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Germany, France Pledge New Efforts to Strengthen Eurozone

Germany and France pledged Monday to seek ways to strengthen the 19-nation eurozone, with harmonizing corporate taxes among the possible measures they will mull over in the coming weeks.

 

German Finance Minister Wolfgang Schaeuble and new French counterpart Bruno Le Maire said they are setting up a panel to produce proposals for a bilateral summit in July.

 

“We’ve been talking for years about progress in the integration of the eurozone, but things aren’t advancing quickly enough or far enough,” Le Maire said. “We are determined to get things moving faster and further, in a very concrete way.”

 

Germany and France could either propose a joint corporate tax system of their own or concentrate on pushing efforts for a harmonized assessment of corporate taxes at the European Union level, Schaeuble said.

 

“Both are ambitious,” he conceded, noting that wider tax harmonization is difficult because it would require consensus among EU leaders.

 

Le Maire said there needs to be better coordination of economic policy. He said investment will also be considered. He stressed France’s willingness to consider deeper reforms such as creating a finance minister for the 19-nation eurozone or a “European monetary fund,” an idea that Schaeuble has periodically backed.

 

He offered assurances that “France will respect its European obligations in terms of [budget] deficit reduction.”

 

The latest German-French drive to strengthen the EU’s economic coherence come as Britain, the bloc’s No. 2 economy after Germany, prepares to leave the EU.

 

“We see in Brexit an opportunity for our financial companies to be more attractive than they were before,” Le Maire said. “Our role is to create wealth for our country, to create jobs for our country. With Brexit, there is this opportunity, and we expect to seize this opportunity.”

 

New French Foreign Minister Jean-Yves Le Drian, also making his first trip to Berlin since President Emmanuel Macron’s new government was appointed last week, met separately with his German counterpart Sigmar Gabriel.

 

Le Drian promised to keep up Franco-German diplomatic efforts to resolve the conflict in eastern Ukraine that has cost almost 10,000 deaths since fighting broke out in 2014 between Russia-backed separatists and the government.

 

“France and Germany are not Europe, but without France and Germany, Europe won’t be able to move forward,” Gabriel said. “We want to use this historic window of opportunity that opened up with the election in France.”

 

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Boeing Co. Signs Defense, Commercial Deals with Saudi Arabia

Boeing Co said on Sunday it had signed several defense and commercial deals with Saudi Arabia including for the sale of military and passenger aircraft during a visit by U.S. President Donald Trump to the kingdom.

The announcement is the latest in tens of billions of dollars in deals signed between U.S. and Saudi firms since Trump arrived in Riyadh on Saturday.

Boeing said Saudi Arabia has agreed to buy Chinook helicopters, associated support services and guided weapons systems, and intends to purchase P-8 surveillance aircraft.

The total value of the deals or how many aircraft Saudi Arabia intends to buy was not given in the statement announcing the agreements.

A Boeing spokesman declined to comment beyond the statement.

The U.S State Department announced in December plans to sell Saudi Arabia CH-47F Chinook cargo helicopters and related equipment, training and support worth $3.51 billion.

Saudi Arabia is seeking closer defense and commercial ties with the United States under Trump, as it seeks to develop its economy beyond oil and leads a coalition that is fighting a war in Yemen.

“These announcements reaffirm our commitment to the economic growth, prosperity and national security of both Saudi Arabia and the United States, helping to create or sustain thousands of jobs in our two countries,” said Boeing Chief Executive Dennis Muilenburg.

Boeing also said it would negotiate the sale of up to 16 widebody airplanes to Saudi Gulf Airlines which is based in the country’s east in Dammam.

Boeing did not say which aircraft it was negotiating to sell to the privately-owned commercial airline. Saudi Gulf, which started operations last year, could not immediately be reached for comment.

Boeing will also establish a joint venture with Saudi Arabia to provide “sustainment services for a wide range of military platforms,” the statement said, whilst a separate joint venture would “provide support for both military and commercial helicopters.”

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EU’s Moscovici Confident Eurogroup Will Reach Deal on Greece

The European Commissioner for Economic and Financial Affairs, Pierre Moscovici, said on Sunday he was confident an agreement between Athens and its creditors could be found at a meeting of euro zone finance ministers on Monday in Brussels.

Athens needs funds to repay 7.5 billion euros ($8.4 billion) of debt maturing in July.

“We are very close to an overall agreement,” Moscovici told France Inter radio.

“Greece has assumed its responsibilities,” he said, referring to measures on pension cuts, tax hikes and reforms adopted on Thursday by the Greek Parliament.

“I now wish that we, the partners of Greece, also take our responsibilities,” he said.

Moscovici said his optimism over a deal was partly linked to the fact Germany was now aware of the need to find a structural solution to Greece’s problems.

Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel agreed during a call on Wednesday that a deal was “feasible” by Monday.

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Softbank-Saudi Tech Fund Becomes World’s Biggest With $93B of Capital

The world’s largest private equity fund, backed by Japan’s Softbank Group and Saudi Arabia’s main sovereign wealth fund, said Saturday that it had raised over $93 billion to invest in technology sectors such as artificial intelligence and robotics.

“The next stage of the Information Revolution is under way, and building the businesses that will make this possible will require unprecedented large-scale, long-term investment,” the Softbank Vision Fund said in a statement.

Japanese billionaire Masayoshi Son, chairman of Softbank, a telecommunications and tech investment group, revealed plans for the fund last October, and since then it has obtained commitments from some of the world’s most deep-pocketed investors.

In addition to Softbank and Saudi Arabia’s Public Investment Fund, the new fund’s investors include Abu Dhabi’s Mubadala Investment, which has committed $15 billion, Apple Inc., Qualcomm, Taiwan’s Foxconn Technology and Japan’s Sharp Corp.

The new fund made its announcement during the visit of President Donald Trump to Riyadh and the signing of tens of billions of dollars’ worth of business deals between U.S. and Saudi companies. Son was also in Riyadh on Saturday.

After meeting with Trump last December, Son pledged $50 billion of investment in the United States that would create 50,000 jobs, a promise Trump claimed was a direct result of his election win.

Saudi tech access

The fund may also serve the interests of Saudi Arabia by helping Riyadh obtain access to foreign technology. Low oil prices have severely damaged the Saudi economy, and policymakers are trying to diversify into new industries.

The PIF signaled an interest in the tech sector last year by investing $3.5 billion in U.S. ride-hailing firm Uber.

Saturday’s statement did not say how much the PIF had committed to the fund, but previously it had said it would invest up to $45 billion over five years. Softbank is investing $28 billion.

The new fund said it would seek to buy minority and majority interests in both private and public companies, from emerging businesses to established, multibillion-dollar firms. It expects to obtain preferred access to long-term investment opportunities worth $100 million or more.

Other sectors in which the fund may invest include mobile computing, communications infrastructure, computational biology, consumer internet businesses and financial technology. The fund aims for $100 billion of committed capital and expects to complete its money-raising in six months, it added.

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Job Prospects for 2017 College Grads, Best in More Than a Decade

About 3 million Americans will enter the job pool this year as graduation ceremonies get underway at various colleges and universities across the United States. With unemployment at a 10-year low, 2017 is shaping up to be a good year for new grads. But as Mil Arcega reports, success for many will depend on a desire to keep learning and a willingness to go where the jobs are.

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Hey, Graduates: Good Jobs Exist With or Without 4-Year Degree

About three million American university graduates will enter the job market this year. And with unemployment currently at a 10-year low, it’s a good time to be graduating, says Nicole Smith, chief economist at Georgetown University’s Center on Education and the Workforce (CEW).

“We are at one of the lowest unemployment rates we’ve had since May of 2007, so what that means for the graduating class of 2017 is that the likelihood of getting a job is really, really good,” she said.

The U.S. Labor Department says unemployment for those with a four-year bachelor’s degree or higher is 2.5 percent, compared to the overall jobless rate of 4.5 percent. For those with a high school diploma or less, the average unemployment rate is 6.8 percent.

Demand for graduates with associate, bachelor’s and master’s degrees is particularly strong in the STEM fields of science, technology, engineering and mathematics, according to the latest survey by the National Association of Colleges and Employers.

However, Smith says, a four-year degree is not necessary to compete in today’s economy.

“There are about 28 million jobs or so in the U.S. economy that are good-paying jobs; that are high-skilled jobs for people without a B.A,” she said.

While higher learning can give new workers the upper hand, Smith says almost a third of students with bachelor’s degrees are under-unemployed.

“So we have to do this cakewalk, this tightrope walk, to understand exactly what the market demands,” she said.

Options without college degree

A survey of the hottest employment sectors in 2017 shows some of the fastest-growing fields don’t require a four-year degree, according to Bankrate.com senior analyst Mark Hamrick.

“You don’t have to have a college degree for some of those technical jobs, where, let’s say, a kind of therapy might be involved — physical or occupational therapy,” he said.

Health care and service-oriented jobs aimed at the needs of a graying population are bound to remain strong as baby boomers — those born between 1946 to 1964 — continue to retire. But, Hamrick says, some skills are harder to learn in school.

“One of the skills which has been in strong demand really involves people skills — closing the deal, sales … business strategy; charting the course for a viable enterprise, that’s something that’s needed,” he said.

What is clear is that jobs that fueled the economy three or four decades ago are not the same jobs driving the economy today. In the 1970s, manufacturing accounted for nearly two of every five jobs; today, those manufacturing jobs account for fewer than one in 10.   

“The types of manufacturing jobs that remain are jobs that are really high-skill, high-tech, high-demand manufacturing jobs. So those jobs require a lot more skills than their predecessors did,” Smith said.

Life-long learning key

Today’s job market also differs from the past because rapid technological and societal change demands a commitment to life-long learning, which means that getting a degree is just the beginning, according to Smith.  

“Each year, there’s a new … version of technology that we must use,” she said. “So what the students need to be aware of is that they will need to come back to re-up their certification, to re-up their skills.”

Participating in today’s economy also means older and newer workers must be willing to move where the jobs are. Demand for workers is greatest where local economies are dynamic and where populations are growing, says Bankrate.com’s Hamrick. That means the exodus toward bigger cities on the East and West coasts will continue. 

“That’s a process that’s accelerating,” Hamrick said. “It’s not slowing down, and so having the right skills, going where the jobs are located — those are the keys to obtaining and maintaining employment.”

The most recent jobs report shows the U.S. economy added 211,000 jobs in April, and unemployment fell to 4.4 percent. That’s a sharp contrast to the dark days that followed the 2008 financial crisis, when the U.S. economy was losing 800,000 jobs a month and unemployment peaked at 10 percent. 

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Why Trump’s Combative Trade Stance Makes US Farmers Nervous

A sizable majority of rural Americans backed Donald Trump’s presidential bid, drawn to his calls to slash environmental rules, strengthen law enforcement and replace the federal health care law.

But last month, many of them struck a sour note after White House aides signaled that Trump would deliver on another signature vow by edging toward abandoning the North American Free Trade Agreement.

Farm Country suddenly went on red alert.

Trump’s message that NAFTA was a job-killing disaster had never resonated much in rural America. NAFTA had widened access to Mexican and Canadian markets, boosting U.S. farm exports and benefiting many farmers.

“Mr. President, America’s corn farmers helped elect you,” Wesley Spurlock of the National Corn Growers Association warned in a statement. “Withdrawing from NAFTA would be disastrous for American agriculture.”

Within hours, Trump softened his stance. He wouldn’t actually dump NAFTA, he said. He’d first try to forge a more advantageous deal with Mexico and Canada – a move that formally began Thursday when his top trade negotiator, Robert Lighthizer, announced the administration’s intent to renegotiate NAFTA.

Farmers have been relieved that NAFTA has survived so far. Yet many remain nervous about where Trump’s trade policy will lead.

As a candidate, Trump defined his “America First” stance as a means to fight unfair foreign competition. He blamed unjust deals for swelling U.S. trade gaps and stealing factory jobs.

But NAFTA and other deals have been good for American farmers, who stand to lose if Trump ditches the pact or ignites a trade war. The United States has enjoyed a trade surplus in farm products since at least 1967, government data show. Last year, farm exports exceeded imports by $20.5 billion.

“You don’t start off trade negotiations … by picking fights with your trade partners that are completely unnecessary,” says Aaron Lehman, a fifth-generation Iowa farmer who produces corn, soybeans, oats and hay.

Many farmers worry that Trump’s policies will jeopardize their exports just as they face weaker crop and livestock prices.

“It comes up pretty quickly in conversation,” says Blake Hurst, a corn and soybean farmer in northwestern Missouri’s Atchison County.

That county’s voters backed Trump more than 3-to-1 in the election but now feel “it would be better if the rhetoric (on trade) was a little less strident,” says Hurst, president of the Missouri Farm Bureau.

Trump’s main argument against NAFTA and other pacts was that they exposed American workers to unequal competition with low-wage workers in countries like Mexico and China.

NAFTA did lead some American manufacturers to move factories and jobs to Mexico. But since it took effect in 1994 and eased tariffs, annual farm exports to Mexico have jumped nearly five-fold to about $18 billion. Mexico is the No. 3 market for U.S. agriculture, notably corn, soybeans and pork.

“The trade agreements that we’ve had have been very beneficial,” says Stephen Censky, CEO of the American Soybean Association. “We need to take care not to blow the significant gains that agriculture has won.”

The U.S. has run a surplus in farm trade with Mexico for 20 of the 23 years since NAFTA took effect. Still, the surpluses with Mexico became deficits in 2015 and 2016 as global livestock and grain prices plummeted and shrank the value of American exports, notes Joseph Glauber of the International Food Policy Research Institute.

Mexico has begun to seek alternatives to U.S. food because, as its agriculture secretary, Jose Calzada Rovirosa, said in March, Trump’s remarks on trade “have injected uncertainty” into the agriculture business.

Once word had surfaced that Trump was considering pulling out of NAFTA, Sonny Perdue, two days into his job as the president’s agriculture secretary, hastened to the White House with a map showing areas that would be hurt most by a pullout, overlapped with many that voted for Trump.

“I tried to demonstrate to him that in the agricultural market, sometimes words like ‘withdraw’ or ‘terminate’ can have a major impact on markets,” Perdue said in an interview with The Associated Press. “I think the president made a very wise decision for the benefit of many agricultural producers across the country” by choosing to remain in NAFTA.

Trump delivered another disappointment for U.S. farm groups in January by fulfilling a pledge to abandon the Trans-Pacific Partnership, which the Obama administration negotiated with 11 Asia-Pacific countries. Trump argued that the pact would cost Americans jobs by pitting them against low-wage Asian labor.

But the deal would have given U.S. farmers broader access to Japan’s notoriously impregnable market and easier entry into fast-growing Vietnam. Philip Seng of the U.S. Meat Export Federation notes that the U.S. withdrawal from TPP left Australia with a competitive advantage because it had already negotiated lower tariffs in Japan.

Trump has also threatened to impose tariffs on Chinese and Mexican imports, thereby raising fears that those trading partners would retaliate with their own sanctions.

Farmers know they’re frequently the first casualties of trade wars. Many recall a 2009 trade rift in which China responded to U.S. tire tariffs by imposing tariffs on U.S. chicken parts. And Mexico slapped tariffs on U.S. goods ranging from ham to onions to Christmas trees in 2009 to protest a ban on Mexican trucks crossing the border.

The White House declined to comment on farmers’ fears that Trump’s trade policy stands to hurt them. But officials say they’ve sought to ease concerns, by, for example, having Agriculture Secretary Perdue announce a new undersecretary to oversee trade and foreign agricultural affairs.

Many farmers are still hopeful about the Trump administration. Some, for example, applaud his plans to slash environmental rules that they say inflate the cost of running a farm. Some also hold out hope that the author of “The Art of the Deal” will negotiate ways to improve NAFTA.

One such way might involve Canada. NAFTA let Canada shield its dairy farmers from foreign competition behind tariffs and regulations but left at least one exception – an American ultra-filtered milk used in cheese. When Canadian farmers complained about the cheaper imports, Canada changed its policy and effectively priced ultra-filtered American milk out of the market.

“Canada has made business for our dairy farmers in Wisconsin and other border states very difficult,” Trump tweeted last month. “We will not stand for this. Watch!”

Some U.S. cattle producers would also like a renegotiated NAFTA to give them something the current version doesn’t: The right to label their product “Made in America.” In 2015, the World Trade Organization struck down the United States’ country-of-origin labeling rules as unfair to Mexico and Canada.

Many still worry that Trump’s planned overhaul of American trade policy is built to revive manufacturing and that farming remains an afterthought.

“So much of the conversation in the campaign had been in Detroit or in Indiana” and focused on manufacturing jobs,” said Kathy Baylis, an economist at the University of Illinois. The importance of American farm exports “never made it into the rhetoric.”

 

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OPEC May Extend, Deepen Cuts to Oil Output

An OPEC panel reviewing scenarios for next week’s policy-setting meeting is looking at the option of deepening and extending an OPEC-led deal to reduce oil output, OPEC sources said Friday.

OPEC’s national representatives — officials representing the 13 member countries, plus officials from OPEC’s Vienna secretariat — met Wednesday and Thursday to discuss the market.

The two-day meeting, called the Economic Commission Board, was scheduled to finish Thursday but will conclude later Friday, two OPEC sources said.

“We have not agreed on final scenarios,” said one of the sources.

A second source said a deeper supply cut was an option depending on estimated growth in supply from non-OPEC and U.S. shale oil.

The meeting precedes a policy-setting gathering of OPEC and non-OPEC oil ministers May 25 to decide whether to extend their deal to reduce output beyond June 30.

The Organization of the Petroleum Exporting Countries, Russia and other producers originally agreed to cut production by 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market.

Oil prices, trading around $53 a barrel, have gained support from reduced output, but high inventories and rising supply from producers outside the deal have limited the rally, pressing the case for extending the deal.

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Experts: N. Korea Role in WannaCry Cyberattack Unlikely

A couple of things about the WannaCry cyberattack are certain. It was the biggest in history and it’s a scary preview of things to come. But one thing is a lot less clear: whether North Korea had anything to do with it.

 

Despite bits and pieces of evidence that suggest a possible North Korea link, experts warn there is nothing conclusive yet, and a lot of reasons to be dubious.

 

Within days of the attack, respected cybersecurity firms Symantec and Kaspersky Labs hinted at a North Korea link. Google researcher Neel Mehta identified coding similarities between WannaCry and malware from 2015 that was tied to the North. And the media have since spun out stories on Pyongyang’s league of hackers, its past involvement in cyberattacks and its perennial search for new revenue streams, legal or shady.

Meet Lazarus

 

But identifying hackers behind sophisticated attacks is a notoriously difficult task. Proving they are acting under the explicit orders of a nation state is even trickier.

 

When experts say North Korea is behind an attack, what they often mean is that Pyongyang is suspected of working with or through a group known as Lazarus. The exact nature of Lazarus is cloudy, but it is thought by some to be a mixture of North Korean hackers operating in cahoots with Chinese “cyber-mercenaries” willing to at times do Pyongyang’s bidding. 

 

Lazarus is a serious player in the cybercrime world.

 

It is referred to as an “advanced persistent threat” and has been fingered in some very sophisticated operations, including an attempt to breach the security of dozens of banks this year, an attack on the Bangladesh central bank that netted $81 million last year, the 2014 Sony wiper hack and DarkSeoul, which targeted the South Korean government and businesses.

 

“The Lazarus Group’s activity spans multiple years, going back as far as 2009,” Kaspersky Labs said in a report last year. “Their focus, victimology, and guerrilla-style tactics indicate a dynamic, agile and highly malicious entity, open to data destruction in addition to conventional cyberespionage operations.”

WannaCry doesn’t fit

 

But some experts see the latest attack as an anomaly.

 

WannaCry infected more than 200,000 systems in more than 150 countries with demands for payments of $300 in Bitcoin per victim in exchange for the decryption of the files it had taken hostage. Victims received warnings on their computer screens that if they did not pay the ransom within three days, the demand would double. If no ransom was paid, the victim’s data would be deleted. 

 

As ransomware attacks go, that’s a pretty typical setup.

 

But that’s not — or at least hasn’t been — the way North Korean hackers are believed to work. 

 

“This is not part of the previously observed behavior of DPRK cyberwar units and hacking groups,” Michael Madden, a visiting scholar at the Johns Hopkins School of Advanced International Studies and founder of North Korea Leadership Watch, said in an email to The Associated Press. “It would represent an entirely new type of cyberattack by the DPRK.” 

 

Madden said the North, officially known as the Democratic People’s Republic of Korea, if it had a role at all, could have instead been involved by giving or providing parts of the packet used in the attack to another state-sponsored hacking group with whom it is in contact. 

 

“This type of ransomware/jailbreak attack is not at all part of the M.O. of the DPRK’s cyberwar units,” he said. “It requires a certain level of social interaction and file storage, outside of those with other hacking groups, that DPRK hackers and cyberwar units would not engage. Basically they’d have to wait on Bitcoin transactions, store the hacked files and maintain contact with the targets of the attack.”

Attack not strategic

 

Other cybersecurity experts question the Pyongyang angle on different grounds. 

 

James Scott, a senior fellow at the Institute for Critical Infrastructure Technology, a cybersecurity think tank, argues that the evidence remains “circumstantial at best,” and believes WannaCry spread because of luck and negligence, not sophistication.

 

“While it is possible that the Lazarus group is behind the WannaCry malware, the likelihood of that attribution proving correct is dubious,” he wrote in a recent blog post laying out his case. “It remains more probable that the authors of WannaCry borrowed code from Lazarus or a similar source.”

 

Scott said he believes North Korea would likely have attacked more strategic targets — two of the hardest-hit countries, China and Russia, are the North’s closest strategic allies — or tried to capture more significant profits. 

 

Very few victims of the WannaCry attack appear to have paid up. As of Friday, only $91,000 had been deposited in the three Bitcoin accounts associated with the ransom demands, according to London-based Elliptic Enterprises, which tracks illicit Bitcoin activity.

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Greek Parliament Approves More Economic Austerity

The Greek Parliament approved another round of tough economic cuts and austerity measures Thursday to assure itself another installment payment of European bailout funds.

Greece may have again faced bankruptcy in July without the payment.

More cuts for pensioners

All 153 lawmakers in Prime Minister Alexis Tsipras’ leftist coalition voted for the cuts; all 128 opposition members voted no.

More than 10,000 Greeks weary of the nation’s economic problems, including elderly pensioners facing more cuts, marched outside Parliament against the measures.

Several dozen young marchers wearing masks broke away from the crowd to throw gasoline bombs at police, who responded with tear gas.

Greece desperately needs about $8 billion of bailout money from its eurozone lenders in order to make a scheduled debt payment.

Tax hikes part of deal

In exchange, the government agreed to EU demands for more austerity measures, including tax hikes and programs aimed at easing poverty.

With Thursday’s vote, Greek officials hope they can renegotiate payment terms on the nation’s massive debt payment — nearly 180 percent of Greece’s gross domestic product. The International Monetary Fund calls this number unsustainable.

Greece has been relying on international bailouts since 2010, when the outgoing conservative government badly underreported the country’s debt.