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Spain to Guarantee Catalonia Creditor Payments After Referendum

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Catalonia
  • Spain to Guarantee Catalonia Creditor Payments After Referendum

Lenders who may be holding their breath over Spain’s secessionist upheaval can sleep calmly.

The central government will guarantee payment to all creditors of the Catalan regional administration, according to a Budget Ministry official. Regardless of Catalan separatists’ attempts to hold an illegal referendum for independence on Sunday and possibly declare independence from Spain, the ministry will make sure banks, suppliers and civil servants keep getting paid on time, the official said.

The assurance is important to keep Spain’s largest regional economy running smoothly while it services its more than 75 billion euros ($88 billion) in debt. Continuity is crucial to the major rating companies, because Spain ultimately guarantees the debt of all of its 17 regions. On Friday, S&P Global Ratings is due to consider its sovereign rating.

The Catalan government that’s seeking its own sovereignty oversees an economy comprising one-fifth of the nation’s total output. It has given itself a 48-hour deadline to declare a republic if a “Yes” vote wins on Sunday, although regional officials have given somewhat contradictory statements on the threat over the past few days.

Disputes over taxes and debt lie close to the heart of the years-long tussle between Catalan separatists, based in the semi-autonomous region governed from Barcelona, and the central government in Madrid, 315 miles away in the country’s heartland.

This month the national Budget Ministry took control of payments away from Catalan authorities after they stopped providing weekly spending reports. The move makes it easier for Madrid to stop public money from being used for a vote that’s been ruled unconstitutional.

Despite the budget intervention, Catalan authorities in fact are cooperating with authorities in Madrid to ensure all legitimate payments are made, the ministry official said Thursday. The exceptional controls will stay in place for as long as the Catalan administration continues to defy the law, the official added.

The Catalan’s own tax agency in Barcelona this year asked to become an intermediary between local taxpayers and the central government tax authority, promising to reimburse taxpayers for any fines incurred if the money wasn’t duly forwarded to Madrid.

Should any of those tax payments be withheld, the central authority will go after those taxpayers directly, the ministry official said.

Despite the political turbulence, markets have taken calm view. The yield spread between Spain’s 10-year benchmark bonds over similarly dated bunds was at 115 basis points on Friday at 11:20 in London, compared with its six-month average close of 118 basis points, as the nation extends a four-year economic recovery, and the European Central Bank buys more than 5 billion euros of Spanish public debt each month under a stimulus program.

The suggestion of renegotiating or walking away from debt is not new to the separatist debate. It emerged again this month when the region’s Parliament passed a law that said a newly independent Catalonia’s economic and financial obligations will be set by “the terms that are agreed” with the nation it’s leaving, rather than offering a guarantee of full payment.

That Sept. 8 law, which is a road-map for transition to a republic, was quickly suspended by the high court.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Netanyahu Stands Firm as US Halts Bomb Shipment Over Rafah Invasion Warning

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Amidst escalating tensions between Israel and the United States, Israeli Prime Minister Benjamin Netanyahu has adopted a defiant stance following the US decision to halt a shipment of bombs and warned against Israel’s potential invasion of the southern Gaza city of Rafah.

In a bold statement, Netanyahu declared, “If we have to stand alone, we will stand alone,” emphasizing Israel’s resolve to pursue its objectives despite opposition.

The Prime Minister’s comments, delivered via social media and a subsequent interview with American talk show host Dr. Phil, underscore Israel’s determination to address security threats posed by the Gaza Strip, particularly by Hamas militants operating in Rafah.

Netanyahu reiterated the necessity of military action in Rafah to eliminate the remaining Hamas battalions, condemned Hamas’s history of violence and reiterated Israel’s commitment to achieving victory and ensuring the safety of its citizens.

The US administration, led by President Joe Biden, expressed concerns over the potential humanitarian impact of an Israeli invasion of Rafah, prompting the decision to withhold additional offensive weapons shipments to Israel.

Biden’s statement echoed broader international apprehensions about the escalation of violence and civilian casualties in the conflict-stricken region.

However, Netanyahu remained resolute in Israel’s approach, asserting the country’s right to defend itself against security threats. He emphasized Israel’s efforts to minimize civilian casualties and facilitate the evacuation of civilians from Rafah before any military action.

Despite the US’s decision to pause the bomb shipment, Netanyahu affirmed Israel’s commitment to its longstanding alliance with the US. He acknowledged past disagreements between the two nations but expressed optimism about resolving current tensions through dialogue and cooperation.

In response, White House officials reiterated the US’s support for Israel’s security while urging restraint and emphasizing the need to avoid actions that could exacerbate the humanitarian crisis in Gaza.

The administration clarified that the decision to halt the bomb shipment was aimed at preventing potential civilian casualties in Rafah.

The confrontation between Israel and the US underscores the complexity of navigating regional conflicts and balancing strategic interests. As tensions persist, both nations face the challenge of reconciling their respective security imperatives with broader humanitarian concerns, seeking to avert further escalation while addressing the root causes of the conflict in the Middle East.

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EFCC Declares Former Kogi Governor, Yahaya Bello, Wanted Over N80.2 Billion Money Laundering Allegations

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Yahaya Bello

The Economic and Financial Crimes Commission (EFCC) has escalated its pursuit of justice by declaring former Kogi State Governor, Yahaya Bello, wanted over alleged money laundering amounting to N80.2 billion.

In a first-of-its-kind action, the EFCC announced Bello’s wanted status in connection with the alleged embezzlement of funds during his tenure as governor.

The commission, armed with a 19-count criminal charge, accused Bello and his cohorts of conspiring to launder the hefty sum, which was purportedly diverted from state coffers for personal gain.

The declaration of Bello as a wanted fugitive came after a series of failed attempts by the EFCC to effect his arrest.

Despite an ex-parte order from Justice Emeka Nwite of the Federal High Court, Abuja, mandating the EFCC to apprehend and produce Bello in court for arraignment, the former governor managed to evade capture with the reported assistance of his successor, Governor Usman Ododo.

This latest development shows the challenges faced by law enforcement agencies in holding powerful individuals accountable for their actions.

However, it also demonstrates the unwavering commitment of the EFCC to uphold the rule of law and ensure that justice is served, irrespective of the status or influence of the accused.

In response to the EFCC’s declaration, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, issued a stern warning to Bello, stating that fleeing from the law would not resolve the allegations against him.

Fagbemi urged Bello to honor the EFCC’s invitation and cooperate with the investigation process, saying it is important to uphold the rule of law and respect the authority of law enforcement agencies.

The EFCC’s pursuit of Bello underscores the agency’s mandate to combat corruption and financial crimes, sending a strong message that individuals implicated in corrupt practices will be held accountable for their actions.

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Concerns Mount Over Security as National Identity Card Issuance Shifts to Banks

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NIMC enrolment

Amidst the National Identity Management Commission’s (NIMC) recent announcement that the issuance of the proposed new national identity card will be facilitated through applicants’ respective banks, concerns are escalating regarding the security implications of involving financial institutions in the distribution process.

The federal government, in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-bank Settlement System (NIBSS), introduced a new identity card with payment functionality, aimed at streamlining access to social and financial services.

However, the decision to utilize banks as distribution channels has sparked apprehension among industry stakeholders.

Mr. Kayode Adegoke, Head of Corporate Communications at NIMC, clarified that applicants would request the card by providing their National Identification Number (NIN) through various channels, including online portals, NIMC offices, or their respective banks.

Adegoke emphasized that the new National ID Card would serve as a single, multipurpose card, encompassing payment functionality, government services, and travel documentation.

Despite NIMC’s assurances, concerns have been raised regarding the necessity and security implications of introducing a new identity card system when an operational one already exists.

Chief Deolu Ogunbanjo, President of the National Association of Telecoms Subscribers, questioned the rationale behind the new General Multipurpose Card (GMPC), citing NIMC’s existing mandate to issue such cards under Act No. 23 of 2007.

Ogunbanjo highlighted the successful implementation of MobileID by NIMC, which has provided identity verification for over 15 million individuals.

He expressed apprehension about integrating the new ID card with existing MobileID systems and raised concerns about data privacy and unauthorized duplication of ID cards.

Moreover, stakeholders are seeking clarification on the responsibilities for card blocking, replacement, and delivery in case of loss or theft, given the involvement of multiple parties, including banks, in the issuance process.

The shift towards utilizing banks for identity card issuance raises fundamental questions about data security, privacy, and the integrity of the identification process.

With financial institutions playing a pivotal role in distributing sensitive government documents, there are valid concerns about potential vulnerabilities and risks associated with this approach.

As the debate surrounding the security implications of the new national identity card continues to intensify, stakeholders are calling for greater transparency, accountability, and collaboration between government agencies and financial institutions to address these concerns effectively.

The paramount importance of safeguarding citizens’ personal information and ensuring the integrity of the identity verification process cannot be overstated, especially in an era of increasing digital interconnectedness and heightened cybersecurity threats.

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