NATO to discuss Open Skies treaty after U.S. announces withdrawal

BRUSSELS (Reuters) – NATO envoys will discuss the future of the Open Skies treaty on Friday after the United States announced it would quit the 35-nation pact that allows unarmed surveillance flights over member countries, an official of the defence alliance said.

Senior officials in President Donald Trump’s administration, which says Russia has repeatedly violated the treaty’s terms, said on Thursday that Washington would formally pull out of Open Skies in six months.

The U.S. move deepens doubts about whether Washington will seek to extend the 2010 New START accord, which imposes the last remaining limits on U.S. and Russian deployments of strategic nuclear arms to no more than 1,550 each. It expires in February.

U.S. allies in the North Atlantic Treaty Organization (NATO) have pressed Washington not to leave the Open Skies pact, whose unarmed overflights are aimed at bolstering confidence and providing members forewarning of surprise military attacks.

The NATO official recalled concern raised at a 2018 summit of alliance leaders that “Russia’s selective implementation” of Open Skies was undermining their security.

“In particular, we are concerned that Russia has restricted flights over certain areas,” the official said. “Allies continue to consult closely on the future of the treaty and the North Atlantic Council will meet today to discuss the issue.”

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Pandemic slams Asia's factories, activity hits financial-crisis lows

SYDNEY (Reuters) – Asia’s factory activity was ravaged in April, business surveys showed on Monday, and the outlook dimmed further as government restrictions on movement to contain the coronavirus outbreak froze global production and slashed demand.

A series of Purchasing Managers’ Indexes (PMIs) from IHS Markit fell deeper into contraction from March, with some diving to all-time lows and others hitting levels last seen during the 2008-2009 global financial crisis.

Similar gauges out of Europe’s largest economies due on Monday and later in the week are also expected to show dire global industry conditions.

The PMI for South Korea, Asia’s fourth-largest economy and a global manufacturing powerhouse, skidded to 41.6 in April, the lowest reading since January 2009. Japan’s PMI released last week similarly fell to an 11-year low.

“The bad news is that the hit to industry in many places is unlikely to be passed the worst,” Alex Holmes, Asia Economist at Capital Economics, wrote in a note.

“Global demand has slumped and we don’t think it has bottomed out yet. The latest incoming data for the U.S. and Western Europe point to an unprecedented slump in demand. And while China’s economy has started to recover, demand there remains very weak.”

Last week, China’s official PMI showed factory activity still growing in April, albeit more slowly than March, while the private-sector Caixin PMI showed a dip into contraction, although at a much gentler pace than the rest of the world. Significantly, exporters in both surveys were jolted by steep falls in orders.

While China appears to be ahead of others in emerging from the economic paralysis inflicted by the pandemic, any recovery is expected to be gradual and unlikely to fire up an immediate resurgence in global demand.

The PMI for Taiwan, a major producer of high-end technology components, fell to 42.2, its lowest since 2009 and down from an expansionary 50.4 in March.

The declines in South Korea’s and Taiwan’s PMIs showed contractions that were less severe than those seen in other economies in the region, with indicators in Malaysia, Indonesia and Vietnam all reporting plunges to record lows.

Capital Economics’ Holmes said while South Korea and Taiwan held up better than their Southeast Asian counterparts, thanks mostly to effective government policies to contain the virus, conditions have nonetheless worsened.

Official data released last week showed the coronavirus sent South Korean exports plunging in April at their sharpest pace since the global financial crisis.

South Korean tech giant Samsung Electronics Co Ltd (005930.KS) last week said it expected profits to decline in the current quarter due to a slump in sales.

It said that while work-from-home orders and growth in online learning would underpin demand for memory chips, the outlook for smartphones and TVs was bleak as consumers put off discretionary spending.

The production slump is of particular concern to policymakers, who are worried about the socially destabilising effects of massive unemployment as firms in both factory and service sectors slash headcount.

A private-sector survey in Australia on Monday showed job advertisements plunging a record 53.1% in April, a decline that was almost five times larger than the previous record of 11.3% in January 2009.

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Canada offers C$2.5 billion in aid for hard-hit energy sector, death toll hits 1,250

OTTAWA (Reuters) – Canada will invest around C$2.5 billion ($1.8 billion) in measures to help the hard-hit oil and gas industry survive during the nation’s coronavirus outbreak that has killed 1,250 people, Prime Minister Justin Trudeau said on Friday.

The sector, which accounts for 10.6% of Canada’s gross domestic product, has urged Ottawa to free up credit and cash to help tackle the pandemic and rock-bottom oil prices.

Trudeau, saying energy sector workers faced “layers of calamity,” said Ottawa would invest C$1.7 billion to help clean up orphan and abandoned oil and gas wells in three provinces.

“Our goal is to create immediate jobs in these provinces while helping companies avoid bankruptcy and supporting our environmental targets,” he told a daily briefing, saying the measures would maintain around 10,000 jobs.

Ottawa is also setting up a C$750 million fund to provide repayable loans to companies so they can cut emissions of gases such as methane and help Canada meet its climate targets.

Alberta Premier Jason Kenney, who last week said the province’s energy sector needed up to C$30 billion in liquidity, thanked Trudeau for the aid.

Trudeau said Ottawa was working with the Business Development Bank of Canada and Export Development Canada to expand credit support for at-risk medium-sized energy firms.

Officials would study the energy industry and see whether more help was needed, he added.

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Finance Minister Bill Morneau told a separate briefing that companies were not interested in Ottawa taking an equity stake.

Meanwhile, environmental advocacy group Greenpeace Canada said the announcements would provide “much-needed jobs while cleaning up some of the oil industry’s existing mess.”

Funding to clean up orphan or inactive wells is welcome news for farmers who rent parts of their land to oil companies, said Todd Plandowski, owner of a company that negotiates lease agreements for farmers.

“Some are concerned about gas leaks. They’re concerned about farming around these things,” he said by phone.

Ottawa has unveiled around C$115 billion ($82.08 billion) in direct spending to help companies and individuals deal with shutdowns designed to fight the health crisis. Officials said on Friday Canada’s death toll had hit 1,250, up from 1,048 on Thursday.

Many of the 30,670 confirmed coronavirus cases have been recorded in seniors residences. Trudeau said 125 troops with medical experience would be sent to help staff in long-term care homes in the province of Quebec.

Trudeau also said Ottawa would give C$962 million to regional development agencies to help small businesses and invest C$500 million to support arts, culture and sports.

The shutdowns will extend to the July 1 Canada Day celebrations on Parliament Hill in Ottawa, which usually attract around 10,000 people, officials said.

Morneau, asked about promised aid packages for the airline and tourism sectors, said more needed to be done to ensure large businesses had access to credit and promised details soon.

Finance ministry officials told unions representing airline workers on Wednesday they are mulling whether to provide low-interest repayable loans to companies, according to two sources familiar with the matter.

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Poland pushes forward postal election legislation

WARSAW (Reuters) – Poland’s lower house of parliament controlled by ruling nationalists approved late on Monday draft legislation to allow a May presidential election to be held as a postal ballot due to the coronavirus, state news agency PAP said.

The Law and Justice (PiS) party has said the election should go ahead despite the rising death toll from the highly contagious respiratory disease and has proposed replacing polling stations with mail-in ballots.

Critics accuse the governing party of sacrificing public health on the altar of securing the re-election of incumbent Andrzej Duda, its ally, who is ahead in the opinion polls as the public health crisis consolidates voter support for the authorities.

Parliament had initially voted to bar the PiS plan from its legislative agenda after several deputies from a broad conservative alliance that backs the nationalists in the legislature broke away.

But the PiS secured a majority late on Monday to approve the postal election bill. In favour were 230 lawmakers, 226 were against, while two abstained, PAP said.

The draft legislation will now be sent to the upper house of parliament, the opposition-controlled Senate, which has the power to delay it. But any veto can be overruled by the lower house, the Sejm.

Poland has reported a total of 4,413 cases of the coronavirus and 107 deaths, and expects the number of infections to peak in May or June. The election is scheduled for May 10 and could spill into a run-off vote on May 24.

Winning the presidential election would enable PiS to cement its reforms of the judiciary which the European Union has said are anti-democratic and subvert the rule of law. Any president hostile towards the government could block its efforts.

PiS rejects any accusations about its motivations in the election row, saying it wants to preserve democratic procedures.

It won a fresh four-year parliamentary mandate last year, helped by a generous welfare spending programme and strong economic growth. However, a looming recession prompted by the coronavirus crisis could damage public support for PiS.

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Regina police charge man with arson following structure fire

The Regina Police Service says it arrested a 33-year-old man for arson following reports of a structure fire on the Highway Service Road near Lewvan Drive on Monday morning.

Police said the incident was reported shortly before 1:30 a.m. Early reports indicated that a building was on fire and a man was seen walking away.

Brian Robert Moncrieff of Edmonton was located nearby, police said. He was found with burns to his body and was taken to hospital by EMS.

Moncrieff is charged with arson causing damage to property and scheduled to appear in provincial court on Sept. 9.

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