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Eurozone Suspends Short-Term Debt Relief for Greece Amid Growing Friction

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  • Eurozone Suspends Short-Term Debt Relief for Greece Amid Growing Friction

Greece’s European creditors suspended proposed debt-relief measures for the country after the Greek government surprised them by announcing it would boost welfare benefits for low-income pensioners, a sign of escalating tensions over the country’s bailout.

The moves come as Athens and its international creditors—which include the eurozone and the International Monetary Fund—are struggling to conclude their latest review of the country’s rescue plan of as much as €86 billion ($92 billion) in loans.

“The institutions have concluded that the actions of the Greek government appear to not be in line with our agreements,” a spokesman for Jeroen Dijsselbloem, the Dutch finance minister who presides over the group of his eurozone counterparts, said in a statement on Twitter.

“No unanimity now for implementing short-term debt measures,” he added.

The step puts further pressure on Greece’s government, which is considering calling snap elections in 2017 as it grapples with slumping popularity and is losing hope of winning concessions on deeper debt relief or austerity from the eurozone and the IMF.

Greece’s embattled Prime Minister Alexis Tsipras surprised Greeks and the country’s creditors last week with handouts that his government hadn’t previously discussed with bailout supervisors, which represent eurozone governments and the IMF.

Mr. Tsipras promised 1.6 million pensioners a Christmas bonus of between €300 and €800. He also suspended a planned increase in sales tax for Aegean islands that have received large numbers of refugees from the Middle East and elsewhere.

Eurozone officials expressed frustration that the country’s creditors were not told in advance by Greece of its plans—widely seen as a lure to voters ahead of elections—and said the new measures would have to be assessed to determine whether they were in line with the country’s bailout commitments.

“We will adhere to the [bailout] program to the letter, but whatever outperformance in revenue arises by following to the program, we will not ask anyone in order to give this money to those most in need,” Mr. Tsipras said Tuesday from the small island of Nisyros.

He stressed that the Greek government wouldn’t ask for permission to support those in need and spoke of “fool technocrats…who can’t even get their numbers right.”

Greece registered a primary budget surplus of €7.4 billion in the year to November, data from the finance ministry showed Wednesday, beating its target by nearly €4 billion because of lower spending and higher revenues.

Greek officials resumed talks with officials representing the country’s creditors earlier this week. The two sides remain apart on key overhauls, including a revamping of the labor market, as well as on further austerity aimed at reaching the country’s primary surplus target—its budget balance excluding interest payments—from 2018 onward.

But eurozone officials cautioned that the recent escalation would likely lead to further delays in the negotiations, which are already expected to go into the new year.

The situation has been further complicated by disagreements among Greece’s creditors over the level of the surplus that Greece must sustain and the economic overhauls it should be required to undertake.

The IMF has pressed Europe to reduce Greece’s budget target to a primary surplus of 1.5% of gross domestic product, instead of the current goal of 3.5%. But European governments, led by Germany, are unwilling to agree, partly because Greece would then need even more debt relief.

This month, eurozone finance ministers agreed on a package of debt-relief measures to be implemented in the short term that could ease the country’s debt load by around a fifth by 2060.

Germany’s finance ministry criticized Greece for the unexpected new spending earlier on Wednesday, indicating that it supported putting the agreed-upon debt relief on hold.

“In order to turn the bailout program into a success, it is imperative that measures should not be unilaterally decided or reversed without notice,” the ministry said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial market.

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Nigeria to Become Leading Gold Producer in West Africa – Adegbite

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Adegbite Says Nigeria to Become Gold Hub in West Africa

The Minister of Mines and Steel Development, Olamilekan Adegbite, has said Nigeria is on its way to becoming a leading gold producer in West Africa.

Adegbite made the statement in Abuja while taking stock of his first year in office as minister.

He said, “Indeed, the international roadshows we have had in the past have produced fruits. Today, we have Thor exploration in Osun State through the Segilola Gold project.

“The exploration firm is projected to start producing (gold) in the first half of next year. The project is expected to create about 400 direct jobs and 1,000 indirect jobs.”

According to Adegbite, the Federal Government has licensed two gold refineries that would refine in line with the London Bullion Market Association standard.

He added, “Numerous industries will spring up when our gold economy becomes full-fledged. Some of them will include equipment leasing and repairs, logistics and transport, as gold requires a specialised means of transport, security, insurance, aggregators, and so on.”

The minister noted that for the first time, the country had mined, processed and refined gold under the Presidential Artisanal Gold Mining Development Initiative for use as part of Nigeria’s external reserves.

Adegbite also stated that the mines ministry had initiated a process that would lead to local capacity development in the production of barite.

“Presently, the barite that is used in the oil and gas industry is imported. But we are resolved to reverse this trend. As you may know, barite is a critical weighting material in drilling fluids due to its high specific gravity,” he said.

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NUPENG, Lagos State Agree to Call Off Strike

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NUPENG Agrees With Lagos State, Call Off Strike

The Nigeria Union of Petroleum and Gas (NUPENG) has ordered Lagos State Petroleum Tanker Drivers (PTDs) to call off its ongoing strike.

This was disclosed in a joint communique signed by the Lagos Commissioner of Energy and Mineral Resources, Olalere Odusote, and the NUPENG Deputy National President, Solomon Kilanko.

It would be recalled that Investors King had reported that NUPENG directed all PTDs to withdraw their services from Lagos State effective from Monday 10 August 2020 because of the persistent extortions and harassments of PTDs by both uniform security agencies and touts.

However, on the 10th of August, the commencement day of the strike, Lagos State government met with the leadership of NUPENG to address the union concerns and eventually agreed on a way forward.

Part of the communique reads “The Lagos State Government met today with the representatives of NUPENG, which agreed to call off its strike immediately.

“Other decisions taken at the meeting are security – the state government will meet the heads of all security agencies and secure their commitment to ensure the free passage of petroleum products vehicles given their importance to the economy.”

“Area boys’ – the menace of ‘area boys’ will be handled by relevant government agencies and a dedicated phone number will be established, within the next week to ensure the petroleum products transporters have prompt access to security agencies.”

The communique also stated that the Lagos State government will set up a standing committee to communicate with the union on an ongoing basis, saying it will help address a similar issue going forward.  See the complete communique below.

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Crude Oil Expands Gain on US Stimulus talks, Better Than Expected Chinese Factory Data

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Crude Oil Gains on US Stimulus, Better Than Expected Chinese Factory Data

Oil prices extended its gains on Tuesday following a better than expected factory data from China and a possible agreement between Democrats and Republicans on economic stimulus.

“The oil complex is heavily reliant on that aid. We need people to be able to boost economic activity to spur demand,” said John Kilduff, partner at Again Capital in New York.

President Trump on Monday said House Speaker, Nancy Pelosi and Senator Chuck Schumer, top Democrat in the chamber of Congress, wanted to meet him to discuss or make a deal on coronavirus-related economic stimulus.

The possibility of a stimulus deal, coupled with a reduction in China’s factory deflation in the month of July due to the surge in oil prices and improved industrial activity bolstered the outlook of the energy sector.

China is the world’s largest importer of crude oil. Therefore, improved factory activity generally boosts the oil market.

Also, the announcement from Iraq that it planned to cut an additional 400,000 barrels per day in August and September to compensate for its previous overproduction above OPEC+ quota aided the oil market this week.

“This would send out a strong signal to the oil market on various levels. That said, this would also require the international companies operating in Iraq to join in with the cuts,” Commerzbank analyst Eugen Weinberg said.

The Brent crude oil, against which Nigerian oil is priced, expanded from $41.30 per barrel it traded on Monday to $45.40 per barrel on Tuesday at 10:10 am Nigerian time.

UKOilDaily 1While the U.S West Texas Intermediate crude oil rose from $41.48 per barrel to $42.47 per barrel on Tuesday.

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