Lagarde urges policymakers to resolve manmade economic threats

MSN – AFP, 20 September 2019

Eric BARADAT Outgoing IMF Managing Director Christine Lagarde gives an
exclusive interview to AFP journalists at the IMF headquarters in Washington
on September 19, 2019

Accustomed to being the first woman in influential leadership positions and speaking frankly to men in power, Christine Lagarde says manmade threfinats to the global economy can be "man-fixed."

Lagarde only last week left her post as head of the International Monetary Fund after eight years, the first woman to serve in that role, and she is expected to put another "first" on her resume by the end of the year: first woman to serve as president of the European Central Bank.

Eric BARADAT Christine Lagarde is expected to take over
leadership of the European Central bank and calls for
 policymakers to address manmade threats to global growth

She sees a world economy where growth is "fragile" and "under threat" from trade frictions and Brexit, and perhaps an over-reliance on the efforts of central banks like the ECB.

But while she tried to urge action during her time at the IMF -- she took over in 2011 in the aftermath of the global financial crisis -- she said a central bank should "stick to its mandate," which perhaps is a clue to how she will run the ECB.

Or perhaps not.

She carefully avoided a commitment about how she would use her influence in the new post.

Manmade problems can be 'man-fixed'

In perfect English and always engaging and crisply professional, Lagarde sat down with AFP on Thursday to review her legacy at the Washington-based crisis lender, where she arrived after being the first woman finance minister of France.

In bare numbers, her record is impressive: the IMF helped to avoid a global depression, 90 countries -- nearly half of its members -- benefitted from some form of lending or credit line during the crisis, and the lending capacity was doubled to $1 trillion.

One of her main regrets is that she ran out of time to convince the member governments to increase those resources further, since the IMF, which sits "right at the core, at the center of the global financial safety net," may not have enough cash to address the next inevitable crisis.

Still, the IMF remains influential over economic and financial policy matters.

"I think we have spoken truth to power, not always to the power's pleasure," Lagarde said.

But as she leaves Britain is poised to crash out of the European Union, with no deal to cushion the blow in place as yet, while "America First" President Donald Trump has waged a multi-front trade war primarily targeted at China.

Those threats have undercut confidences and business investment as well as exports, and global growth could by some estimates fall to the slowest pace since 2008 at the start of the financial crisis.

But Brexit and trade frictions "are manmade and can be man-fixed," and Lagarde quipped, "A bit of woman wouldn't hurt."

Where are the roof fixers?

She has often urged governments to "fix the roof while the sun is shining," borrowing from former US President John F Kennedy, pushing for spending while times are good to fix long-term problems and help people left behind by globalization and technological change.

Yet even amid a worldwide wave of anger against trade and globalization, officials who control the purse strings of governments have not done enough, Lagarde said.

Instead central banks have done much of the heavy lifting in preventing the financial crisis from becoming a depression.

"I think central bankers have done an awful lot and were for many years regarded as the only game in town," she said.

If confirmed, Lagarde will step into her new post as one of those central bankers in an environment where Trump has maintained a relentless campaign against the US Federal Reserve for not cutting interest rates aggressively to stimulate growth, while others in Europe have criticized outgoing ECB President Mario Draghi for cutting rates further into negative territory to juice a sluggish EU economy.

Experience shows that when politicians meddle with central bank independence it "doesn't pan out very well," she cautioned, but at the same time "a central bank has to do the job that it is assigned to do... they should stick to facts and data so that they could be predictable."

In her new post leading the ECB, she pledged to focus on job creation and stability, but stability alone may not be enough in the lives of real people.

MEPs narrowly elect von der Leyen to EU top job

Yahoo – AFP, Marie JULIEN, Céline LE PRIOUX, July 16, 2019

Ursula von der Leyen has been elected as the first woman to be president of
the European Commission (AFP Photo/FREDERICK FLORIN)

Strasbourg (France) (AFP) - German defence minister Ursula von der Leyen was narrowly elected president of the European Commission on Tuesday after winning over sceptical lawmakers.

The 60-year-old conservative was nominated to become the first woman to hold Brussels' top job last month by the leaders of the bloc's 28 member states, to the annoyance of many MEPs.

The Strasbourg parliament would have preferred a candidate chosen by one of its political groups, but in the end a small majority -- 383 members of the 751-member assembly -- voted for her.

She will now replace Jean-Claude Juncker as head of the EU executive on November 1, one day after Britain is due to leave the union, and serve a five-year term.

"The task ahead of us humbles me. It's a big responsibility and my work starts now," the polyglot mother-of-seven told lawmakers, thanking all members "who decided to vote for me today."

Ursula von der Leyen has still not managed to win over the Greens and the 

far-left (AFP Photo/FREDERICK FLORIN)

"My message to all of you is let us work together constructively, because the endeavour is a united and strong Europe," she said, urging capitals to nominate an equal number of men and women to join her commission.

If von der Leyen had lost, Brussels faced a summer of infighting instead of preparing for Brexit, battling Italy over its debt and confronting Hungary and Poland over threats to democratic values.

'A majority is a majority'

At a news conference after the vote, von der Leyen played down the narrowness of her win, noting that a "majority is a majority" and acknowledging that some members had opposed the nomination process.

"Two weeks ago I didn't have a majority because no one knew me. There was a lot of resentment because I wasn't a lead candidate," she admitted, adding that she was happy to build a majority so quickly.

"It's a good base to start with," she said. The veteran minister will head briefly to Berlin on Wednesday to say farewell to her government and the German armed forces, then return to work on building an administration.

In Berlin, Chancellor Angela Merkel praised her long-time ally as a "committed and convincing European" who would "tackle with great vigour the challenges facing us as the European Union".

Brussels-born Ursula von der Leyen won over a majority in the European 

Parliament (AFP Photo/Gal ROMA)

The president of the European Council of EU leaders, Donald Tusk, also congratulated von der Leyen, having previously declared "she will be a passionate fighter for Europe's unity."

From the left, Spanish Prime Minister Pedro Sanchez also offered his congratulations, but said von der Leyen must push for "a more social, fair, sustainable and feminist Europe."

Von der Leyen has had only a short time since the 28 EU leaders nominated her to win over the main centre-right EPP, socialist S&D and liberal Renew Europe blocs she hoped would get her the necessary 374 votes.

In the hours between her speech and the start of voting, party officials suggested she could count on the centre-right, almost all of the liberals and maybe two-thirds of the left.

The election was by secret ballot, but the tight margin of victory suggested that she had only won over the pro-European centre -- and that several mainstream members abstained.

Top jobs package

The nominee announced Monday that she would step down from Angela Merkel's German government this week whatever happened in the vote, underlining her European ambitions.

How the new European Parliament's membership breaks down (AFP 

Photo/Paz PIZARRO)

Juncker received 422 votes five years ago, and Brussels-born von der Leyen's 383 was seen as disappointing in comparison, given she was backed by figures like France's President Emmanuel Macron.

Von der Leyen's nomination was part of a package of so-called "top jobs" and outgoing Belgian premier Charles Michel is still in line to head the European Council of EU leaders.

IMF director Christine Lagarde's appointment to the European Central Bank also remains on course, and on Tuesday the French former finance minister announced her resignation from the global body.

In addition to Brexit and the other issues facing the EU, member states are also wrangling over new rules for distributing migrants and refugees after Italy's populist government began to prevent rescue boats from landing.

For that, the commission president will need a reliable majority in Strasbourg, after this year's elections threw up a more fragmented EU parliament than ever.

Spain court confirms jail term for ex-IMF chief Rato

Yahoo – AFP, Marianne BARRIAUX, October 3, 2018

The case involving former IMF head Rodrigo Rato outraged Spaniards who
endured a severe economic crisis (AFP Photo/DANI POZO)

Madrid (AFP) - Spain's Supreme Court on Wednesday confirmed former IMF chief Rodrigo Rato's jail sentence of four years and six months for misusing funds in a case that sparked outrage when it was uncovered at the height of the country's economic crisis.

In February 2017, Rato was found guilty by the Madrid-based National Court of paying for personal expenses with credit cards put at his disposal when he was the boss of Caja Madrid and Bankia, at a time when both banks were in difficulty.

The 69-year-old, who is also a former Spanish economy minister, had since then been free on bail pending an appeal.

The case shocked Spain, where it was uncovered at the height of the crisis that left many people struggling financially. Bankia later had to be nationalised.

Far-left party Podemos welcomed the court ruling, saying Spaniards had long demanded justice "for those who robbed public money, for those who ripped off thousands of families, for those who burdened us with debt for life".

"We applaud the fact that some of those responsible, like Rodrigo Rato, get at least part of what they deserve," it said in a tweet.

Misuse of 12 million euros

Rato was tried with 64 other former executives and board members at both banks accused of misusing a total of 12 million euros ($13.8 million) between 2003 and 2012 in personal expenses.

Those included petrol for their cars, supermarket shopping, pricey holidays, luxury bags or parties in nightclubs.

One of the executives, Miguel Blesa -- Rato's predecessor at Caja Madrid -- was sentenced to six years in jail.

In July 2017, Blesa was found dead with a gunshot wound to his chest at a private hunting estate in southern Spain.

An autopsy ruled it was suicide.

Second trial

The Supreme Court will now notify the National Court of its decision, which will then summon Rato and give him a deadline -- usually 10 to 15 days -- to allow him to pick a prison and go there voluntarily.

Authorities will issue an arrest warrant against him if he does not.

Rato was economy minister and deputy prime minister in the conservative government of Jose Maria Aznar from 1996 to 2004, before going on to head up the International Monetary Fund until 2007.

His subsequent career as a banker in Spain was short-lived -- from 2010 to 2012. But apart from the case of the undeclared credit cards, it also led to another banking scandal considered the country's biggest.

Thousands of small-scale investors lost their money after they were persuaded to convert their savings to shares ahead of the flotation of Bankia in 2011, with Rato at the reins.

Less than a year later, he resigned as it became known that Bankia was in dire straits.

The state injected billions of euros but faced with the scale of Bankia's losses and trouble in other banks, it asked the European Union for a bailout for the entire banking sector and eventually received 41 billion euros.

Rato is due to stand trial over the case, accused of falsifying information about Bankia's finances to encourage investors to buy into its stock market listing.

He is the third former IMF chief to get into trouble with the law.

His successor Dominique Strauss-Kahn was tried in 2015 on pimping charges in a lurid sex scandal, and was acquitted.

And Christine Lagarde, who took over from Strauss-Kahn and is the current IMF chief, was found guilty of negligence over a state payout to a tycoon when she was French finance minister, though she received no penalty.

Greece gets fresh cash on road to leaving bailout

Digital Journal – AFP, Danny Kemp, 22 January 2018

New Eurogroup Portuguese President Mario Centeno rang a symbolic bell as he

presided over his first Eurogroup finance ministers meeting. EMMANUEL DUNAND, AFP

Eurozone finance ministers approved a fresh cash injection for Greece on Monday to put the country on the road to finally leaving its long and painful bailout programme later this year.

They also said they would start work on possible debt relief for Athens, despite reservations on the part of powerful Germany which has pushed a more austere line.

The new 6.7-billion-euro tranche agreed by ministers in Brussels is the latest from Greece's third financial rescue package since 2010, when its debt crisis brought the euro close to collapse.

The current programme agreed in 2015 runs until August this year, after which the southern European nation hopes to fully return to market financing and get back on its own two feet.

EU Economic Affairs Commissioner Pierre Moscovici said 2018 "will be a decisive year for Greece".

"This will be the year when Greece finally leaves this long period of financial assistance, marked by very hard tests for the Greek people, but which allow Greece to emerge stronger and more resilient," France's Moscovici told a news conference.

Portugal's Mario Centeno -- chairing his first meeting of the Eurogroup of 19 finance ministers from the single currency -- said they would also start "technical work" on "debt relief measures" for Athens.

Greece's huge debt pile is equivalent to an unsustainable 180 percent of its annual economic output.

'Things have turned around'

Greek finance minister Euclid Tsakalotos -- a key figure in the 2015 bailout negotiations that nearly saw Greece crash out of the euro -- said it was a "very good meeting" for his country.

"People are now convinced that things have turned around, and people are beginning to talk about the future and Greece's exit from the programme," he told reporters.

The mention of debt relief was "particularly significant"," he added.

The latest tranche will be split into 5.7 billion euros paid in February and the remaining one billion paid later in the spring once eurozone officials have checked that Greece has carried out all the reforms, the Eurogroup said in a statement.

Centeno, chairing his first Eurogroup for the first time after replacing Jeroen Dijssebloem of the Netherlands, said the cash would cover debt servicing, arrears and boosting Greece's cash reserves ahead of the end of the bailout, said Centeno.

"This is critical to ensure Greece's full market access," he added.

Thousands of people demonstrated in Athens one week ago against the set of around 100 austerity measures imposed by Greece's creditors, which include a politically-charged curb on industrial action.

The reforms also allow for the foreclosure and auction of properties owned by bankrupted borrowers. Both measures were fiercely opposed by leftists and trade unions.

The Greek government insists that the changes are limited, and Prime Minister Alexis Tsipras rejected criticism "as a shameless lie" that his left-wing administration was out to make strikes illegal.

Debt-laden Greece has received three multi-billion-euro bailouts since 2010.

The current rescue programme -- a package worth 86 billion euros agreed after months of talks that almost saw Greece crash out of the euro -- is financially supported by eurozone states but not the International Monetary Fund.

Greece agrees reforms to break bailout impasse

Yahoo – AFP, Alex PIGMAN with John HADOULIS in Athens, 7 April 2017

Greece cedes to reform demands to snap bailout impasse

Greece agreed on a fresh set of reforms with its eurozone creditors on Friday with hopes that Athens could unlock bailout cash in time to avert a debt default just months away.

Eurozone finance ministers meeting in the Maltese capital of Valletta said Athens agreed in principle to the new reforms and technical teams would visit Greece as soon as possible to seal the deal.

"The big blocks have now been sorted out and now we just have the final stretch," Eurogroup head Jeroen Dijsselbloem said after the talks.

Heavily-indebted Athens and the EU and IMF which handle the bailout have been deadlocked over reforms for months amid disagreements on debt relief and budget targets.

The deal is needed in order to stop the country from defaulting on its creditors as early as July, when Athens owes about seven billion euros ($7.4 billion) in debt repayments.

Dijsselbloem said the Greek government was now prepared to reduce pensions in 2019 and lower tax breaks in 2020 in return for a bailout payment despite widespread public opposition.

Greek Finance Minister Euclid Tsakalotos said the commitments would pass through parliament as soon as possible, though the gamble depends on his Syriza party's razor-thin majority.

'Before summer'

Tsakalotos said his eurozone counterparts had also accepted that Greece boost social spending if budget targets were met and that debt relief would also come back to the table.

"We will be ready for all the pieces of the puzzle to fit in for the discussion on debt," said Tsakalotos, for whom debt relief is a key demand.

"I think we will have (a solution) well before summer," he added.

The eurozone is under big pressure to end the feud in order to avert inflicting damage to a stalling Greek recovery.

Despite projections for growth, the Greek economy actually stalled in 2016 and recent data shows that after some stabilisation, it has begun to falter again amid uncertainty triggered by the row.

"Greece needs this; we must end the uncertainties that are scaring investors," EU Economic Affairs Commissioner Pierre Moscovici said.

The sketch of a deal was a victory of sorts for Dijsselbloem who visited Brussels and Berlin ahead of Friday's talks in hopes of finding a compromise.

Prime Minister Alexis Tsipras had until now refused to accept any commitments beyond the term of its current bailout that is due to end in 2018, arguing that his government would not have the votes in parliament.

The impasse has held up the latest instalment of Greece's 86-billion-euro ($92-billion) bailout, agreed in 2015 with the 19 countries that use the single currency.

Without a deal in Malta, Tsipras said he would ask for a eurozone leaders summit later this month, and made his case in a phone call to German Chancellor Angela Merkel, Europe's most powerful leader.

IMF row

Also pressing matters is a desire by eurozone ministers to present a united front to the International Monetary Fund (IMF) later this month at the fund's annual meetings in Washington.

The Europeans have been at loggerheads with the IMF over the Washington-based lender's demands for more realistic budget targets and firm commitments to reduce Greece's mountain of debt.

An agreement among eurozone ministers would go a long way towards getting the IMF on board as a financial partner in the bailout, a major demand of Germany, Greece's biggest lender.

The IMF has so far stayed out of the current rescue, Greece's third since 2010.

Ex-IMF chief Rato handed 4.5 years in jail for embezzlement

Yahoo - AFP, Marianne BARRIAUX, February 23, 2017

Former IMF chief Rodrigo Rato was handed a jail sentence of four years and
six months for misusing funds when he was the boss of two Spanish banks

Former IMF chief Rodrigo Rato was handed a jail sentence of four years and six months Thursday for misusing funds when he was the boss of two Spanish banks.

Spain's National Court, which deals with cases of corruption and financial crime, said Rato had been found guilty of embezzlement when he headed Caja Madrid and Bankia, at a time when both groups were having difficulties.

The case caused an outrage in Spain, where it was uncovered at the height of a severe economic crisis that left many people struggling financially -- made all the worse because Bankia later had to be nationalised.

Rato, who is also a former Spanish economy minister, remains at liberty pending a possible appeal.

He was on trial with 64 other former executives and board members at both banks accused of misusing 12 million euros ($12.7 million) between 2003 and 2012.

They were accused of having paid for personal expenses with credit cards put at their disposal by both Caja Madrid and Bankia, without ever justifying them or declaring them to tax authorities.

These expenses included petrol for their cars, supermarket shopping, pricey holidays, luxury bags or parties in nightclubs.

'Corrupt system'

According to the indictment, Rato maintained the "corrupt system" established by his predecessor Miguel Blesa when he took the reins of Caja Madrid in 2010.

He then replicated the system when he took charge of Bankia, a group born in 2011 out of the merger of Caja Madrid with six other savings banks, prosecutors said.

Blesa was sentenced to six years in jail.

Rato, 67, had always denied any wrongdoing and said the credit cards were for discretionary spending as part of executives' pay deal.

He told court last October that everything "was completely legal".

Rato will not necessarily go directly to jail if he appeals the ruling, just like the Spanish king's brother-in-law Inaki Urdangarin who has been left free without posting bail following his sentence of six years and three months for syphoning off millions of euros.

Urdangarin's temporary reprieve pending his appeal, also announced on Thursday, made waves in Spain where people have long criticised what is perceived as the impunity of the elite.

Spain's National Court said former IMF chief Rodrigo Rato had been found 

guilty of embezzlement when he headed up Caja Madrid and Bankia, at a time 

when both groups were having difficulties

IMF chiefs in the dock

Rato was economy minister and deputy prime minister in the conservative government of Jose Maria Aznar from 1996 to 2004, before going on to head up the International Monetary Fund until 2007.

His subsequent career as a banker in Spain was short-lived -- from 2010 to 2012 -- but apart from the case of the undeclared credit cards, it also led to another banking scandal considered the country's biggest ever.

Thousands of small-scale investors lost their money after they were persuaded to convert their savings to shares ahead of the flotation of Bankia in 2011, with Rato at the reins.

Less than a year later, he resigned as it became known that Bankia was in dire straits.

The state injected billions of euros but faced with the scale of Bankia's losses and trouble in other banks, it asked the European Union for a bailout for the entire banking sector and eventually received 41 billion euros.

Rato and others were put under investigation, accused of misleading small investors in the listing knowing the state of Bankia, which has since paid out 1.2 billion euros in compensation.

He is the third former IMF chief to get into trouble with the law.

His successor Dominique Strauss-Kahn was tried in 2015 on pimping charges in a lurid sex scandal, and was acquitted.

And Christine Lagarde, who took over from Strauss-Kahn and is the current IMF chief, was found guilty of negligence over a massive state payout to a tycoon when she was French finance minister, though she received no penalty.

Others were also sentenced Thursday in the case involving Rato.

Among them Francisco Baquero Noriega, a unionist once on the board of Caja Madrid who was sentenced to three years and two months in jail.

Rafael Spottorno, the former head of the royal household, was given two years' prison while Francisco Javier Lopez Madrid, a friend of the royals', was handed six months.

EU nations urge crackdown as Panama Papers claim Spanish minister

Yahoo – AFP, Paul Handley, 15 April 2016

Spain's industry minister Jose Manuel Soria (pictured) resigned over allegations 

he had links to offshore companies (AFP Photo/Eduardo Dieguez)

Washington (AFP) - Europe's top economies called for a crackdown on tax havens and urged G20 countries to rip away the secrecy protecting shell companies, as the Panama Papers scandal claimed Spain's industry minister as the latest political victim.

In the strongest reaction yet to the leaked Panama Papers, the finance ministers of Britain, France, Germany, Italy and Spain proposed a blacklist of havens like Panama if they failed to share corporate registry data.

"Today we deal another hammer blow ‎against those who hide their illegal tax evasion in the dark corners of the financial system," British Finance Minister George Osborne said in a statement.

Spain's industry minister, Jose Manuel Soria, stepped down Friday after being named in the leaked papers, citing "mistakes" in explaining his alleged offshore interests and "the obvious harm that this situation is doing to the Spanish government".

Soria's troubles began on Monday when Spanish online daily El Confidencial, which has had access to the Panama Papers, said he was an administrator of an offshore firm in 1992.

Soria called a news conference to deny any link to the company, but as the week went by, more allegations emerged from other media outlets, revealing further alleged connections to offshore havens.

It is unclear as yet whether any of his alleged actions were illegal.

'Aggressive tax planning'

In their joint statement during a meeting of the World Bank and International Monetary Fund in Washington, the five EU ministers said: "The recent extensive leaks from Panama show the critical importance of the fight against tax evasion, aggressive tax planning and money laundering."

World Bank President Jim Yong Kim said the illicit financial activities enabled by tax havens undermined the fight against poverty.

"When taxes are evaded, when state assets are taken and put into these havens, all of these things can have a tremendous negative effect on our mission to end poverty and boost prosperity," he said.

Graphic showing public figures forced to resign or under pressure following the

Panama papers revelations (AFP Photo/Alain BOMMENEL, Kun TIAN)

The joint European move was a reaction to the leak of thousands of documents on anonymously-owned shell companies from Mossack Fonseca, a Panamanian law firm that specialized in setting up such firms.

The trove showed the use of shell companies by prominent politicians including close associates of Russian President Vladimir Putin, family members of Chinese leaders, British Premier David Cameron, and the leaders of Iceland and Argentina.

The leak placed Panama in the spotlight as one of the leading havens that have not joined an agreement on sharing information on bank accounts and other assets.

The five threatened to create a blacklist of countries which do not cooperate on sharing data. "We want to have lists which make it possible to place sanctions on countries which don't respect the rules," French Finance Minister Michel Sapin said.

Under pressure, Panama said Thursday it was ready to begin working together with the "Common Reporting Standard" (CRS) system on sharing information about assets and accounts.

"Panama's path to financial transparency is irreversible," Vice President Isabel de Saint Malo de Alvarado said in a statement.

But the Oxfam anti-poverty group, which released Thursday a paper showing how top US coproations have socked away $1.4 trillion in profits in tax havens, said the European proposals are still too weak.

"If the proposed registry of beneficial owners of companies and trusts is hidden from the public, how can we know who is hiding their profits and fortunes and trying to avoid paying their fair share?" they said.

A policeman stands guard outside Mossack Fonseca headquarters in Panama City

 (AFP Photo/Ed Grimaldo)

Warnings over slow growth

In the meetings that got underway Thursday, both the IMF and World bank urged countries to do more to support economic growth and prevent the world from backsliding toward recession.

They said the demand for financial support from struggling governments has risen to levels normally seen during crises.

"In the global economy, there are not many bright spots," World Bank President Kim said. "The weakening global economy threatens our progress toward ending extreme poverty by 2030."

"We are on alert, not alarm," IMF chief Christine Lagarde said.

"The current policy responses that we are seeing need to go faster and need to go deeper."

Lagarde also warned that Britain's threatened pullout for the European Union was a "serious concern" for the global economy.

"It's been a long marriage between members of the European Union," she said.

"It's really my personal hope that it doesn't break," she added. "Like all marriages, good talks can actually help and I hope that the dialogue can continue."

French Finance Minister Michel Sapin speaks next to German Finance Minister

 Wolfgang Schauble (L) and Spanish Minister of Economy Luis De Guindos (R),

during a press conference on April 14, 2016 in Washington, DC (AFP Photo/Molly Riley)

Related Articles:

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EU nations urge crackdown as Panama Papers claim Spanish minister

British PM releases tax summary in offshore row

German FM lauds Kyrgyzstan as a stable democracy in a volatile region

German Foreign Minister Steinmeier has visited the central-Asian Republic of Kyrgyzstan, praising the country as a "living democracy." However, he also highlighted the growing threat posed to the region by extremism.

Deutsche Welle, 1 April 2016

 Frank-Walter Steinmeier and Almazbek Atambayev

While touring Bishkek, the capital of the former Soviet Republic of Kyrgyzstan, German Foreign Minister Frank-Walter Steinmeier promised to deliver further funds in aid to help the country maintain a stable democracy. Following a meeting with President Almazbek Atambayev, Steinmeier announced that Kyrgyzstan paid an "exceedingly important contribution to guaranteeing stability in the region as a living, parliamentary democracy."

With the so-called "Islamic State" movement gaining influence in the region and recruiting a fast-growing number of locals to fight for them in Syria and Iraq, Steinmeier also stressed that a strong democracy provided a good measure to prevent "radicalism and fundamentalism from taking hold."

Kyrgyz Foreign Minister Erlan Abdyldaev said, however, that in order maintain that standard, the country needed more money.

"We also wish for our country to be open and democratic. But democracy cannot thrive in poverty," he said, according to the German DPA news agency.

A lifeline out of poverty

With the country's economy relying largely on the mining of coal and gold, 40 percent of its 5.7 million-strong population are currently living below the poverty line, according to the International Monetary Fund. But with Russia's economy dragging many of its former Soviet republics down as well, stability and safety come at a cost, which the landlocked republic can barely afford.

Kyrgyzstan was Steinmeier's second stop in a three-day-tour of the region. Having visited Uzbekistan earlier, the foreign minister prepared to head for his final stop on the itinerary, Tajikistan, where he is due to meet with authoritarian President Emomali Rahmon, who has been ruling over the impoverished mountain state since it broke off from the USSR in 1991.

ss/jr (dpa)

Rally against 'missing billion dollars' in Moldova

Protesters have called on the government to investigate more than a billion dollars missing from banks. The scam has driven down the national currency, stoked inflation and hurt standards of living.

Deutsche Welle, 6 Sep 2015

Protesters yelled "we want the one billion back!" on Sunday, urging the central bank governor, the general prosecutor and others to resign.

In a fraud that has exposed endemic corruption and demonstrated the power of oligarch groups in the country, $1 billion (900,000 euros) has disappeared from the banking system - roughly one eighth of Moldova's gross domestic output.

The state-owned Savings Bank, the Social Bank and Unibank, where the money disappeared from before November 2014 parliamentary elections, were put under the National Bank of Moldova's administration in December, and the losses were covered by state cash reserves.

The banks will be liquidated by October.

Outrage over corruption

Protesters rallied in central Chisinau

That's led to a crisis in confidence among many Moldovans left to foot the bill in the ex-Soviet country of 3.5 million people.

"Dictatorship does not sleep. It is quaking with fear, doing everything it can to stop people from all regions coming here to the capital, Chisinau," said one organizer, Valentin Dolganiuc. "But we, tens of thousands of ordinary people, have come here to triumph and we shall."

Protesters directed much of their criticism at the country's super-wealthy oligarchs who control key sectors of the economy, threatened to stage a non-stop demonstration in central Chisinau until their demands were met.

The scandal has also tarnished the image of the pro-Europe ruling class for ordinary Moldovans, many of whom struggle by on a family income of about $300 (270 euros) a month, though many protesters carried pro-EU flags indicating they were not against European integration.

Police put the strength of Sunday's rallies at between 35,000 and 40,000 - bigger even than mass anti-communist protests of April 2009. Organizers claimed that three times as many turned out, many arriving from surrounding provinces.

The rallies will be a setback for Prime Minister Valeriu Strelet, whose appointment in July to succeed a disgraced predecessor opened the door to renewed dealings with international lenders including the IMF.

In an interview with Reuters in August, Strelet said Moldova would step up efforts to try to trace the missing $1 billion and bring the money back to Moldova from bank accounts abroad.

But an unpublished parliamentary report said some of the money was transferred to Russian banks. The banks are owned by Moldovan and Russian investors.

jar/se (Reuters, AP)