year-old is currently ranked 125th in the world. The singles event at the Olympics is limited to 64 players with a maximum of four from each nation.The International Tennis Federation cleared her to compete in Paris by awarding her a special ranking for players who have been away from the tour, the JTA said.She also qualifies as a former Grand Slam winner, the JTA said.Nishikori, who has seen his world ranking slip to 286 after a series of injuries, was also given a special ranking that allows him to compete at the Olympics.Osaka said after playing for Japan in the Billie Jean King Cup in Tokyo in April that she “would love to play” in Paris.“Growing up watching the Olympics on TV, I felt that it was a celebration of sport,” she said.“I thought it brought everyone together and just to be able to be an athlete there and interact with other athletes is one of the funniest things that I’ve ever done.”“And if I do play, I have high ambitions of myself and I hope that I can do really well and get a medal,” she added.Wimbledon serves up record prize money of 50mnWimbledon will have a record £50mn ($63.94mn) prize money pot this year with singles champions taking home 2.7mn each, the All England Lawn Tennis Club (AELTC) said on Thursday.The total prize money is 11.9%, or £5.3mn, more than offered at last year’s tournament. First round singles losers will each get £60,000.The grasscourt Grand Slam runs from July 1-14. Carlos Alcaraz and Marketa Vondrousova are the men’s and women’s champions respectively.

Qatar Fund for Development (QFFD) continues its efforts to establish global humanitarian principles by implementing a comprehensive health care initiative, which aims to meet the urgent needs of Rohingya refugees in Malaysia, as it has funded the establishment of 5 fully equipped health clinics, in addition to 5 mobile clinics in strategic locations in the most important areas, to ensure the availability and ease of access to health care services for Rohingya refugees, in cooperation with Qatar Charity and the Malaysian National Welfare Foundation.This project was launched in December 2019, and it has become an essential pillar in providing basic health care services to Rohingya refugees in Malaysia.Despite the challenges resulting from the global Coronavirus (Covid-19) pandemic, the QFFD remained steadfast in its commitment to supporting Rohingya refugees in Malaysia, in cooperation with Qatar Charity and several other partners.This initiative, which was planned over a period of 4 years and launched in September 2019, faced exceptional challenges, as the pandemic led to the collapse of health sectors in various countries around the globe, but the project was extended for an additional year to ensure its successful completion until the end of 2024.The extension resulted in the adaptation of strategies to comply with evolving health protocols, ensuring the safety of both healthcare providers and beneficiaries, while maintaining the provision of essential services to the Rohingya community.Thanks to the steadfast determination and cooperation, the project withstood crises and continued to provide vital health care support to those in dire need of it, affirming the State of Qatar's commitment to supporting humanitarian endeavors around the globe.The health clinics supported by the fund provide effective and high-quality health services, such as: medical examination, prenatal services, wound dressing, minor surgical operations, health education, health examination, vaccination and blood testing, as well as specialized services, such as orthopedics, circumcision, pediatrics, and mental health.The initiative achieved intangible accomplishments, as it has served a large number of Rohingya refugees (around 585,756 refugees) successfully, until April 2024. This success is a testimony to the combined efforts of QFFD, Qatar Charity, and the Malaysian National Welfare Foundation, as well as an evidence of the dedication and experience of partner organizations in providing basic health care to Rohingya refugees in Malaysia.The impact of health care projects was demonstrated during a comprehensive tour recently undertaken by the fund's delegation, during which it inspected all health clinics in Kuala Lumpur, the Malaysian state of Johor, and the island of Penang, and was informed of the progress and quality of the basic health services provided.This visit is not the first of its kind, but rather a part of a series of regular visits aimed at monitoring the project's progress in a sustainable and effective manner, with a special focus on reaching the target groups and the most vulnerable individuals, and ensuring that transparency and quality standards are met.

Ryanair boss Michael O’Leary has called the Single European Sky a “waste of time”. “The Single European Sky has gone over for 20 years” since its introduction in 2004, and “it will go over the next 20 years. I don’t have any time for the Single European Sky,” said Ryanair’s Group CEO, adding that he “couldn’t care less" about the legislation. But several airline leaders do care, and it was once again discussed at this year’s IATA AGM held in Dubai.In Europe, key EU member states earlier blocked the reform of European airspace despite demands to cut flight delays and significantly reduce flight emissions by reducing congestion in the air.The European Council and European Parliament reached provisional agreement on new airspace management arrangements which have been dismissed by the airlines as inadequate, not ambitious enough.Most airline leaders want progress ‘with substance’ by creating a ‘Single European Sky’ to replace the current patchwork of airspace management bodies criss-crossed by air corridors.The hope was, and still is, that the single European sky initiative will one-day increase the efficiency of air traffic management and air navigation services by reducing the immense fragmentation of European airspace. By its nature, this ongoing initiative is pan-European and open to neighbouring countries. But the question is...when?Under the Single European Skies initiative, European airspace management would move away from the current, datedarrangement: A fragmented airspace map determined by national borders, to the use of 'functional airspace blocks' the boundaries of which will be designed to maximise the efficiency of the airspace for air travel across Europe as a whole.The aim is clear: To use air traffic management that is more closely based on desired flight patterns leading to greater safety (by preventing congestion in the skies), efficiency (both environmentally and economically) and greater capacity.The Single European Skies initiative will reduce airlines' annual fuel costs by €5.5bn, meaning Europe could better handle large scale disruptions (such as the 2010 Icelandic volcano eruption), overcrowding in the skies (as was happening in summer 2019), as well as unprecedented collapses in air travel demand (such as the immediate impact of the Covid-19 pandemic).But the European Commission has been trying to deliver a single European sky since the early 2000s. Country inaction has meant that none of its targets have been met. New legislation, as proposed by the Commission, is the only way to force the reform and improvements that are desperately needed. IATA points to the intransigence and selfishness of key EU states and their air navigation service providers, adding that their delays threaten to collapse the latest Commission effort. Some EU member states have expressed certain objections to relinquishing their current systems, primarily relating to national security and sovereignty concerns.“The European Commission has been trying to deliver the benefits of SES since the early 2000s,” said Willie Walsh, IATA’s Director General. “But state inaction has meant that none of its targets have been met. New legislation, as proposed by the Commission, is the only way to force the reform and improvements that are desperately needed. But the intransigence and selfishness of key EU states and their air navigation service providers (ANSPs) threatens to collapse the latest Commission effort.”With Europe’s air traffic management system being so dated and fragmented, a single European sky initiative is vital for a safe, sustainable, and efficient European air transport industry. It would lead to a 10% cut in EU aviation emissions, supporting the European Green Deal. Capacity can be increased, and delays will occur less (especially in summer) giving a €245bn boost to Europe’s GDP and a million extra jobs annually from 2035.Airbus say that pressure is also rising with new types of aircraft entering the airspace, but old, fragmented airspace plans are not enabling these jets to operate flights as efficiently as could be possible.The aviation industry is firmly behind efforts to achieve a fully integrated airspace, not only for the benefit of airlines, but also for the sake of passengers and the environment. It’s the politics of implementation that’s not aligned. Currently, travellers are enduring unnecessary delays and aircraft are producing more CO2 emissions than they would under a modern, streamlined system.A study revealed airspace modernisation could deliver European consumers an additional $36bn (€32bn) of welfare benefits in the year 2035, compared to a ‘do nothing’ scenario (in which no further airspace modernisation takes place).Commercial aviation continues to be responsible for about 2-3% of global carbon emissions. To date, the industry has made most progress on efficiency gains on new aircraft.Today around 85% are more efficient than those entering service in the 1960s. Alternative fuels, particularly sustainable aviation fuels (SAF), have been proven to help achieve the industry climate targets. SAF derived sources such as algae, jatropha, or waste by-products have been shown to reduce the carbon footprint of aviation fuel by up to 80% over their full lifecycle. Nearly a quarter of the operating costs of airlines spent on fuel: 23.7% in 2019, which is up from 13% in 2001. The proportion is likely to rise further as fuel prices go up. This alone is a major incentive for the whole industry to focus on fuel efficiency.Countries have committed to achieving net zero emissions by 2050, through an international approach, working with governments around the world and through the UN’s aviation agency, ICAO.The author is an aviation analyst. Twitter handle: @AlexInAir

The Mexican governing party’s unexpectedly lopsided victory this week has investors concerned that it may use its mandate to sweep aside some of the checks on presidential power which have long been a source of comfort to the business community.The possibility that current president Andres Manuel Lopez Obrador could push through some of those changes during his final month in office in September has some investors especially on edge.That period will overlap with a new legislature in which his MORENA ruling party is likely to be enjoying a super-majority that would give it the power to rewrite the country’s constitution. Some analysts hold out hope that Lopez Obrador’s anointed successor, President-elect Claudia Sheinbaum, who will be sworn in on Oct 1, may take a more gradualist approach, but even that is not a given. She has mostly professed her loyalty to her charismatic mentor’s policies. Lopez Obrador proposed a bevvy of constitutional changes in February that would drastically remake Mexico’s judiciary, eliminate or neuter some key regulatory agencies and introduce some expensive new social benefits, including an expanded state pension plan.Although none of the measures are welcome by investors, what makes some observers particularly nervous are the proposed changes to Mexico’s court system - which would include the popular election of Supreme Court judges - plus the evisceration of key oversight bodies.“What an investor wants least, and even less an investor who is going to install a factory worth billions in Mexico, is for the rules of the game to suddenly change,” said Esteban Polidura, Julius Baer’s director of investment strategy for the Americas.“That’s why they place a big importance on the continued existence of a State of Law, that the existing rules are respected and that the independence of institutions which are there to make decisions not linked to a particular government are respected.”Mexico’s peso weakened further on Friday as Lopez Obradorreiterated the call for his controversial judicial overhaul. The peso was on track to fall more than 7% this week versus the dollar, its largest weekly decline since the start of the Covid pandemic lockdowns in March 2020. Lopez Obrador proposes to cut the number of Supreme Court judges to nine from 11 and all judges would need to be reconfirmed in an extraordinary election next year. The plan has been criticized as a hit on an independent court system, which has served as a check over some of Lopez Obrador’s most extreme policies.“One of the great checks that the government has had has been the independent institutions and in particular the judiciary,” Ramse Gutierrez, co-director of investments at Franklin Templeton in Mexico City, said. Sheinbaum told local media on Thursday night that any reform has to be properly evaluated and explained to the Mexican people. If the fate of checks and balances looms as the key issue for many investors, others are also anxious about plans to boost retirement and other social benefits at a time of already heightened concerns about election-year spending by the once frugally minded Lopez Obrador.Mexico’s overall fiscal deficit is set to end 2024 at 5.9% of economic output, according to the government estimate, which would be the country’s highest since the 1980s. While it may be compelling for Lopez Obrador to spend more on universal pensions, healthcare and education, the costs and fiscal constraints could make it complicated, said Aaron Gifford, senior emerging markets sovereign analyst at T. Rowe Price.“Still, with the budget deficit where it is, markets are worried about fiscal slippage even despite Sheinbaum’s pledge to be fiscally responsible.”Some still expect Sheinbaum, like Lopez Obrador through most of his six years in power, to end up being a moderate spender. The 2024 budget “was pretty political in the sense that it was aimed at providing fiscal leeway for (Lopez Obrador) to complete a number of pet projects,” said Damian Buchet, London-based chief investment officer at Finisterre Capital. “But after that, Sheinbaum has already signaled that without being called fiscal tightening, she would actually return to fiscal orthodoxy.” Another question is whether Sheinbaum will emulate Lopez Obrador’s tendency to meddle in various aspects of the economy from mining to energy and water, to a partially-built airport near Mexico City which he scuttled early in his term - and whether the guard-rails which sometimes boxed him in will survive the September legislative session.“The main issue is the rules of the game, the State of Law, that the established rules are followed,” Franklin Templeton’s Gutierrez said, noting that markets were particularly nervous about the idea of choosing judges and justices through popular vote.

Globally, democracies appear fragile and on the defensive. Comparisons with the 1970s and the interwar period abound. In the United States, Donald Trump’s strong showing in recent polls has triggered another wave of fear about authoritarian nationalism. To many of those who closely followed the 2016 and 2020 US presidential elections, his lead in the key swing states is downright alarming.The worst strategy for democrats around the world, and for the Democrats in the US, would be to imitate their opponents. That is a game they cannot win. Yet that is precisely what many are doing. Consider US President Joe Biden’s new package of China tariffs, which is a more radical reversal of traditional US trade policy than anything Trump himself embraced during his presidency.While headlines have emphasised the 100% tariff on Chinese electric vehicles (EVs), the real story concerns batteries, steel, aluminium, and semiconductors. Though the public doesn’t buy these goods directly, they are inputs in many US-made products and appliances. Presumably, the Biden administration is hoping that Americans will feel hardly any economic effect, and will only see it getting tough with China.We know what the tariffs won’t do. They won’t create (or “bring back”) many jobs in the US, because if America were to manufacture EVs or solar panels on a large scale, it would rely almost entirely on automated factories. Nor will the tariffs improve relations with US allies, such as by encouraging “friend-shoring.” Instead, European producers are likely to lose markets for engineering products sold to China, as Chinese domestic industrial production ramps up.The tariffs also won’t accelerate decarbonisation. On the contrary, by making essential green technologies more expensive (thus delaying their mass uptake), Biden will make the world warmer. Moreover, as a recent European Bank for Reconstruction and Development report shows, it remains the case that the minerals and rare earths (gallium, germanium) needed for the expensive parts of battery technology are mostly sourced from China.Lastly, the tariffs will not improve China’s human-rights record. They will merely encourage those who already believe that American rhetoric on human rights is pure hypocrisy and can safely be ignored.But the tariffs will have an impact: they will help Biden lose the election. No matter how high the current administration sets them, Trump will always be able to claim that he would set them even higher. Biden will continue to look like he is merely responding to Trump’s challenge – and in a half-hearted, geriatric way.Moreover, the tariffs have validated the argument by Chinese President Xi Jinping and Russian President Vladimir Putin that the old international order is broken because America plays fast and loose with the rules. And most importantly (in the context of an election), the tariffs will aggravate the problem of increased costs for ordinary Americans. The Trump campaign has already made inflation one of its major issues. At his rallies, Trump claims (mendaciously, to be sure) that he can no longer have bacon on his sandwiches, because it costs too much.The inflation debate is widely misunderstood. Like all Western governments, the Biden administration can point out that inflation has fallen rapidly and is within range of the old 2% target. But that doesn’t matter to ordinary people. They see that costs have risen dramatically since the Covid-19 pandemic, ending a long period of price stability.While cumulative inflation might be around 20% since 2020, the perception is even worse, because consumers and the media tend to focus on just a few extra-inflationary items, like Trump’s bacon. Housing and food have become much more expensive. A gallon of milk that cost $3.25 at the beginning of 2020 cost more than $4 by 2022; a dozen eggs went from $1.45 at the beginning of the pandemic to $4.82 in January 2023, before falling to $2.86. At the same time, voters don’t think about clothing and other items whose prices have remained relatively stable – or even declined, as in the case of EVs. But they probably will notice an increase in prices for a wide range of consumer products as a result of the new tariffs.Here, the 1970s offer some lessons. Back then, the US tried to exclude Japanese cars and other manufactured goods that were cheaper and more efficient. The result was only momentarily beneficial for US producers. In the medium term, they lost markets and credibility; and in the long run, they had to adapt belatedly to new techniques. Protectionism cost US carmakers valuable time in making changes, and ultimately destroyed rather than created jobs. It also alienated consumers who were worried about inflation, ultimately contributing to President Jimmy Carter’s defeat in the 1980 election.In 2023, the Biden administration took great pains to explain that it wasn’t decoupling from China, only “de-risking.” But now, in a fit of panic, it has adopted an aggressive policy of conscious decoupling.A government will not suddenly inspire voters because it decided to “decouple,” nor will it make any meaningful progress combating climate change by shifting the costs to others. In 1944, US secretary of the treasury Henry Morgenthau observed that “prosperity, like peace, is indivisible. We cannot afford to have it scattered here or there among the fortunate or to enjoy it at the expense of others.”That message was correct then, and it is correct now. Political leaders inspire confidence when they can show that their policies are benefiting ordinary people, lowering prices, and making better products available. That is what effective government would look like, and many democracies currently are not delivering the goods. — Project SyndicateHarold James, Professor of History and International Affairs at Princeton University, is the author, most recently, of Seven Crashes: The Economic Crises That Shaped Globalization.

Irish and Czech voters picked up the baton in the EU’s marathon elections on Friday, some driven by concerns about migration and others bent on countering the anti-immigrant far-right.Both countries were voting in advance of tomorrow’s main election day when most of the European Union’s 27 nations – including powerhouses Germany and France – will vote to elect the bloc’s next parliament.Surveys point to election gains for anti-immigrant populists across the EU, and day one on Thursday saw a strong showing, though no knockout blow, for the Dutch far-right.Ireland’s 37-year-old Prime Minister Simon Harris voted near his home in Delgany, a village south of Dublin, before hitting the road to canvass for both local and EU elections.Keith O’Reilly, a 41 year-old IT worker, said that he admired Harris’s “energy” but that his vote would not be going to the premier’s centre-right Fine Gael.“They’re getting so many things wrong, the migration issue for one thing,” he told AFP.With around 20% of Ireland’s population born outside the country and record levels of asylum-seekers, many candidates are running on an anti-immigration platform – one of the reasons that drove Trevor Gardiner to vote.“The rise of the far-right jumping on immigration is really, really scary for us,” said the 42-year-old finance worker, “because it’s happening not just in mainland Europe but here in Ireland too”.Emily, a 21-year-old first-time voter who declined to give her full name, likewise said she “worried” about the far-right’s rise.“I think the others need to get their act together,” she said. “It’s incredible the type of anti-immigrant rhetoric that has become normalised here.”The EU vote comes at a time of geopolitical upheaval almost two-and-a-half years into Russia’s war on Ukraine.The far-right is looking to tap into grievances among the bloc’s 370mn eligible voters, fatigued by a succession of crises from the coronavirus (Covid-19) pandemic to the fallout of Moscow’s invasion.The contest in the Netherlands was seen as a bellwether for its strength – and exit polls showed gains for the Freedom Party (PVV) of firebrand Geert Wilders, in second place.However, the Dutch result was tighter than expected, with a Green-left alliance set for first place, and could spell hope for centrists battling to maintain their majority.That was the early assessment of Eurasia Group’s managing director Mujtaba Rahman, who predicted “the centre will largely hold” even if the far-right takes a quarter of the EU’s 720 parliament seats.“There’ll be lots of noise over next few days about the far-right surge in EU. The reality is more boring,” Rahman wrote on X.The other country voting on Friday was the Czech Republic, where politicians face widespread apathy to the EU vote: the country had the second-lowest turnout last time around in 2019, at 28.72%.Polls put the centrist ANO movement of billionaire former prime minister Andrej Babis in the lead.At an elementary school in southern Prague, voters cast their ballots while children played nearby, many relishing the opportunity to stop and chat with neighbours.Marek Cerveny, a 45-year-old teacher and tour guide who voted accompanied by his daughter, said he “definitely” saw EU decisions “reflected in our lives”: “What we can buy, how easily we can travel, how well we can live here.”Others like Vera Zazvorkova, a 72-year-old economist, said she was voting for change, wanting fewer EU rules on the environment and tougher curbs on migration.“The ‘Green Deal’ should change, that is, it should be restricted a lot, and the immigration policy should change too,” she said.The prospect of a rightward lurch has rattled the parliament’s main groupings, the conservative European People’s Party (EPP) and the leftist Socialists and Democrats.They still look set to be the two biggest blocs but current European Commission chief Ursula von der Leyen, of the EPP, may need support from part of the far-right to secure a second term.With an eye on the horse-trading that may be needed, von der Leyen has been courting Italian Prime Minister Giorgia Meloni, who heads the post-fascist Brothers of Italy party.Over the weekend, scrutiny will shift to the EU’s bigger economies as they open polling stations.Marine Le Pen’s National Rally is predicted to come out on top in France, as is Meloni’s party in Italy – which votes today – and Hungarian Prime Minister Viktor Orban’s far-right Fidesz.In Germany, the extreme-right AfD is polling second, behind the opposition conservatives. – AFP