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Merkel, Hollande Call for EU Unity Amid New Worries

The European Union’s two most influential leaders called for unity in championing European values and the European project during a Berlin meeting overshadowed by concerns about the new Trump administration and rising populism at home.

“We need a clear, common commitment to the European Union, to what we have accomplished and to the values of our liberal, democratic democracies,” German Chancellor Angela Merkel said in a brief statement to the press alongside French President Francois Hollande.

Coming a week before the EU’s first summit of the year in Malta, the meeting aimed to set the tone for the 27-member bloc. Yet it was overshadowed by another key meeting across the Atlantic, as Prime Minister Teresa May of exiting EU member Britain talked with U.S. President Donald Trump.

In remarks, Trump has suggested a sharp break with the EU on issues ranging from maintaining sanctions on Russia and upholding the Iran nuclear agreement to climate change, free trade and NATO’s viability.

Trump’s support of Brexit, and recent predictions of the demise of the euro currency by Ted Malloch – reported to be the likely next U.S. ambassador to the EU – have not helped matters.

Describing the new U.S. administration Friday as posing “challenges,” Hollande said it was important to speak to Trump “with a European point of view and promote our interests and values.”

“They are very much concerned that the new President Trump will try to split the Europeans on some key policy issues,” said Daniel Gros, director of the Brussels-based Center for European Policy Studies. “I think it’s extremely important for Merkel to have a unified European response to anything the Americans might undertake – and that can only start with a Franco-German agreement.”

Internal threats

The two leaders also warned of internal threats to Europe, with the rise of populist anti-EU parties across the region. Both their countries face key elections this year, with the upcoming presidential and legislative vote in France particularly closely watched.

President Hollande, who has taken a tough line against Syria and Moscow, is not running for re-election, judged too unpopular to win.

By contrast, two of the top candidates to replace him – conservative former prime minister Francois Fillon and far-right contender Marine Le Pen – want to end sanctions against Russia and work with Damascus in fighting the Islamic State group, positions that may align them closer to Washington if either becomes leader, than to Brussels.

Speaking after his own meeting with Merkel on Monday, Fillon said sanctions against Moscow were ineffective, and “we must find another way to talk.”

For her part, Le Pen is a strong supporter of Trump, seeing his unexpected victory last November as a harbinger of her own. During a meeting with other far-right European parties in Germany last week, she called on European voters to “wake up” and follow the example of their British and American counterparts.

Still, analyst Gros believes that, on the whole, the U.S. president is proving a galvanizing force, bringing the EU – which is sharply divided over issues like immigration – closer in opposition.

“There is a sense of ‘all united’ in a European view of the world, which is different in its view than that of Trump,” he said. “It’s a long-term partnership based on common values.”

Closer EU defense and security cooperation seems to be the first target, in the wake of new doubts over the U.S. commitment to NATO. The first lines were traced during an end-of-year summit last December and Merkel has been pushing since.

“The more Trump insists, the more he tries to divide the Europeans, the stronger will be the call for stronger military capacity,” Gros said. “It’s actually in the making. But it’s nothing that you decide in a week or two. It will take years.”

Still Friday’s meeting between Trump and Britain’s Theresa May – his first with a foreign leader since taking office – offers an unsettling counterpoint.

“It will be a strategic choice for May, whether to cozy up with Trump,” Gros said. “She will have to weigh the U.K.’s long-term interests, since we never know if Trump will stick to a particular policy and how long he might last himself.”

The upcoming Brexit negotiations will also give the EU some bargaining power, he believes, as Britain looks to access the bloc's single market after leaving.

“If she breaks ranks with Europe on some high policy issues,” Gros said, “then the trade deal available to her will be a lot less favorable.”

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Leaders Warn of Rising Xenophobia on Holocaust Remembrance Day

Jewish and Christian leaders prayed over the ruins of gas chambers at Auschwitz-Birkenau as some leaders warned Friday on International Holocaust Remembrance Day of rising xenophobic hatred against Jews and others, including Muslims.

Dozens of survivors gathered with political leaders and representatives of Poland's Jewish community at the site where Germany murdered about 1.1 million people during World War II, mostly Jews from across Europe, but also Poles, Roma, Soviet prisoners of war and others.

Poland's Prime Minister Beata Szydlo, who is from the Polish town where the Auschwitz memorial and museum is located, recalled the “destruction of humanity” and the “ocean of lost lives and hopes” in Oswiecim.

“It's an open wound that may close sometimes but it shall never be fully healed and it must not be forgotten,” she said.

Dozens of Auschwitz survivors began a day of commemorations by placing wreaths and flowers at the infamous execution wall on the 72nd anniversary of the camp's liberation by Soviet soldiers. The United Nations recognized January 27 as International Holocaust Remembrance Day in 2005, and many commemorative events were taking place across the world on Friday.

“Tragically, and contrary to our resolve, anti-Semitism continues to thrive,” U.N. Secretary-General Antonio Guterres said in statement made in New York Thursday, and which was read out at the U.N. headquarters in Geneva on Friday. “We are also seeing a deeply troubling rise in extremism, xenophobia, racism and anti-Muslim hatred. Irrationality and intolerance are back.”

Guterres vowed to “be in the front line of the battle against anti-Semitism and all other forms of hatred.”

In Germany, outgoing Foreign Minister Frank-Walter Steinmeier said his nation sticks by its obligation to take responsibility for the crimes committed by the Nazi regime of Adolf Hiltler.

Noting the political instability in the world today, Steinmeier said, “History should be a lesson, warning and incentive all at the same time. There can and should be no end to remembrance.”

Steinmeier's statement came hours before he was due to hand over the post of foreign minister to the current economy minister, Sigmar Gabriel.

In Croatia, the Jewish community boycotted official commemorations, saying the country's conservative government is not doing enough to curb pro-Nazi sentiments there.

Community leader Ognjen Kraus, the coordinator of the Jewish communities in Croatia, said the decision was made after authorities failed to remove a plaque bearing a World War II Croatian pro-Nazi salute from the town of Jasenovac — the site of a wartime death camp where tens of thousands of Jews, Serbs and Roma perished.

Elderly survivors at Auschwitz, which today is a museum and partially preserved memorial, paid homage to those killed by wearing striped scarves to symbolize the uniforms prisoners were given when they arrived at the concentration camp.

They walked slowly beneath the notorious gate with the words “Arbeit Macht Frei” (Work Will Set You Free) and made their way as a group to the execution wall, where they lit candles and prayed.

Janina Malec, a Polish survivor whose parents were killed at the execution wall, described her yearly visit as a “pilgrimage” and told the PAP news agency that “as long as I live I will come here.”

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Turkey, Greece at Odds as Athens Denies Turkish Coup Extradition Request

Turkey has threatened to cancel a migrant readmission deal with Greece after Greece’s Supreme Court rejected a request from Turkey for the extradition of eight senior servicemen who fled the country following the failed coup last July. As Henry Ridgwell reports, Ankara has reacted with fury to the ruling and there are fears that ties between the two neighbors could be severely affected.

World News

Europe Positions Itself as Green Financing Leader

The European Union has moved boldly to assert its leadership in funding the fight against climate change in the face of a skeptical new U.S. administration, even as experts warned some of the efforts should be viewed with caution.

The big news came from France, host of last year’s Paris climate change conference, which, Tuesday, marked a record $7.5 billion sale of its first sovereign green bonds.

Credit Agricole-CIB, one of the banks involved in the effort, described it as “historic,” following a more modest bond launch by Poland.

Also this week, a German bank invested more than $100 million in the green energy transition of Germany’s North Rhine-Westphalia state, underscoring the private sector’s growing role in environmental financing.

“We Europeans must lead the free world against climate skeptics,” said European Investment Bank President Werner Hoyer this week — in what was broadly interpreted as directed at U.S. President Donald Trump, who has vacillated on whether he would seek to pull the United States out of the Paris climate treaty.

The developments coincide with a new report by the European Environment Agency, warning of intensified droughts, floods and storms in Europe as a result of climate change. The agency also said sea levels were rising faster.

Green bonds

As Europe looks for new options to finance the fight against climate change, the French bond issue has drawn praise from environmental groups and experts.

“What this market needs is critical mass,” said Jochen Krimphoff, an expert on green financing for WWF International, adding the French “are becoming a very important player in the world market.”

“I think it’s a very good signal from the French government in order to finance the transition to a low carbon economy,” said Romain Pardo, an analyst on green issues for the Brussels-based European Policy Center.

First issued by multilateral development banks in 2007, green bonds are used exclusively to finance or refinance projects in areas like renewable energy and sustainable development. The private sector has since come on board, with Chinese companies by far the biggest players to date.

Now countries are beginning to issue green bonds, whose growth soared 90 percent last year, according to Bloomberg New Energy Finance. Poland led the way in December, selling sovereign green bonds valued at more than $800 million.

Nigeria is expected to follow suit in March, underscoring a new surge in green financing in developing countries. Other countries, including Sweden and China, are reportedly mulling similar moves.

Today, the EU is upbeat about the bonds’ potential, estimating in a recent study they could help finance the billions needed for projects to meet the bloc’s climate fighting commitments.

“The EU has positioned itself well, to allow companies and municipalities to be among the front-runners in the expanding green bond market,” European Environment Commissioner Karmenu Vella said last month.

Risks

Experts point to weaknesses, including the lack of common standards in the global green bond market. China, for example, has issued bonds that fall short of investors’ expectations in areas like transparency, WWF’s Krimphoff said.

Without international guidelines and standards, “there is a risk of greenwashing, should money finance projects that have little added value in terms of environmental protection and climate mitigation and adaptation,” analyst Pardo said.

“Bonds are certainly a low-cost way of raising capital” for green projects, said Michael Waldron, an energy investment analyst at the International Energy Agency in Paris.

But overall, he said, Europe’s problem is “too much financing chasing too few bankable projects.”

In the case of Poland, the state issued green bonds even as it remains heavily reliant on coal, which the IEA said accounted for 81 percent of its electricity generation in 2015.

Poland’s bonds might be a way for the country “to divert from other issues that are linked to climate action,” Pardo said. “It’s a way to show they’re doing something.”

Energy transition

France’s energy transition must also be scrutinized carefully, he added. Three quarters of French electricity comes from nuclear power, a figure the leftist government pledged to cut to 50 percent by 2025 in favor of renewable alternatives.

But the left will likely lose power in elections this year, raising uncertainty about France’s future energy mix.

A preview of possible battles ahead came this week in the case of the country’s aging Fessenheim nuclear power plant. Socialist President Francois Hollande has long promised to close the plant; but only now has the board of the EDF utility running it finally agreed to do so — and not until after the spring presidential vote.

Conservative candidate Francois Fillon, who is leading in the polls, opposes the plant’s closure.

World News

German Prosecutors Widen Volkswagen Emissions Probe

Prosecutors in Germany said Friday they are expanding their probe into Volkswagen's scandal over diesel cars that cheated on emissions tests, increasing the number of suspects and saying they have evidence former Volkswagen CEO Martin Winterkorn may have known of the cheating earlier than he has claimed.

The 69-year-old stepped down in September 2015, days after news emerged in the U.S. of Volkswagen's use of software that turned off emissions controls. He said at the time that he was not aware of any wrongdoing on his part.

He said before a parliamentary committee last week that he first heard the term “defeat device,” the technical name for the illegal software, in September 2015 — even though U.S. authorities had been pressing Volkswagen for months over emissions test discrepancies and the cheating had been going for several years.

Prosecutors in Braunschweig said however that “on the basis of local prosecutorial investigation,” Winterkorn “could have known of the manipulative software earlier than publicly asserted by him.”

In a statement, prosecutors said that they have increased the number of suspects in their investigation of VW from 21 to 37 persons. It said that 28 locations including offices and private homes had been searched in Germany this week.

Winterkorn and others are now being investigated on allegations they committed fraud. In a June statement, prosecutors said Winterkorn was being investigated only for market manipulation for not making a timely disclosure of the possible financial consequences of the problem.

U.S. prosecutors have separately charged seven former Volkswagen employees. The company has agreed to pay $4.3 billion in fines to settle criminal charges and reached a $15 billion civil settlement in the U.S. with environmental authorities and car owners.

The software enabled the car to detect when it was on the test stand and turn on emission controls, and then to turn them off during normal driving.

World News

British Finance Minister: England Mindful of its Obligations to EU

Britain will continue to fulfill its obligation to the European Union while it seeks to strengthen trade ties with world partners, the British finance minister said.

Philip Hammond spoke to reporters Friday in Brussels, where EU finance ministers are gathering for the regular Economic and Financial Affairs Council (ECOFIN) meeting.

“Britain remains a fully engaged member of the European Union (EU) and I am here today for discussions with my finance minister colleagues,” said Hammond. “We will continue to take a full part. We will continue to abide by the rules, and the regulations, and the laws of the European Union for so long as we are members.”

Earlier this month, Hammond said the government could cut taxes to stay competitive as international banks have moved to transfer some of their London operations to the continent out of fear Britain would lose access to the EU's single market as a result of Brexit.

In June 2016, Britain voted to leave the EU, but it is expected to launch two years of exit negotiations in late March and will remain a bloc member until the process is completed.

Hammond’s comments came hours before British Prime Minister Theresa May will meet with U.S. President Donald Trump in Washington to begin drawing up a free trade deal linking the countries after Britain leaves the EU.

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