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Reuters
4 days ago
- Business
- Reuters
G20's financial watchdog lays out climate plan but presses pause amid divisions
LONDON, July 14 (Reuters) - The G20's financial stability watchdog delivered a new plan on how to tackle climate risks on Monday, but paused further policy work amid a retreat by the United States that has tested efforts to advance a united financial policy on climate-related risks. The U.S. has withdrawn from multiple groups dedicated to exploring how flooding and wildfires and big climate-related policy shifts could impact financial stability. In its medium-term plan, the G20's Financial Stability Board pledged to step up coordination and data sharing on climate-related financial risk. However, it said while progress had been made to integrate climate risks into financial systems, some of its members, who include central bank governors and ministers, were keen to pause further climate work. "While many members feel there is a need for more work, some members feel that the work completed to date is sufficient," the FSB said in an update to its 2021 climate roadmap delivered to G20 finance ministers meeting in South Africa. "Going forward, the FSB will ... make determinations about what projects, if any, it will undertake." U.S. Treasury Secretary Scott Bessent would not attend the G20 meeting, Reuters reported last week. The United States is due to head the G20 group, which it helped found in the aftermath of the global financial crisis, next year. The FSB said it would continue to consider climate-related topics each year and would focus on its role as a coordinator of international work on climate risks. The watchdog said it did not have plans to do any more significant policy work on integrating climate-related financial risks into its supervisory and regulatory work. Work on this topic is ongoing at many of its member institutions, it said. The Brussels-based think tank Finance Watch said a lack of reference to concrete regulatory measures needed to address climate risks was a sharp retreat from the G20's original ambition and a moment of multilateral backsliding. "It confirms what we've been hearing since the G20 Plenary in Madrid (in June): the FSB is backing down under pressure, especially from the U.S.," it said in a statement. "If the G20 endorses this shift, we risk locking in a fragmented response. That weakens incentives for lagging jurisdictions (and) reduces multilateral pressure to act," its head of research and advocacy, Julia Symon, added. Earlier this year, the FSB published work on the usefulness of transition plans for financial stability and in 2024 presented a stocktake of supervisory and regulatory work on nature-related financial risks. "Rather than identifying such vulnerabilities a priority for further work, the FSB will leave that decision up to its annual work programme process," the FSB said in the report. The report detailed progress made since 2023 by international standard setters and global banking regulators. It also set out efforts to provide forward-looking data to help banks and companies quantify economic losses from climate shocks such as heatwaves.
Express Tribune
5 days ago
- Politics
- Express Tribune
Widening diplomatic space for Taliban 2.0
Listen to article On July 3, Russia became the first country to formally recognise the Taliban regime as a legitimate government. China welcomed the Russian move but adopted a cautious approach of not going beyond maintaining contacts with Kabul. Other countries like Iran, Pakistan, Uzbekistan and India also possess ties with the Taliban regime short of granting diplomatic legitimacy. So far 17 countries have established embassies in Kabul but except Russia, none has formally granted diplomatic recognition to Taliban 2.0. For the Afghan Taliban, the Russian diplomatic recognition is a big victory because so far Kabul has no representation in the UN. Recently the UN General Assembly also passed a resolution against the Taliban regime which was supported by Pakistan but not endorsed by India. From a pariah state and a source of international condemnation because of its repressive policies against women and girls, Taliban 2.0 failed to comply with the Doha Accord of 2020 which called for forming an inclusive government in Kabul. Since seizing power in August 2021, the Taliban regime is able to widen diplomatic space and seeking full control of Afghanistan. The first Taliban regime which ruled from 1996 and 2001 controlled 90% of Afghan territory and its writ was effectively challenged by the Northern Alliance. Russia is a permanent member of the UN Security Council and its granting of diplomatic recognition to Kabul means that Afghan Taliban will now try to extend their legitimate status. Russia as a successor state of the Soviet Union is however carrying the baggage of 10 years of its military intervention from 1979 and 1989 which devastated Afghanistan. According to the July 4, 2025 report of Brussels-based International Crisis Group (ICG), "The normalisation of diplomatic ties with the Taliban since their 2021 takeover has come gradually. China became the first country to accredit a Taliban diplomat as an ambassador in December 2023. Beijing was nonetheless quick to claim that this did not amount to diplomatic recognition. Since then, several other countries, including the United Arab Emirates, Uzbekistan, Türkiye and Pakistan, have upgraded diplomatic relations to ambassadorial level. So far no Western country has granted legitimacy to Taliban regime despite the fact that the Trump administration is in contact with Kabul on security issues." Facing threats from IS (K), Russia considers Taliban regime as a lesser evil and its natural ally. The ICG report further states, "Although it has been critical of the presence of transnational jihadist groups in Afghanistan, Moscow has found a willing partner in the Taliban in addressing the threat posed by Islamic State's Khorasan Province (IS-KP), which was involved in the March 2024 Crocus City Hall attack that killed 145 people. Moscow went on to remove the Taliban from its list of designated terrorist organisations in April 2025. Russian special envoy Zamir Kabulov stated that Afghan authorities will participate as a full member in the upcoming Moscow Format meeting — a regional forum for addressing concerns around the country." How is the Taliban regime, despite condemnation from human rights organisations, able to widen its diplomatic space? When Taliban rule is highly authoritarian in nature and prevents any dissent, how has it maintained peace in Afghanistan and given the impression to the outside world that it is focusing on development? Certainly, it is the ambition of Kabul to get maximum legitimacy without reforming its mode of governance, but in view of its rigid approach vis-à-vis women and opposition, it may not be able to achieve its objective so easily. The widening diplomatic space for the Taliban regime needs to be examined from three ways. First, the Afghan Taliban seem to be confident that after Russia's diplomatic recognition, other countries will follow suit. According to a BBC report of July 4, "Foreign Minister Amir Khan Muttaqi said he hoped it would serve as an example to other countries, which have been reluctant to recognise a regime which implements a version of Sharia law along with severe restrictions on women and girls. Others have decried the move, with former Afghan politician Fawzia Koofi saying 'any move by any country to normalise relations with the Taliban will not bring peace it will legitimise impunity'." For those countries which have established diplomatic contacts with the Taliban regime despite legitimacy issue, it doesn't matter who rules Afghanistan. What matters is that Taliban government, despite its repressive policies, is a reality and controls the country. Economic, security and strategic interests in Afghanistan are more important than human rights violations by the Taliban regime and denial of a democratic mode of governance by Kabul. Critics argue that compromising on Taliban's exclusive form of government is a violation of Doha Accord which will further encourage the Islamic Emirate to deny women and opposition parties their legitimate rights. Second, Russia's diplomatic recognition of the Taliban regime will certainly push other countries to follow suit. In that case, voices of dissent against Taliban's denial of fundamental rights to girls and women will be further suppressed. It will create a bad precedent and deprive the people of Afghanistan of their democratic rights. When political opportunism on the part of some countries leads to diplomatic recognition to the once outlawed Taliban regime, it means political repressive regimes of North Korea and Myanmar will also get diplomatic space. Finally, so far Taliban rulers have been able to convince the world that they different from those of their leaders who ruled Afghanistan from 1996 to 2001. Although, the Taliban regime is trying to argue that it is fighting the terrorist organisation IS-K, it doesn't mean that its links with TTP don't exist. Islamabad has repeatedly blamed the Afghan Taliban rulers for looking the other way as the TTP carries out terrorist activities inside Pakistan with Indian involvement. Henceforth, the Afghan Taliban's contradictory policy vis-à-vis Pakistan must not lead to Islamabad granting formal diplomatic recognition to Kabul. The only plausible solution to the Afghan predicament is to launch a political process leading to an inclusive mode of governance instead of granting diplomatic space to a regime which has violated Doha Accord and is in no mood to grant girls, women and opposition their legitimate rights.
Kuwait Times
5 days ago
- Business
- Kuwait Times
G20 watchdog lays out climate plan but pauses amid divisions
LONDON: The G20's financial stability watchdog delivered a new plan on how to tackle climate risks on Monday, but paused further policy work amid a retreat by the United States that has tested efforts to advance a united financial policy on climate-related risks. The US has withdrawn from multiple groups dedicated to exploring how flooding and wildfires and big climate-related policy shifts could impact financial stability. In its medium-term plan, the G20's Financial Stability Board pledged to step up coordination and data sharing on climate-related financial risk. However, it said while progress had been made to integrate climate risks into financial systems, some of its members, who include central bank governors and ministers, were keen to pause further climate work. 'While many members feel there is a need for more work, some members feel that the work completed to date is sufficient,' the FSB said in an update to its 2021 climate roadmap delivered to G20 finance ministers meeting in South Africa. 'Going forward, the FSB will ... make determinations about what projects, if any, it will undertake.' US Treasury Secretary Scott Bessent would not attend the G20 meeting, Reuters reported last week. The United States is due to head the G20 group, which it helped found in the aftermath of the global financial crisis, next year. The FSB said it would continue to consider climate-related topics each year and would focus on its role as a coordinator of international work on climate risks. The watchdog said it did not have plans to do any more significant policy work on integrating climate-related financial risks into its supervisory and regulatory work. Work on this topic is ongoing at many of its member institutions, it said. The Brussels-based think tank Finance Watch said a lack of reference to concrete regulatory measures needed to address climate risks was a sharp retreat from the G20's original ambition and a moment of multilateral backsliding. 'It confirms what we've been hearing since the G20 Plenary in Madrid (in June): the FSB is backing down under pressure, especially from the US,' it said in a statement. 'If the G20 endorses this shift, we risk locking in a fragmented response. That weakens incentives for lagging jurisdictions (and) reduces multilateral pressure to act,' its head of research and advocacy, Julia Symon, added. Earlier this year, the FSB published work on the usefulness of transition plans for financial stability and in 2024 presented a stocktake of supervisory and regulatory work on nature-related financial risks. 'Rather than identifying such vulnerabilities a priority for further work, the FSB will leave that decision up to its annual work program process,' the FSB said in the report. The report detailed progress made since 2023 by international standard setters and global banking regulators. It also set out efforts to provide forward-looking data to help banks and companies quantify economic losses from climate shocks such as heatwaves. – Reuters
Yahoo
5 days ago
- Business
- Yahoo
Which European economy stands to suffer the most from US tariffs?
Germany and Ireland are standing out as the two most exposed EU economies threatened by higher US tariffs, as Brussels works towards a trade deal with Washington, amid reports that pharmaceutical tariffs could be as high as 200%. When US President Donald Trump imposed a new 25% tariff on auto imports and car parts in April, Germany was identified as the EU country with the most to lose. Brussels-based think tank Bruegel's estimation at the time was that tariffs could cost 0.4% of the country's GDP in the long term. While awaiting a new EU-US trade deal, other details emerge that could put Ireland, Denmark, and Belgium, as well as other countries, in the crosshairs should Washington target the pharmaceutical sector next. The overall impact on the European economy will depend on the actual tariff rate the US settles on and the EU's response, but the blow will not be spread evenly. According to Bruegel, the EU economy is facing significant but manageable macroeconomic consequences. They estimated in a report in April that, regarding the possible scenarios, the damage could be approximately 0.3% of the EU's GDP, depending on the outcome of the negotiations. This compares to the 1.1% real GDP growth expected in the bloc in 2025, by the European Commission's Spring Forecast. Trade with the US is significant. In 2024, the United States was the largest partner for EU exports of goods, making up 20.6% of all EU goods exports outside the bloc. Pharmaceuticals account for 15% of the EU's goods exports to the US. They are followed by the auto sector. Until there is more clarification on potential US tariffs on the pharma sector's products, 'the auto sector seems to be the most vulnerable to US tariffs as there doesn't seem to be any major exemptions planned,' said Savary. The industry has been slapped with a 25% tariff in April. 'Tariffs alone could shave around 8% off total EU trade volumes over the next five years,' said Rory Fennessy, Senior Economist at Oxford Economics, in a recent report. Countries with the highest value in goods exports to the US, facing the biggest threat to their economies, include Germany, Ireland, Italy, France and the Netherlands. The German economy relies heavily on exports, boosted by the country's motor vehicle sector. Nearly one-quarter (22.7%) of the total German exports are heading to the US. 'Germany stands out as the major European economy likely to be hit hardest by US tariffs, and we expect GDP growth to slump in the second and third quarters," Andrew Hunter, Associate Director and Senior Economist at Moody's Ratings, said to Euronews Business. Hunter also added that smaller economies, including Austria and others in central and eastern Europe, 'which are heavily integrated into Germany's industrial supply chains, will also be hit hard'. According to Bruegel, after 2025, the long-term negative impact of the tariffs could be around 0.4% of the GDP in Germany, once 'the effect has fully built up and initial short-term effects dissipated,' said Niclas Frederic Poitiers, Research Fellow at Bruegel. 'For France, the average effect would be around 0.25% of GDP.' Related Lengthy trade wars could cut global investment by one-tenth, warn economists Trump the unifier? How Europe could benefit from Trump's policies Uncertainty could lead to lost investments and jobs across the entire 27-member bloc. Hunter said that, 'even for those countries where direct exposure to US exports is relatively limited, such as France or Spain, growth is still likely to be weighed down by global weakness and uncertainty. Regarding long-term impacts, Ireland stands out as one of the most affected countries, as more than half of its goods exports (53.7%) are directed towards the US market. A lot depends on whether the pharmaceutical sector will be hit with tariffs. If so, 'Ireland will be the EU economy most at risk from these tariffs,' said Mathieu Savary, chief strategist for our European Investment Strategy at BCA Research. The research-based pharmaceutical industry is a key asset of the European economy. It is one of Europe's top-performing high-technology sectors. It contributed €311 billion in gross value added (GVA) and 2.3 million jobs directly and indirectly to the European Union's economy in 2022, according to a recent study by PWC. And the US market is crucial to the European pharma sector. According to the European Federation of Pharmaceutical Industries and Associations, in 2021, North America accounted for 49.1% of world pharmaceutical sales compared with 23.4% for Europe. And more than one-third of EU pharma exports are going to the US. If the pharma sector is hit by a 25% tariff, as it is expected by Moody's in the coming months, 'most exposed would be a number of smaller European economies like Denmark, Belgium, Slovenia and Ireland, which are generally where we think the risks of recession in Europe are highest,' Hunter said. BCA Research's chief strategist added that in this case, 'Ireland is particularly exposed to this risk,' citing that exports to the US represent 18% of Ireland's GDP, and pharma exports represent nearly 55% of Irish exports. According to BCA, the impact 'could curtail 4% to 5% to growth over time'. Bruegel estimated that Ireland's cumulative real GDP loss could be 3% by 2028. The think tank also singled out the country as the most vulnerable regarding the impact of the US tariffs on employment. Regarding how vulnerable a country is to job losses in light of US tariffs, Bruegel said that Italy was the second most-exposed country, with a high exposure in transport equipment and a high level of exposed employment in fashion and car manufacturing. Italy would also have high exposure in pharmaceuticals. Trump said on Tuesday that pharmaceutical products imported to the US are facing a 200% tariff, without disclosing any further details. According to BCA's Savary, it is not likely, because 'that would massively increase the cost of healthcare for US consumers, which is already a major issue for voters.' He sees it as a 'strong message to foreign pharma companies to adjust their pricing down and invest into producing their drugs in the US.' Savary expects 'that FDIs into the US and drug prices reduction announcements will be the end result of these talks and threats'. 'The pressure is now on for drug companies to expand US production facilities so they are effectively on the doorstep of American customers,' said Dan Coatsworth, investment analyst at AJ Bell. Sign in to access your portfolio
Euractiv
5 days ago
- Business
- Euractiv
Winemakers slam EU's push to include drink in €72bn US trade counterpunch
Europe's wine sector has condemned the European Commission's plan to include the grape-based beverage on its €72 billion retaliation list against US exports, warning that 'there is no political, strategic or economic interest' in listing it as part of the escalating transatlantic trade dispute. Ignacio Sánchez Recarte, who runs CEEV, a Brussels-based lobby group, told Euractiv that US and EU wine groups have 'made it clear' that wine should be 'kept out of trade disputes', and urged the European Commission to clinch a trade deal with Washington before 1 August, when a 30% US blanket levy on EU exports is set to enter into force. Other American-made spirits, including bourbon, are also on the Commission's list, obtained by Euractiv. 'The inclusion of US wines in the list of products for retaliation will not be efficient in reaching the EU's [goals],' Sánchez said. 'There is no political, strategic or economic interest in including them!' The US is the largest export market for EU wines, accounting for 27% of export value and 21% of volume. But with Trump's 10% baseline tariff in place – and a hike to 30% looming on 1 August – EU winemakers, squeezed by slumping global demand, fear poking Washington could trigger an even harsher response. The €72 billion package, which was presented to EU trade ministers in Brussels on Monday, is considerably lower than the €95 billion list originally foreseen in May, after Brussels sharply reduced the expected impact on US industrial goods. The value of affected machinery imports has been lowered from €12 billion to €9.4 billion; chemicals and plastics from €12.9 billion to €7.7 billion; automotive products and parts from €12.3 billion to €8 billion; and electrical equipment from €7.2 billion to €6.1 billion. The €6.4 billion in affected agrifood products remains the same, while the value of affected aircraft imports increased slightly, from €10.5 billion to €10.8 billion. Sánchez's remarks were echoed by the Aerospace, Security and Defence Industries Association of Europe (ASD), another Brussels-based lobby group. 'Trade wars have no winners – they create uncertainty, disrupt global supply chains, and ultimately harm industries and consumers on both sides,' an ASD spokesperson said, adding that it is 'essential' for the US and the EU to reach a negotiation agreement. In addition to the €72 billion list, which must still be approved by member countries, the EU has already drawn up a retaliatory package targeting €21 billion worth of US goods, including motorbikes, diamonds, and soybeans. These measures were originally set to take effect on Tuesday but their imposition was delayed until the start of next month following Trump's threatened tariff hike on Saturday. The Commission, which oversees the bloc's trade policy, initially proposed tariffs on a wider range of goods valued at €26 billion. Bourbon and wine, however, were removed from the list after Trump threatened tariffs of 200% on all EU alcoholic products if levies were applied to US whiskey. It is currently unclear under what precise conditions either package will enter into force. EU diplomats, however, overwhelmingly expect the €21 billion list, at least, to be imposed next month if Trump follows through on his 30% tariff threat. The Commission declined to comment. (jp)
