Report: Russia Has Access to UK Visa Processing

Investigative group Bellingcat and Russian website The Insider are suggesting that Russian intelligence has infiltrated the computer infrastructure of a company that processes British visa applications.

The investigation, published Friday, aims to show how two suspected Russian military intelligence agents, who have been charged with poisoning a former Russian spy in the English city of Salisbury, may have obtained British visas.

The Insider and Bellingcat said they interviewed the former chief technical officer of a company that processes visa applications for several consulates in Moscow, including that of Britain.

The man, who fled Russia last year and applied for asylum in the United States, said he had been coerced to work with agents of the main Russian intelligence agency FSB, who revealed to him that they had access to the British visa center’s CCTV cameras and had a diagram of the center’s computer network. The two outlets say they have obtained the man’s deposition to the U.S. authorities but have decided against publishing the man’s name, for his own safety.

The Insider and Bellingcat, however, did not demonstrate a clear link between the alleged efforts of Russian intelligence to penetrate the visa processing system and Alexander Mishkin and Anatoly Chepiga, who have been charged with poisoning Sergei Skripal in Salisbury in March this year.

The man also said that FSB officers told him in spring 2016 that they were going to send two people to Britain and asked for his assistance with the visa applications. The timing points to the first reported trip to Britain of the two men, who traveled under the names of Alexander Petrov and Anatoly Boshirov. The man, however, said he told the FSB that there was no way he could influence the decision-making on visa applications.

The man said he was coerced to sign an agreement to collaborate with the FSB after one of its officers threatened to jail his mother, and was asked to create a “backdoor” to the computer network. He said he sabotaged those efforts before he fled Russia in early 2017.

In September, British intelligence released surveillance images of the agents of Russian military intelligence GRU accused of the March nerve agent attack on double agent Skripal and his daughter in Salisbury. Bellingcat and The Insider quickly exposed the agents’ real names and the media, including The Associated Press, were able to corroborate their real identities.

The visa application processing company, TLSContact, and the British Home Office were not immediately available for comment.

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Turkey Rejects Saudi Claim on Khashoggi’s Killing

Turkey has dismissed Saudi Arabia’s latest version of events in the October 2 killing of Saudi journalist Jamal Khashoggi at its consulate in Istanbul.

Saudi authorities announced this week 11 people are being charged with the writer’s killing and that the death penalty is sought for five. The country’s deputy public prosecutor alleged Khashoggi was killed in a  rogue operation that went wrong when a fight broke out as he was being injected with a drug and tied up.

“I have to say that I did not find some of the [Saudi] statements satisfactory,” said Turkish Foreign Minister Mevlut Cavusoglu Thursday.

Cavusoglu went on to repeat Ankara’s claim Khashoggi was the victim of premeditated murder.

Turkey’s political leadership has been at the forefront of challenging Saudi Arabia about the killing, forcing its leadership to repeatedly change its story.

Senior members of Turkey’s ruling AK Party joined hundreds of supporters and friends at an Istanbul mosque on Friday to pray for Khashoggi and vow that justice will be done.

“We are going to be defenders of his cause. What we want is not revenge but justice,” said Yasin Aktay, deputy AK head and friend of Khashoggi, addressing mourners.

“There are 15 people defined as perpetrators [in Khashoggi’s death], but they didn’t make this decision on their own. This is the story being sold to us, and we don’t believe in it,“ he added, criticizing Saudi Arabia’s latest version of Khashoggi’s killing.

Saudi Arabia’s changing story

In the first few days following Khashoggi’s disappearance, Saudi officials maintained that the journalist left the consulate after a visit for marriage documents.

Following sustained pressure by Ankara, through a campaign of leaks to international media of information about the killing, Saudi Arabia finally acknowledged the writer died in the consulate.

On Thursday, columnist Abdulkadir Selvi of Turkey’s Hurriyet newspaper wrote that a 15-minute recording of Khashoggi’s killers undermines Riyadh’s claim the death wasn’t premeditated.

“The Saudi team discusses how to execute Khashoggi. They are reviewing their plan, which was previously prepared, and reminding themselves of the duties of each member,” wrote Selvi, who has close links to Turkey’s president, Recep Tayyip Erdogan.

Turkey has already shared a seven-minute audio recording capturing Khashoggi’s killing with its Western allies and Saudi authorities. Until now, it has been widely assumed the tape was the key piece of evidence held by Turkish investigators. The claim of further recordings is likely to increase pressure on the Saudis and, in particular, Crown Prince Mohammed bin Salman.

Erdogan has repeatedly alluded to the crown prince’s alleged involvement, a charge Riyadh strongly denies. Washington, a key ally of the crown prince, continues to back him publicly. And analysts suggest the US is increasingly looking to Erdogan for a resolution of the diplomatic crisis, given his country’s pivotal role in the death investigation.

“In the Khashoggi case, they have very good communication with Washington, said former senior Turkish diplomat Aydin Selcen, who served in Washington.

This past week, a U.S. media report suggested Washington was looking into the extradition of Turkish cleric Fethullah Gulen in exchange for Ankara’s easing pressure on Riyadh.

Gulen lives in self-imposed exile in the state of Pennsylvania and denies Turkey’s accusation of involvement in a failed Turkish coup in 2016.

Washington denies any deal, but U.S. State Department spokesperson Heather Nauert said Thursday , “We continue to evaluate the material that the Turkish government presents requesting his extradition.”

Gulen’s extradition is a top diplomatic priority for Turkey even as it dismisses any talk of a deal.

“Turkey’s pending request for Fethullah Gulen’s extradition from the United States and the investigation into Khashoggi’s murder are two separate issues. They are not connected in any way, shape or form,” said a senior Turkish official, speaking on condition of anonymity.

“At no point did Turkey offer to hold back on the Khashoggi investigation in return for Fethullah Gulen’s extradition,” he added.

Analysts point out it’s doubtful Washington could make such an offer, given Gulen’s extradition is a matter for the courts, which experts say is a potentially lengthy and challenging process.

Also, analysts say since Erdogan sees the Saudi crown prince as his chief rival in the region, his goals may extend well beyond an extradition.

“We are in a new phase, and there will be more cooperation between the U.S. and Turkey. And this is part of replacing Mohammed bin Salman,” said former Turkish diplomat Selcen.

“What Erdogan wants to harvest from this case of Khashoggi’s murder,” he added, “is to replace Mohammed bin Salman as the pivotal actor, the linchpin of U.S. strategy in the Middle East.”

Some observers suggest while Turkey has so far handled the Khashoggi case with skill, it could be in danger of overreach, given the importance of the U.S.-Saudi relationship.

But they say the U.S. and Saudi Arabia likely will continue to be on the defensive, especially that Turkey, which may well have more incriminating evidence in the case, is now calling for an international investigation.

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Britain’s May Sticks to Brexit Deal as Rebellion Grows

Embattled British Prime Minister Theresa May came out fighting Friday in defense of her contentious draft Brexit deal, calling on the British public to back her. But critics within her party, who complain the proposed agreement would turn Britain into a “vassal state,” mounted a formal bid to oust her.

The proposed deal with the European Union, more than two years after Britons voted in a referendum to exit the bloc, has triggered half-a-dozen ministerial resignations.

It also prompted high drama in the House of Commons, where May received the most hostile reception a sitting prime minister has endured since 1940, when Neville Chamberlain was pushed out of office at the start of the Second World War.

The withdrawal deal has been pronounced “dead on arrival” by lawmakers across the political spectrum. They say the agreement won’t gain parliamentary backing in a planned vote next month. The deal would see Britain remaining in the EU’s customs union, which address imports and exports, for an indefinite period and subject to the bloc’s rules and regulations without having any say about them

May maintained during a radio interview Friday that she has negotiated the best deal possible, despite it crossing many “red lines” she had set previously. May and her loyalists say there is no alternative to the proposed withdrawal agreement that runs to 538 pages and took many months of tortuous negotiations to seal, because the alternatives are even more unpalatable for Britain or impossible to get the EU and its 27 member countries to accept.

May says the draft agreement is just a staging post, a temporary deal that’s in place while Britain negotiates over the next few years a fuller free trade deal with the bloc. Her supporters say it is no time for a change in leadership with just over four months to go before Britain is scheduled to leave the EU, deal or no deal.

“I am not sure any other prime minister could have done any better,” said Simon Hart, a Conservative lawmaker. “I will say one thing for the prime minister — you can never doubt her resilience and stoicism,” he added.

Partial relief

The prime minister got some relief Friday when a senior minister, Michael Gove, who had been rumored to be resigning to protest the draft deal, said he would be staying in the Cabinet.

It remains unclear, however, whether other prominent hardline Brexiters in May’s thinning Cabinet will follow Gove’s cue over the next few weeks and decide against tendering their resignations. So far, several other Brexiters in the Cabinet have indicated they will stay to work together to improve the deal. “Resigning and joining a rebellion is not going to help anything,” said one of their aides.

Whether their resolve will hold is another thing, if the internecine [destructive] rebellion against May gains momentum.

“Then they will have to consider how their choice plays out in any future leadership election they may want to compete in,” said a party official.

And talk of renegotiation is being rebuffed by EU officials, who on Friday cautioned that the agreement is the best they can do and there can be no changes.

“This is a good deal for both sides,” Austrian Chancellor Sebastian Kurz said Friday. “No one was tricked into anything,” said Kurz, whose country holds the EU’s rotating presidency until the end of the year. He warned that the only alternative would be for Britain to leave the EU without any deal, which “would hurt Britain badly.”

Mounting leadership challenges

Gove’s decision not to resign didn’t stop more Conservative lawmakers from lodging formal letters with party authorities calling for a vote of no confidence in May as party leader, the first stage in a leadership challenge.

As May started her effort to sell the deal to the public, John Whittingdale, a Brexiter and former culture secretary, filed his letter, joining more than two dozen other Conservative rebels who have publicly called for her to step aside.

“I believe that the agreement that is being proposed does not deliver Brexit in the way that I and many others want to see. It leaves us locked in indefinitely into the customs union. I also don’t think it can get through the House of Commons,” he wrote.

May’s party critics accuse her of going from her oft-stated position that “no deal is better than a bad deal” to one where she appears to accept “any deal is better than no deal.”

“It is no good trying to pretend that the deal honors the result of the referendum when it is obvious to everyone it doesn’t,” said Esther McVey, who resigned this week as works and pension minister.

Time on May’s side

Whether the deal honors what the majority of Britons voted for in June 2016 may be a moot point, say analysts. In trying to sell a deal that satisfies neither Brexiters, who want a sharp break with the EU, nor Remainers, who say staying as a member of the bloc is the only thing that won’t damage Britain, May, if she can see off the rebellion, has time on her side, they say.

She is banking on securing a majority next month for her deal when parliament is scheduled to vote formally on it, by daring lawmakers across the political spectrum — all the opposition parties have formally come out against the deal — to let a “no-deal Brexit” go ahead, likely triggering a recession and leaving behind it bankrupt businesses and ruined livelihoods.

The fear of quitting the EU without a deal seems to be persuading some lawmakers who dislike the agreement to accept they have no option but to back it.

“The most likely alternative is we leave the EU with no deal at all,” wrote Nicky Morgan, a former Conservative minister, in an article for The Guardian newspaper. “And I believe that would be deeply damaging to our economy and our constituents. I cannot sign up to that.”

Party officials, known as Whips, were mounting a feverish effort Friday to dissuade Conservative lawmakers from insisting on holding a no-confidence vote on May’s leadership. Their biggest fear is that if they are unable to do so before lawmakers head back to their constituencies, where the draft agreement is highly unpopular among grassroots Conservatives, then the prime minister will not be able to avoid a leadership challenge and the rebellion will gather steam, analysts say.

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Ex-Macedonia PM Gruevski Seeking Refugee Status in Hungary

Former Macedonian prime minister Nikola Gruevski sought asylum at a Hungarian representation outside Macedonia before reaching Hungary earlier this week and submitting his formal application for refugee status, Budapest said on Thursday.

Gruevski, who resigned in 2016 after 10 years in power, fled his Balkan homeland six months after being sentenced to two years in prison on corruption-related charges.

Macedonian police issued an arrest warrant for him after he failed to show up to begin his sentence following a Nov. 9 court ruling against his motion for a reprieve.

Gruevski’s refugee status application could put Hungarian Prime Minister Viktor Orban in a tight spot. He supported the fellow nationalist Gruevski in the run-up to Macedonia’s 2017 election and praised his party’s efforts in halting migrants passing through the Balkans northwards towards Western Europe.

A senior Hungarian official declined to say in which country Gruevski had first sought Hungarian asylum or how he later made his way to the Immigration and Asylum Office in Budapest where he submitted documents and secured a hearing.

“According to my knowledge he made a statement regarding threats to his safety … that justified that his hearing should be conducted not in a transit zone but in Budapest,” said Gergely Gulyas, Orban’s cabinet chief.

Speaking to reporters, Gulyas would not say whether the Hungarian government was involved in helping Gruevski get to Budapest or whether he arrived by land or air. He said Hungary played no role in Gruevski’s exit from Macedonia.

Police in Albania, which borders Macedonia, said later on Thursday that Gruevski had crossed Albanian territory into Montenegro to the north on Sunday evening as a passenger in an Hungarian embassy car. It was unclear whether Gruevski then transited Serbia to reach Hungary further north.

Albanian police said Interpol notified them of an arrest warrant for Gruevski only on Tuesday, when the ex-premier announced on his Facebook page that he was in Budapest and seeking asylum.

Gulyas said Budapest had not yet received an official request from Macedonia to extradite Gruevski, adding Hungary would act “in line with the laws” if that happens. He said there was an extradition agreement between the two countries.

Asked if Gruevski was being protected by Hungarian authorities, Gulyas said Budapest had applied “the appropriate security protocol”, and was assured he would not leave the country. Gruevski had not met Orban this week, he added.

On Wednesday, a Fidesz party spokesman said Gruevski was a politician who was being persecuted by Macedonia’s leftist government. Gulyas declined to comment on this.

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Ukraine PM Upbeat on IMF Loan Prospects

Ukrainian Prime Minister Volodymyr Groysman expects to get new loans from the International Monetary Fund as early as December, once parliament passes a budget of stability that refrains from making pre-election populist moves, he said Thursday.

Securing IMF assistance will also unlock loans from the World Bank and the European Union. Groysman also said Ukraine was in negotiations with Washington for a new loan guarantee for sovereign debt.

Groysman negotiated a new deal with the IMF last month aimed at keeping finances on an even keel during a choppy election period next year. The new loans are contingent on his steering an IMF-compliant budget through parliament.

“This budget is a budget of stability and continuation of reforms,” Groysman said in an interview with Reuters. “This is fully consistent with our IMF program.”

“Yes. We are counting on a tranche in December,” he added, when asked about when IMF loans were expected, though he did not elaborate on the possible size of the loan.

Ukraine’s government approved a draft budget in September but it will typically undergo a slew of amendments before parliament finally approves it. 

Tax proposal dropped

Groysman said a proposal to change how companies are taxed — on withdrawn capital, rather than profits — had been dropped from the budget because of the IMF’s concerns.

He also said he would not bow to opposition parties’ demands to reverse a recent increase in household gas tariffs, a step that his government reluctantly took to qualify for more IMF assistance.

“Populism led to the weakness of Ukraine,” he said. “This should not be allowed.” 

The IMF and Kyiv’s foreign allies came to Ukraine’s rescue after it plunged into turmoil following Russia’s annexation of Crimea in 2014 and support for separatist rebels occupying the eastern industrial Donbass region. 

The United States has also sold coal to plug a domestic shortage caused by rebels taking control of mines in the east. U.S. Energy Secretary Rick Perry visited Ukraine this week. 

In response to a question about whether Ukraine would continue to buy coal from the United States and potentially also liquefied natural gas, Groysman said that “liquefied gas is very interesting for Ukraine. We talked about the whole spectrum of our cooperation in the energy sector.”

As for coal, he added, “we will buy it from our international partners until we cover the domestic deficit.” 

Washington has also previously issued loan guarantees for Ukrainian debt. Groysman said another such guarantee was “under discussion.” 

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Business Bosses Alarmed as Resignations Imperil Brexit Deal

Business leaders expressed growing alarm Thursday as a draft Brexit agreement seen as the only chance of preserving some stability in U.K.-EU trading threatened to unravel, sending stock prices and the pound plunging.

Just 12 hours after British Prime Minister Theresa May announced that her cabinet had agreed to the terms of the draft agreement, Brexit minister Dominic Raab and work and pensions minister Esther McVey quit, saying they could not support it.

Their departures and those of other, junior ministers, revived the specter for business of Britain leaving the European Union without a deal next March, and sent shares in British housebuilders, retailers and banks tumbling.

“The political situation remains uncertain,” German carmaker BMW said in a statement. “We must therefore continue to prepare for the worst-case scenario, which is what a no-deal Brexit would represent.

“We continue to call on all sides to work toward a final agreement which maintains the truly frictionless trade on which our international production network is based.”

The European Union is Britain’s biggest trading partner, accounting for 44 percent of U.K. exports and 53 percent of imports to the UK.

After 45 years of membership, industries including defense, cars and aerospace have created intricate supply chains that rely on smooth, “just-in-time” delivery of thousands of parts across the sea that divides Britain from the continent.

Business leaders fear that the country could stumble toward a no-deal Brexit where border checks block ports and fracture the supply chains that support the likes of Rolls-Royce and BAE Systems.

Karen Betts, the head of the Scotch Whisky Association, said a no-deal Brexit would cause “considerable difficulties” for the industry and increase cost and complexity. It accounts for around 20 percent of all U.K. food and drink exports.

‘Only deal in town’

A senior executive at one of Britain’s biggest banks said this was the most disastrous government he had ever seen.

“The rest of the world is looking at us and laughing. It is time to have some stability so business can get some certainty. This is what the country needs.”

Industry bosses who had been briefed on the draft agreement by ministers late Wednesday had broadly welcomed it as the best chance of a compromise that would secure a transition period and avert the chaos of no deal at all.

May’s office also released statements from a number of major companies such as Diageo, the London Stock Exchange and Royal Mail welcoming the draft deal.

“Most business people ultimately are pragmatists and this is about playing the cards we have been dealt rather than wishing for a better hand,” Roger Carr, chairman of BAE Systems, told BBC Radio.

Iain Anderson, executive chairman of public affairs firm Cicero, which represents many finance companies, said although most executives did not like May’s deal they realized it was now the only game in town.

“Business is watching with horror the resignations now taking place,” he said. “Yesterday we had a plan and stability and today we do not.

“There is now no time to negotiate another deal. We thought we had stability — now we have instability writ large.”

The U.K. chief of German industrial group Siemens, which employs 15,000 people in the U.K., reiterated his call to get behind the draft agreement even as senior politicians called for May to quit.

“We hope all sides keep calm, look at the facts, and move to support this draft to provide UK business with greater certainty,” Juergen Maier said in an emailed statement.

Even if May survives, her chances of winning a vote in parliament to approve the draft agreement are seen as slim.

Market jitters

Lawmakers across the political spectrum have said May’s deal will leave Britain bound by EU rules without having any say.

Many have argued it will also damage the integrity of the United Kingdom by aligning Northern Ireland with the rest of the EU in order to avoid a hard border with EU-member Ireland.

Many executives spoken to by Reuters were trying to guess what could happen next, either a national election, a second referendum or the extension of the negotiating period.

One senior executive at a FTSE 100 company was still holding out hope, however, that lawmakers would eventually be persuaded to vote for the deal when it comes before parliament before the end of the year.

“We’re going to need the market to throw up and scare them all into voting for it,” he said. The pound was down 1.8 percent against the dollar in early evening trading.

The CEO of French outdoor advertising company JCDecaux, which runs London’s bus-shelter advertising and makes 10 percent of its sales in Britain, called the situation “obviously very serious.”

“Today’s events reinforce the uncertainties in the market,” Jean-Charles Decaux told Reuters in an interview on the sidelines of an industry conference in Barcelona.

Martin Sorrell, ex-CEO and founder of ad agency group WPP and one of Britain’s best-known businessmen, said the country was in a state. “The situation this morning saps the confidence of the city and the country,” he told Reuters.

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Draft Brexit Deal Ends Britain’s Easy Access to EU Financial Markets 

The United Kingdom and the European Union have agreed on a deal that will give London’s vast financial center only a basic level of access to the bloc’s markets after Brexit. 

The agreement will be based on the EU’s existing system of financial market access known as equivalence — a watered-down relationship that officials in Brussels have said all along is the best arrangement that Britain can expect. 

The EU grants equivalence to many countries and has so far not agreed to Britain’s demands for major concessions such as offering broader access and safeguards on withdrawing access, neither of which is mentioned in the draft deal. 

“It is appalling,” said Graham Bishop, a former banker and consultant who has advised EU institutions on financial services. The draft text “is particularly vague but emphasizes the EU’s ability to take decisions in its own interests. … This is code for the UK being a pure rule taker.” 

Britain’s decision to leave the EU has undermined London’s position as the leading international finance hub. Britain’s financial services sector, the biggest source of its exports and tax revenue, has been struggling to find a way to preserve the existing flow of trading after it leaves the EU. 

Many top bankers fear Brexit will slowly undermine London’s position. Global banks have already reorganized some operations ahead of Britain’s departure from the European Union, due on March 29. 

Currently, inside the EU, banks and insurers in Britain enjoy unfettered access to customers across the bloc in all financial activities. 

No commercial bank lending

Equivalence, however, covers a more limited range of business and excludes major activities such as commercial bank lending. Law firm Hogan Lovells has estimated that equivalence rules cover just a quarter of all EU cross-border financial services business. 

Such an arrangement would give Britain a similar level of access to the EU as major U.S. and Japanese firms, while tying it to many EU finance rules for years to come. 

Many bankers and politicians have been hoping London could secure a preferential deal giving it deep access to the bloc’s markets. 

Under current equivalence rules, access is patchy and can be cut off by the EU within 30 days in some cases. Britain had called for a far longer notice period. 

The draft deal is likely to persuade banks, insurers and asset managers to stick with plans to move some activities to the EU to ensure they maintain access to the bloc’s markets. 

Britain is currently home to the world’s largest number of banks, and about 6 trillion euros ($6.79 trillion) or 37 percent of Europe’s financial assets are managed in the U.K. capital, almost twice the amount of its nearest rival, Paris. 

London also dominates Europe’s 5.2 trillion-euro investment banking industry. 

Rachel Kent, a lawyer at Hogan Lovells who has advised companies on future trading relations with the EU, said the draft deal did not rule out improved equivalence in the future. 

“I don’t see that any doors have been closed,” she said. “It is probably as much as we could hope for at this stage.” 

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Ocean Shock: Portugal Mourns Sardines’ Escape to Cooler Waters 

This is part of “Ocean Shock,” a Reuters series exploring climate change’s impact on sea creatures and the people who depend on them. 

A priest in a white robe swung an incense burner, leading the way for thousands of marchers as they crammed into a winding cobblestone alley decorated with candy-colored streamers in Lisbon’s ancient Alfama neighborhood. 

Behind the priest, six men carried a life-sized statue of St. Anthony, Lisbon’s patron saint, born more than 800 years ago. The musky incense swirled together with the smoke from orange-hot charcoals grilling whole sardines a few streets away. 

The procession moved along, leaving behind just the smell of the sardines. 

In this city, June is the month to celebrate the saints. Almost every neighborhood throws a party, known as an arraial. 

Some are just a scattering of makeshift tables in alleyways. Others cover several blocks and are jammed with tourists and locals alike. The saints are quickly forgotten in the din of pumping pop music, brass bands, chattering families, indiscreet lovers and flirty teens. The sardines are not. They’re the star of every party. 

The fish are so popular here, fisheries managers estimate that the Portuguese collectively eat 13 sardines every second during a typical June — about 34 million fish for the month. 

But as climate change warms the seas and inland estuaries, sardines are getting harder to catch. Just a week before the festival, authorities postponed sardine fishing in some ports out of a fear that the diminishing population, vulnerable to changes in the Atlantic’s water temperatures, was being overfished. 

In the last few decades, the world’s oceans have undergone the most rapid warming on record. Currents have shifted. These changes are for the most part invisible. But this hidden climate change has had a disturbing impact on marine life — in effect, creating an epic underwater refugee crisis. 

Effect on communities

Drawing on decades of maritime temperature readings, fisheries records and other little-used data, Reuters has undertaken an extensive exploration of the disrupted deep. A team of reporters has discovered that from the waters off the East Coast of the United States to the shores of West Africa, marine creatures are fleeing for their lives, and the communities that depend on them are facing turbulence as a result. 

Here in Lisbon, the decline of the country’s most beloved fish tugs at the Portuguese soul. A nation on Europe’s western edge, Portugal has always turned toward the sea. For centuries, it has sent its people onto the sometimes treacherous oceans, from famous explorers like Ferdinand Magellan and Vasco da Gama to little-known fishermen who left weeping wives on the shore. 

The St. Anthony’s festival commemorates a 13th-century priest who, church doctrine says, once drew a bay full of fish to hear his sermon. It is the capital’s biggest, most joyous celebration of the year. 

At the bottom of the track where two bright yellow funicular trains begin and end an 800-foot vertiginous trip through the Bica neighborhood, a social club and a local cafe set up for the festival. Mostly locals were present, though a few German and French tourists have found their way to the party. 

Four friends sat around a wobbly plastic table perched outside the G.D. Zip Zip social club. There was just enough room for others to walk past and get to the homemade grill where the sardines were being cooked. Three of the friends had sardine skeletons and heads heaped on their plates. They talked about the fish that’s as iconic in Portugal in the summer as a hamburger on the grill in America. 

This year, however, because of limits on fishing, the available fish were mostly frozen. 

“We listen to it all year round that maybe this year, we will not have sardines,” Helena Melo said. 

Fifteen feet up the hill, Jorge Rito, who has been cooking for the club every June for five years, wiped his watering eyes with the back of his hand. He’d just gotten another order and tossed a dozen whole sardines onto the grill in neat rows. 

As he flipped the silvery fish, each seven or eight inches long, a burst of smoke rose from the charcoal, and he wiped his eyes again. 

“Worried? Yes, of course,” he said, removing the fish from the grill and placing them onto a platter. “It is important for our finances, our economies, for us.” 

 

Youngest sardines vulnerable 

 

Just as the next generation of humans may pay the highest price for climate change, the youngest generation of sardines is at risk. 

Susana Garrido, a sardine researcher with the Portuguese Oceanic and Atmospheric Institute in Lisbon, said larval sardines are especially vulnerable to climate change when compared with other similar pelagic species, such as larval anchovies, which are capable of living in a wider range of temperatures. 

Deep seawater upwelling dominates the waters off the western coast of the Iberian Peninsula and keeps the coastal waters cool. But small differences in temperature, especially when sardines are young, can have a significant impact on whether the fish larva dies or grows to maturity, Garrido said. 

Other researchers had tested how well adult sardines survived in a variety of conditions, and there was little evidence that environmental variables such as food abundance and water temperature affected the full-grown fish, she said. So she focused on the larval stage of the species. 

“We did a bunch of experiments varying salinity and all of these other variables, and they survived quite well,” she said. “It was when you change temperature that everything, yes, fell apart. So they have a very narrow range of temperatures where survival is good.” 

Garrido said a recently completed stock assessment showed that the larval sardine population was extremely low. 

“This is getting very serious,” she said. 

The Portuguese sardine population started to fall about a decade ago, even though there were plenty of adults at the time to sustain large catches. And around the same time, southerly species, such as chub and horse mackerel, slowly moved in. 

Chub mackerel, a subtropical species that was once found only in southern Portugal, is now caught all the way up the coast. 

“Probably as a consequence of warming, it is now invading the main spawning area of sardines,” Garrido said. 

Larger forces at work

Alexandra Silva, who works down the hall from Garrido, has been managing the Portuguese sardine stock assessment since the late 1990s — pivotal work that the organization uses to decide the size of the sardine catch. 

When she started, the northern population of the species was in trouble following a period of strong upwelling that brought unusually cold water to the surface. The southern stock, however, was relatively healthy. And in the early years of the century, the species recovered. 

It was not to last. These days, without large numbers of larvae growing to maturity, the population is near collapse all along the coast from Galicia in Spain to the southern end of the Portuguese coast. 

All officials can do is cut down on the fishing. But larger forces, especially climate change, are now affecting the stock in ways that fisheries managers cannot control, the two said. 

Regulators have tried. 

Starting in 2004, they blocked fishing during the spring, when sardines spawn. And for a while, that seemed to work. 

Between 2004 and 2011, the stock remained relatively healthy, with landings ranging from about 55,000 to 70,000 tons, even if the population seemed to be dipping. (From the 1930s to the 1960s, and as recently as the 1980s, fishermen landed more than 110,000 tons in a year.) 

In 2009, the Portuguese proudly announced that the Marine Stewardship Council, an independent monitoring body, had designated the species healthy and sustainable. That year, Portuguese fishermen landed 64,000 tons of the fish. By 2012, however, that number had dropped to 35,000 tons, and the country lost its sustainable certification.  

Since then, fisheries managers have restricted the number of days a week that fishermen can catch sardines, as well as the size of the catch. They’ve also restricted fishing to six months during a year. 

Last year, the catch was limited to about 14,000 tons. 

Further cuts ahead

Earlier this year, the International Council for the Exploration of the Sea, a forum of scientists that advises governments about fisheries management, warned that it would take at least 15 years to restore the stock at current fishing levels.  

After the report, European Union regulators permitted fishermen along the Iberian coast to continue at the current 16,100-ton level. But it also required Portugal, which gets the bulk of the quota, and Spain to submit a plan to restore the stock in October, which may well lead to further quota cuts. 

Fisheries manager Jorge Abrantes handles landings for Peniche, a sleepy fishing town about 60 miles north of Lisbon. He doesn’t think the fishing industry is the culprit. 

For example, Portuguese government stock assessments indicated that the sardine population had decreased by 10 percent to 25 percent in just a few months. Abrantes argued that the dip clearly wasn’t caused by fishermen pulling sardines from the sea, because no sardine nets were in the water during that period. Instead, he said, there are just not enough juvenile sardines to replenish the population. 

In Peniche, fishermen Erbes Martins and Joao Dias sat among piles of nets on a bright but chilly February morning. The two 75-year-old men would have preferred to be fishing for sardines. But the fish were spawning, so they were not allowed to catch them. 

Sure, there were other fish they could catch, but it wasn’t worth it, they say. 

 

Horse mackerel, or carapau in Portuguese, one of the southerly species that now thrive all along the coast, is abundant but doesn’t sell for much at market, Dias said. 

 

“We can’t fish for sardines in October, November, December, January, February, March — six months,” Dias said. “And carapau just doesn’t pay the bills.” 

He said the restrictions on fishing sardines were keeping a new generation from going to sea, because they can’t make enough money. 

 

“When we die,” he said, “no one is going to do the work.” 

‘I would miss this’ 

Lisbon’s Graca neighborhood sits at the highest point in the capital, its pastel homes looking down over the city’s six other hills. For the St. Anthony festival, two stages were set up for music, along with about 20 temporary food and drink stalls. 

 

Luis Diogo Sr., his wife, Rita, and their two children, Luis Jr. and Vera, came out to join the party. Luis Sr. looked across a picnic table at his son, who was well into his third plate of sardines. 

“This is a country between Spain and the sea, so we went to the sea very soon in our history,” he said. The talk turned to the present, and the dwindling catch of the city’s favorite seafood. 

Luis Jr. didn’t pay much attention to his father. He was too focused on his sardines. 

 

“I would miss this very much,” the 17-year-old said, wiping his lips clean after polishing off the last sardine on his plate. 

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EU Trade Chief Ready to Retaliate If US Imposes Auto Tariffs

European Union trade commissioner Cecilia Malmstrom said on Wednesday that the EU has a list of potential retaliation targets ready in case U.S. President Donald Trump imposes auto tariffs on EU member states.

Malmstrom told reporters after a meeting with U.S. Trade Representative Robert Lighthizer that the two did not speak specifically about auto tariffs but focused instead on regulatory cooperation issues and ways to enable EU countries to import more American soybeans and liquefied natural gas.

Malmstrom did not specify the U.S. products on which the EU would levy retaliatory tariffs, as consultations would need to take place with member states. But she said the list could include “all kinds” of products.

“It could be cars, it could be agriculture, it could be industrial products, it could be everything. And we will do that, but hope we don’t have to get to that situation.”

Trump administration officials on Tuesday said the president’s trade team made no decisions on how to proceed with new recommendations from the Commerce Department on whether to impose tariffs on autos and auto parts to protect the U.S. industry on national security grounds. The contents of the recommendations have not been disclosed.

Malmstrom said that the EU is willing to negotiate a limited trade deal on industrial goods, including autos, that seeks to bring tariff rates to zero for both the United States and Europe, but the scope of these talks cannot be defined until early next year, when the USTR completes its consultation process with Congress and the EU receives a negotiating mandate from member states.

 

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May’s Brexit ‘Moment of Truth’

Britain’s Theresa May scrambled Wednesday to sell to her Cabinet a draft Brexit divorce agreement British negotiators concluded after months of wrangling with their European Union counterparts.

But the 500-page draft remains a source of deep dispute within Britain’s ruling Conservative party and also in the country’s parliament, which will have the final say on whether to approve it.

As news emerged Tuesday that a text had been agreed, hardline Brexiteers lined up to attack the proposed agreement with former British foreign minister Boris Johnson, who resigned earlier this year, urging other ministers to join him in opposing the terms of the deal. Britain’s main opposition parties also announced their disapproval of the deal, which has not even been published yet. 

The agreement, if approved by the Cabinet and subsequently the British parliament, would see Britain remaining in a customs union for several years with the EU after it formally exits the bloc in March, but with an unclear legal path to quitting the customs arrangement while a fuller trade deal is negotiating.

Remaining in a customs union allows Britain and the EU to avoid introducing customs checks along the border separating Northern Ireland and the Republic of Ireland and would also allow “frictionless trade” between Britain and its erstwhile partners in the EU.

Tough sell

But critics say it would reduce Britain to the status of a “vassal state” by requiring it to accept EU rules and regulations without having any say about them. It would also block Britain from signing trade deals with other countries while a trade agreement is concluded with the EU, which itself could take three or four years or even longer. Reaching trade deals independently with non-EU countries was a key selling point of Brexit for many who voted nearly two years ago in a referendum to relinquish EU membership.

“This is just about as bad as it could possibly be,” Johnson fumed Tuesday to reporters in the corridors of the British House of Commons. Other Brexiteers joined him to denounce the proposed deal, one they are determined to sabotage and which runs, they say, contrary to the Conservative Party manifesto they fought an election on a year.

“For the first time in a thousand years this place, this parliament will not have a say over the laws which govern this country. It is quite an incredible state of affairs,” Johnson added.

“She hasn’t so much struck a deal as surrendered to Brussels… the UK will be a slave state,” said Conservative lawmaker Jacob Rees-Mogg.

Conservatives’ future at stake

The stakes couldn’t be higher for Theresa May. The draft agreement, May’s fate as Prime Minister and the longevity of the Conservative government are all hanging in the balance. The consequences of the process to get the draft agreement approved are difficult to guess and could end up sinking May, the Conservative government and even Brexit itself. “I don’t think anyone knows, to be truthful,” said Labour lawmaker Chuka Umunna.

May’s minority government relies on the votes in the House of Commons on a handful of lawmakers from a quirky Protestant-based Unionist party, which is also opposed to the draft deal.

Without the backing of the Democratic Unionist Party, and faced with an inevitable revolt by dozen of Conservative lawmakers, May will need to persuade opposition lawmakers to break with their party leaderships by arguing her deal is the best Britain can get.

Second vote?

But an increasing number of opposition lawmakers are jumping on the bandwagon of the People’s Vote movement, which is calling for a second Brexit referendum. Recent opinion polls suggest a majority of voters now, especially in traditional Labour heartlands, many of which voted in June 2016 for Brexit, now want Britain to retain EU membership, fearing the economic fallout from departure.

But even before seeking next month parliamentary backing for the draft customs union deal, May has to persuade her cabinet to back her — and that is not even a sure thing. On Tuesday — ahead of a full cabinet meeting called for Wednesday afternoon — May took a leaf out of the playbook of her Conservative predecessor Margaret Thatcher, who in 1990 called in ministers one by one to place them on the spot and demand their support. However, the tactic backfired on Thatcher and she was forced to resign. 

Former Conservative leader Iain Duncan Smith predicts May’s days will be numbered if she fails to reverse course and decides not to pursue a cleaner break from the EU. “If the cabinet agrees it, the party certainly won’t,” he said. Conservative lawmakers who want Britain to remain in the EU are also publicly opposing the draft agreement, placing May in a tight political vice.

Leave-supporting ministers were coming under intense pressure from hardline Brexiteers in the hours leading up to the cabinet meeting to reject the deal. They pointed to a leaked EU document outlining a strategy to force Britain to accept an almost permanent alignment with its rules and regulations governing state aid, environmental protection and workers’ rights.

In a note to EU ambassadors, Sabine Weyand, a deputy EU negotiator, said the customs union will form the basis for Britain’s future trade deal with the bloc. “They must align their rules but the EU will retain all the controls. UK wants a lot more from the future relationship, so EU retains leverage,” she wrote. 

 

 

 

 

 

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