YCLOAK

Top French company bosses who have for years lamented their country’s slow pace of reforms at an annual summer gathering in Provence offered glowing praise this year for the first steps taken by newly elected President Emmanuel Macron.

Sixty days after Macron became France’s youngest ever president, the CEOs gathered in the southern town of Aix-en-Provence said they had sensed a radical change in the country’s image abroad.

“The whole world admires France today. There is renewed confidence, optimism about the country,” Patrick Pouyanne, the head of oil major Total, France’s largest company, told reporters.

“What I expect from this government is that it maintains this confidence, this optimism so the French start spending more and companies start investing.”

Although Macron’s government has yet to pass any concrete measures, it outlined its action plan in policy speeches last week, and has begun talks with unions to pass an extensive reform of French labor regulations.

“I think this new president and his government are making an extremely positive start,” Isabelle Kocher of gas utility ENGIE told Reuters at the summit often referred to as a “mini-Davos”.

“They are changing France’s image abroad, I see it everywhere I go, it’s really striking and has happened very quickly,” she said.

“France went from being labeled the sick man of Europe to being seen as the savior of Europe,” a politician who sits on the board of several French companies told Reuters at one of the cafes lining the town’s sunny streets.

Tax cut debates

Even the government’s announcement earlier this week that some tax cuts would be delayed — including exemptions to a wealth tax and the introduction of a flat tax on capital income of 30 percent — did not draw much criticism.

“There are some debates about the government’s tax measures, if they’ll be done now or if it’ll wait because it has no money,” UBS’s head of French operations Jean-Frederic de Leusse told Reuters.

On Sunday, Finance Minister Bruno Le Maire seemed to suggest the delays were still the subject of discussions in government.

But when pressed, French CEOs who had in previous gatherings complained loudly about a tax burden which was the EU’s heaviest last year, refused to blame the government.

“Let’s not start criticizing,” Total’s Pouyanne said. “Let’s give them a bit of time. If there were a magic potion, it would have been used a long time ago.”

The CEO of the country’s flagship airline, Air France-KLM, concurred.

“Like all decision-makers, the government has to deal with contradicting demands. Respecting a certain number of European rules, so that our partners can take us more seriously, is important,” Jean-Marc Janaillac told Reuters.

“If the price we have to pay is a slightly delayed timeframe, that doesn’t seem to be a major inconvenience for me compared to its advantages,” he added.

France’s top central bankers agreed the government was right to prioritize deficit reduction over tax cuts so that France can, for the first time in a decade, bring its deficit below the European Union’s 3 percent of GDP ceiling.

ECB Executive Board member Benoit Coeure said France’s respect for the rules would help discussions the government hopes to launch about common budget measures in the euro zone.

“We’re all for tax cuts, but let’s not equate reform with immediate, unfunded tax cuts,” Bank of France Governor Francois Villeroy de Galhau told the conference on Sunday.

“We’ve already paid a heavy price for this kind of liability on the future.”

 
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In 28 years in India’s pharmaceuticals sector, Rajiv Desai has never been busier.

Most of the last six months on his desk calendar is marked green, indicating visits to the 12 plants of Lupin, India’s No. 2 drugmaker, where Desai is a senior quality control executive. Only one day is red — a day off.

That’s what is needed these days to satisfy the U.S. Food and Drug Administration that standards are being met.

“In this sector, you’re only as good as your last inspection,” Desai said in his office in suburban Mumbai.

Often dubbed “the pharmacy of the world,” India is home to the most FDA-approved plants outside of the United States and supplies about 40 percent of the $70 billion worth of generic drugs sold in the country.

Damaged reputation

But sanctions and bans have badly damaged India’s reputation and slowed growth in the $16 billion sector. Drug exports fell in the fiscal year ending in March 2017.

More than 40 plants have been banned by the FDA for issues ranging from data fraud to hygiene since India’s then-largest drugmaker Ranbaxy was pulled up for serious violations in 2008.

Drug companies have spent millions of dollars on training, new equipment and foreign consultants. Yet the Indian Pharmaceutical Alliance of the top 20 firms says its members still need at least five more years to get manufacturing standards and data reliability up to scratch.

The case of Lupin shows why.

In the next few months, the FDA is expected to clear Lupin’s Goa plant of problems found in 2015, Desai said.

However, the agency also published a notice last week citing issues with data storage at its plant in Pithampur, central India.

If companies want to continue to sell into the world’s biggest health care market, they must keep constant vigilance.

Asked about Lupin’s case, the FDA said in a statement it did not “comment on compliance matters,” but said generally: “India’s regulatory infrastructure must keep pace to ensure that relevant quality and safety standards are met.”

Form 483

India has its own standards body, the Central Drug Standard Control Organization (CDSCO), which maintains that its quality controls are stringent enough to ensure drugs are safe.

The FDA has taken matters into its own hands and gradually expanded in India to more than a dozen full-time staff.

Inspections are frequent and increasingly unannounced. If the agency finds problems, it issues a Form 483, a notice outlining the violations, which if not resolved can lead to a warning letter and in worst case, a ban.

Violations range from hygiene, such as rat traps and dirty laboratories, to inadequate controls on systems that store data, leaving it open to tampering.

None of the violations the FDA has cited in India have explicitly said the drugs are unsafe, and when companies are banned by the FDA they can sell into other markets, including in the developing world, until the bans are lifted.

There are also no studies showing that the drugs have harmed anyone in the world. But by definition, the notices are issued when the FDA finds conditions that might harm public health.

​Don’t tell anyone

Industry watchers say Lupin, which specializes in oral contraceptives and drugs for diabetes and hypertension, is doing better than most. So far none of its infractions have extended to a ban.

On a recent visit by Reuters to its Goa plant, blue-uniformed employees could be seen working on giant machines, then making notes in hardbound registers. These are being phased out as Lupin transitions to more secure e-files.

Employees are often videotaped to ensure they follow standard operating procedure. Manufacturers have cut back to focus on quality over quantity: five years ago, Lupin was making 1 billion pills a month at one of its Goa plants. Now it makes 450 million.

Both the company and employees needed to be willing to acknowledge errors, Desai said. The first impulse in the past was often “don’t tell anyone,” he said.

“We’re humans after all, not robots. We make mistakes,” said Amol Kolatkar, a production head at the Goa site.

As recently as three years ago, training was a formality, Desai said. Now, when an error is traced to an employee, the entire team undergoes fresh training.

“I have worked at a pharma company before, but this is the first time I went through such a training,” said another Lupin quality control officer, who asked not to be named because he was not authorized to speak to the media.

The quality control role is key.

“They (Lupin) have had a practice where company quality heads report directly to Nilesh Gupta (the managing director),” said Amey Chalke, an analyst at HDFC Securities. “Some other companies have also started doing that now.”

The companies also have to be willing to spend big. Lachman, PwC and Boston Consulting conduct mock audits at the Goa plant every three to six months, at a cost of up to $400 an hour.

“These days the FDA is giving us 483 on small, small things,” a third quality control officer said. “So we are always auditing.”
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Canadian lender Desjardins is considering no longer funding energy pipelines, a spokesman said Saturday, citing concerns about the impact such projects may have on the environment.

Desjardins, the largest association of credit unions in North America, Friday temporarily suspended lending for such projects and may make the decision permanent, spokesman Jacques Bouchard told Reuters by telephone.

He said the lender would make a final decision in September.

Following ING

Desjardins, a backer of Kinder Morgan Canada Ltd’s high-profile expansion of its Trans Mountain pipeline, has been evaluating its policy for such lending for months, Bouchard said.

If it makes the decision permanent, that would likely mean Desjardins would not help finance other major Canadian pipelines projects, including TransCanada Corp’s Keystone XL and Energy East and Enbridge Inc’s Line 3.

Such a move would follow that of Dutch lender ING Groep NV, which has a long-standing policy of not funding projects directly related to oil sands, and is the latest sign that pipelines could have a harder time getting funding as banks face increasing pressure to back away.

Patrick Bonin, a campaigner with the environmental group Greenpeace, praised Desjardins for temporarily halting pipeline funding, but called on the lender to make it permanent and reconsider its C$145 million ($113 million) commitment to Trans Mountain.

Indigenous, environmental groups

Desjardins is among 24 financial institutions that agreed to lend money to a subsidiary of Kinder Morgan Canada, majority owned by Kinder Morgan Inc of Houston, according to regulatory filings.

A coalition of more than 20 indigenous and environmental groups, including Greenpeace, in June called on 28 major banks to pull funding for Trans Mountain, citing the risk of pipeline spills and their potential contribution to climate change.

ING, which was targeted by the coalition, said it will not fund any of the major Canadian pipelines.

The same month, Sweden’s largest national pension fund, AP7, sold investments in six companies that it says violate the Paris climate agreement, including TransCanada, in a decision environmentalists believe is the first of its kind.
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The G-20 summit of the world’s richest economies wrapped up Saturday against a backdrop of angry protests, and a pledge by leaders to fight protectionism in the face of U.S. President Donald Trump’s “America First” policy and Brexit. The U.S. leader took center stage at the two-day gathering, and his meeting with Russian leader Vladimir Putin was the major headline. VOA Europe correspondent Luis Ramirez reports from Hamburg.
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Visiting Poland this week, U.S. President Donald Trump pledged to boost exports of American liquefied natural gas (LNG) to Central Europe and take on Russia’s stranglehold on energy supplies.

“America stands ready to help Poland and other European nations diversify their energy supplies so that you can never be held hostage to a single supplier,” Trump told reporters after talks with his Polish counterpart Thursday.

Up to now, that supplier has been Russia. It supplied around a third of Europe’s gas demand in 2016, with an even greater share in many of the former Soviet states in Central and Eastern Europe.

Watch: US, Russia on Collision Course in Competition for European Gas Market

Natural gas and dominance

Russian state-owned firm Gazprom shut off pipelines to Ukraine in 2015, depriving Kyiv of a major source of revenue and disrupting supplies to Eastern Europe.

“It’s a key pillar of Russian foreign policy: of using gas and energy as a means of asserting dominance over Central Europe,” said Marek Matraszek, founder of the lobby firm CEC Government Relations, who played a major role in the Polish government’s acquisition of U.S.-built F-16 fighter planes.

The first shipment of American liquefied natural gas arrived at the port of Swinoujscie on Poland’s Baltic coast last month. The port facility and liquefaction plant were finished in 2015, aimed at diversifying the country’s energy sources and enabling Poland to become a hub supplying imported gas across Central and Eastern Europe.

With that in mind, the Three Seas Initiative Summit in Warsaw Thursday brought together leaders from a dozen Eastern European nations, plus Trump. He pledged the United States will never use energy as a political tool. 

Russia’s pipeline

Energy analyst Grzegorz Malecki, a former head of Poland’s Foreign Intelligence Agency says Russia will be watching with interest.

“If this new source of gas supplies is moved forward and the infrastructure built, it may cause Russia to change its approach. The Polish government is probably counting on it. Russia may change its politics towards Poland regarding energy,” Malecki told VOA in an interview this week.

Russia has plans of its own to boost exports. Initially scheduled to open in 2019, the Nord Stream 2 pipeline would double its capacity to export gas directly to Germany beneath the Baltic Sea, bypassing Ukraine. Eastern European states want the project blocked.

“If we want to have United States’ LNG supplies in Central Europe, we also want to see the United States getting tough on Nord Stream 2, which means getting tough on Russia,” Matraszek said.

American LNG and the Nord Stream 2 project are on a collision course, with Poland stuck in the middle, Malecki said.

“It’s hard to hide the fact that these two projects compete with each other. The odds are that there will be a clash of these energy giants in Europe,” he said.

Three-hundred kilometers west along the Baltic coast from where the existing Nord Stream pipeline comes ashore in Germany, Trump and Russia’s President Vladimir Putin held their first face-to-face meeting at the G-20 Summit in Hamburg Friday.

If the American LNG deal goes through, it could have a broader impact on U.S.-Russia relations, said John Hannah of the Washington-based Foundation for Defense of Democracies.

“I think it could all happen relatively quickly and in a way that will give us much stronger leverage over Putin and the Russians to begin pushing back against some of the more aggressive activities that we’ve seen, not only in Europe but against the United States as well,” Hannah said.

Trump remains upbeat about his relationship with Putin, but the evolving energy policies in Europe will likely remain a source of friction.
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Visiting Poland this week, US President Donald Trump pledged to boost exports of American liquefied natural gas (LNG) to Central Europe, challenging Russia’s dominance of the market. Many European countries accuse Moscow of using energy as a political tool. As Henry Ridgwell reports from Warsaw, analysts say the United States and Russia are on a collision course over energy supplies to the region.
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Job creation in the U.S. appears to have picked up speed, with employers adding 222,000 jobs last month. But the unemployment rate ticked higher as more Americans resumed their job search. That’s probably a good thing, according to some economists who say the bigger challenge is how to speed up wage growth. Mil Arcega reports.
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A jump in first-quarter trade between China and North Korea was “unexpected” and masks a declining trend, a state-run Chinese newspaper said Friday, after U.S. President Donald Trump denounced China’s trade with its isolated neighbor.

Trade between China and North Korea grew almost 40 percent in the first quarter, Trump said via Twitter Wednesday, casting doubt on China’s assertion it is working to press North Korea to rein in its nuclear and missile programs.

37.4 percent blip

Data released in April by Beijing showed China’s trade with North Korea grew 37.4 percent in the first quarter over the corresponding 2016 period, the Global Times said, adding that subsequent data showed declining trade in April and May.

“First quarter data cannot speak for the whole year,” the paper said in an editorial that carried the headline “China-NK Q1 trade data must be read fairly.”

“The trade volume for 2017 is unlikely to grow significantly from last year,” it said.

Sanctions implemented

While the first-quarter rise was “somewhat unexpected,” the newspaper said China had been strictly implementing U.N. sanctions against North Korea, and that a ban on imports of its coal had taken a toll on two-way trade.

The newspaper said trade between China and North Korea had declined during the previous three years.

China has not imported North Korean coal since it banned imports of the fuel Feb. 18, the General Administration of Customs said in April.

The Global Times, published by the official People’s Daily, reiterated that sanctions should not affect normal trade activities with North Korea, especially those concerning people’s livelihoods.

“America’s public opinion mistakenly depicts U.N. sanctions on Pyongyang’s nuclear and missile activities as a total embargo,” it said, citing a four-fold increase in China’s grain exports to North Korea in the first quarter. “Beijing will never export materials to Pyongyang that could be used for nuclear and missile activities.”
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