One thing is clear — this latest incident is an appalling reminder of what happens when people escaping persecution are denied access to safety at the EU’s frontiers. While we don’t know the personal circumstances of everyone on board this particular boat, we do know that the majority were from Somalia and Eritrea, two of the top 10 sources of refugees in the world, according to the UNHCR. Both are countries with well documented human rights abuses. Dozens dead in Italian boat accident Given this, it’s reasonable to believe that a number of people on board were refugees, fleeing persecution and seeking safety in Europe where there are substantial and settled Somali and Eritrean communities. Yet there’s been considerable head scratching in the media about why people would put themselves at such risk. Why would you get on an overcrowded, potentially unseaworthy vessel and risk your life to make it to Lampedusa? For refugees, the answer is simple — what they’re leaving behind is much, much worse. Somalia and Eritrea’s human rights abuses are well documented. Sexual violence and torture are commonplace. For refugees, staying at home — or ‘going back to where they came from’ — is not an option. Difficult though it may be for us to comprehend, for refugees, paying smugglers and boarding these boats is a rational decision. The problem is compounded by the lack of safe, legal routes into Europe.
Europe needs Germany to form government soon: ECB’s Asmussen
House Speaker John Boehner said the country may default if President Barack Obama doesnt negotiate over the budget. The Markit iTraxx Europe Index of credit-default swaps on 125 companies with investment-grade ratings climbed 2.1 basis points to 99 basis points at 11:31 a.m. in London , the biggest increase since Sept. 27. The Markit iTraxx Crossover Index of 50 companies with mostly speculative-grade ratings jumped 8.5 basis points to 395 basis points. House Republicans will not back raising the governments $16.7 trillion borrowing limit unless the Democrats agree to other provisions, Boehner said in a TV interview yesterday. Both sides have 10 days to end their standoff before the U.S. exhausts measures to avoid breaching the debt ceiling and risk defaulting on its payments, according to Treasury Secretary Jacob J. Lew. The markets have entered the week on the back foot with the U.S.s ongoing fiscal impasse weighing on risk appetite, Richard McGuire and Lyn Graham-Taylor, fixed-income strategists at Rabobank International in London, wrote in a note to clients. Nevertheless, the continued modest nature of the risk off move associated with the fiscal impasse indicates the market remains broadly confident a solution will ultimately be found. Average yields on investment-grade bonds in euros rose 12 basis points last week to 2 percent, the highest since Sept. 18, Bloomberg bond index data show. Yields on junk-rated notes fell 10 basis points to a seven-week low of 4.7 percent.
You must enter the verification code below to send. Invalid entry: Please type the verification code again. October 7, 2013, 8:07 a.m. Uncertainty Text By Tommy Stubbington European shares fell Monday, as the partial shutdown of the U.S. government dragged into its second week and investors grew increasingly nervous over the looming debt-ceiling debate. Indexes across the continent shed around 1% after the weekend yielded few signs of progress in ending the shutdown, more than reversing Friday’s modest rise. U.S. stock futures pointed toward a weaker opening on Wall Street. On Sunday, House Speaker John Boehner said he wouldn’t seek to fully reopen the government unless Democrats agree to broader talks on reducing the deficit. The Stoxx 600 index, which includes a wide variety of European stocks, declined 0.9% to its weakest level in nearly a month. German and French stock markets both fell by more than 1%, while London’s FTSE 100 had lost 0.9% in the middle of the European session. That echoed the trend in Asian markets, where the drawn-out uncertainty drove Japan’s Nikkei index to a fresh one-month low.
Credit Risk Climbs in Europe as U.S. Deadlock Threatens Default
Germany, the euro zone’s biggest economy, has slowed the project for closer financial integration because of its federal election in September and Chancellor Angela Merkel’s subsequent search for a coalition partner to secure her a third term. “Swift formation of a government would certainly be helpful from a European point of view as there are important decision to be taken for Europe, for example on banking union,” Asmussen told Reuters. Time was short in the run up to the European Parliament elections next year, he said. Asmussen, who was a deputy finance minister before joining the ECB last year, has been tipped by some media to become the next German finance minister, but said recently that he planned to fulfill his ECB contract, which lasts until the end of 2019. The most pressing decision now was to agree by December on a common mechanism to wind down or restore ailing euro zone banks and Asmussen said the timetable was “ambitious, but manageable”. The ECB is particularly interested in having a single resolution mechanism in place by the time it starts supervising euro zone banks from late next year. “Without doubt it is preferable for the common European supervision and the common European resolution to start roughly at the same time,” Asmussen said. EMERGING FROM CRISIS Asmussen said Germany’s international partners recognized the euro zone has made progress on emerging from the crisis. Spain was set to complete its bailout program by the end of the year and probably Ireland as well, he said. If Greece was not able to regain sufficient market access by the second half of next year, additional aid would be needed, as agreed in November last year, Asmussen said. He reiterated that the ECB’s Outright Monetary Transactions (OMT) bond purchase program was still ready to be activated once the necessary preconditions were met – which was currently not the case for Italy. “I would also like to point out that the OMT program aims to counter unjustified fears about a breakup of the euro zone, rather than justified concerns about the functional capability of a political system,” Asmussen said. Italy’s main problem was low growth potential and Asmussen urged Italy to continue with its budget consolidation.