A radical plan to transform Switzerland’s financial landscape by barring commercial banks from electronically creating money when they lend was resoundingly rejected by Swiss voters on Sunday.

More than three quarters rejected the so-called Sovereign Money initiative, according to the official result released from the Swiss government.

All of the country’s self-governing cantons also voted against in the poll, which needed a majority from Switzerland’s 26 cantons as well as a simple majority of voters to succeed. Concerns about the potential risks to the Swiss economy by introducing a “vollgeld” or “real money” system appear to have convinced voters to reject the proposals.

The Swiss government, which had opposed the plan because of the uncertainties it would unleash, said it was pleased with the result.

“Implementing such a scheme, which would have raised so many questions, would have been hardly possible without years of trouble,” Finance Minister Ueli Maurer said.

“Swiss people in general don’t like taking risks, and …the people have seen no benefit from these proposals. You can also see that our banking system functions…The suspicions against the banks have been largely eliminated.”

The vote, called under Switzerland’s system of direct democracy after gathering more than 100,000 signatures, wanted to make the Swiss National Bank (SNB) the only body authorized to create money in the country.

Contrary to common belief, most money in the world is not produced by central banks but is instead created electronically by commercial lenders when they lend beyond the deposits they hold for savers.

This arrangement, underpinned by the belief that most debts will be repaid, has been a cornerstone of the global capitalist system but opponents say it is unstable because the new money created could exceed the rate of economic growth, which could lead to inflationary asset bubbles.

If approved, Switzerland, famed for its banking industry, would have been the first country in the world to introduce such a scheme, leading opponents to brand the plan a dangerous experiment which would damage the economy.

The plan could have had repercussions beyond Switzerland’s borders by removing a practice which underpins most of the world’s bank lending.

Support for reform had grown in the wake of the 2008 economic crisis, with campaigners saying their ideas would make the financial system more secure and protect people’s savings from bank runs.

As well as the Swiss government, opposition came from the Swiss National Bank and business groups.

“We are pleased, this would have been an extremely damaging initiative,” said Heinz Karrer, president of business lobby Economiesuisse.

The SNB acknowledged the result, saying adoption of the initiative would have made it much harder to control inflation in Switzerland.

“With conditions now remaining unchanged, the SNB will be able to maintain its monetary policy focus on ensuring price stability, which makes an important contribution to our country’s prosperity,” it said in a statement.

Campaigners – a group of academics, former bankers and scientists – said they would continue to work on raising their concerns.

“The discussion is only just getting started,” said campaign spokesman Raffael Wuethrich. “Our goal is that money should be in the service of the people and not the other way around and we will continue to work on it.” 
…

Italy’s new coalition government has no intention of leaving the euro and plans to focus on cutting debt levels, Economy Minister Giovanni Tria said on Sunday, looking to reassure nervous financial markets.

Italian government bonds have come under concerted selling pressure on fears the government will embark on a spending splurge that Italy can ill-afford and markets are wary that euro-skeptics within the coalition might try to push Italy out of the eurozone.

In his first interview since taking office a week ago, Tria told Corriere della Sera newspaper that the coalition wanted to boost growth through investment and structural reforms.

“Our goal is [to lift] growth and employment. But we do not plan on reviving growth through deficit spending,” Tria said, adding that he would present new economic forecasts and government goals in September.

“These will be fully coherent with the objective of continuing on the path of lowering the debt/GDP ratio,” he said.

The government, comprising the anti-establishment 5-Star Movement and far-right League, initially named as economy minister a man who had called the euro an “historic error”.

He was eventually handed a less important portfolio after the head of state refused to accept his nomination.

Tria, a little-known economics professor who is not affiliated to any party, said the coalition was committed to remaining within the single currency.

“The position of the government is clear and unanimous. There is no question of leaving the euro,” he said.

“The government is determined to prevent in any way the market conditions that would lead to an exit materializing. It’s not just that we do not want to leave, we will act in such a way that the conditions do not get anywhere near to a position where they might challenge our presence in the euro.”

Tria said he had spoken to his German counterpart and was looking for “fruitful dialogue” with the Europe Union, adding that Italian interests chimed with those of Europe.

“Basic choices”

The new government has promised to roll back pension reform, cut taxes and boost welfare spending, measures that are expected to cost tens of billions of euros. It also needs to find an estimated 12.5 billion euros ($14.8 billion) to stave off the threat of an automatic increase in sales taxes because of previously missed deficit targets.

Tria declined to say whether the coalition would hike the deficit target, but said he aimed to meet existing 2018 and 2019 debt reduction goals.

The previous center-left government had forecast a fall in debt to 130.8 percent of gross domestic product (GDP) this year and 128 percent next year against 131.8 percent in 2017.

Tria urged investors to look not just at the hard figures, but also study the content of the forthcoming 2019 budget.

“As part of the debt reduction and deficit reduction goals, the budget will reflect the basic choices on how and when to implement the [government] program,” he said.

“We have a program that focuses on structural reforms and we want it to also act on the supply side, creating more favorable conditions for investment and employment.”

The government has also promised to review a recent shake-up of mutual and co-operative banks, saying the changes risked penalizing domestic lenders. However Tria said the issue “is not the first problem we have to tackle”.

He also distanced himself from calls within the coalition for the government to issue securities to pay off individuals and companies owed money by the state.

“Stop-gap solutions solve nothing,” he said.
…

The International Labor Organization reports 152 million children are victims of child labor, with nearly half forced to work in hazardous, unhealthy conditions that can result in death and injury.

Twenty years ago, hundreds of people, including children, participated in the Global March against Child Labor. They came to the International Labor Conference in Geneva demanding a Convention on the Elimination of the Worst Forms of Child Labor.

Basu Rai from Nepal was the youngest of the marchers. Now, a grown man he recalls clambering on table tops chanting slogans.

“Go, Go Global March. Stop, Stop Child Labor. We want education. No more tools in tiny hands. We want books and we want toys,” he said.

Rai was orphaned at age four. Homeless and without anyone to look after him, he became a street gangster, a rag picker, a delivery boy. He did anything to survive. Now, as an adult, he has become a Child Rights Activist.

“But, still I am afraid because I am a father to a two-month old daughter and then because the world is not safe for the children. So, this is our collective responsibility to work together for the sake of the childhood…But, still there are 152 million children who are languishing in a kind of slavery,” said Rai.

Kailash Satyarthi, an Indian children’s rights activist and Nobel peace prize laureate, led the 1998 Global March of enslaved and trafficked children. He said progress has been made since then, but much remains to be done.

“If the children are still trapped into the supply chain, if the children are still enslaved, if the children are still sold and bought like animals and sometimes for less than the price of animals to work in fields and farms, and shops and factories, or for household work as domestic help, this is a blot on humanity,” said Satyarthi.

The ILO reports nearly half of the child laborers are found in Africa and in the Asia and Pacific regions. Sub-Saharan Africa has the largest proportion with one in five children working.

It notes children typically enter the work force at the age of six or seven, getting involved in hazardous work as they get older. About 70 percent of hazardous work is concentrated in agriculture. Other forms include mining, construction, and domestic service.

ILO Director-General, Guy Ryder, said the world is facing an epidemic of occupational accidents and disease.

“Honestly, the annual toll is appalling — 2.78 million work-related deaths, 374 million injuries and illnesses. If these were the victims of a war, we would be talking a lot about it. Children and young workers are at greater risk and suffer disproportionately and with longer lasting consequences,” he said.

Ryder says legislation, labor inspection, and workplace labor relations and practices must be strengthened to stop this carnage.

 

Most child laborers are in the developing world. But, this shameful practice also occurs in some of the world’s richest countries. Zulema Lopez, a Child Rights Activist and Labor Relations student in the United States recalls her life as a child.

“At the age of seven, it was normal for me to wake up at five o’clock in the morning, put on my shoes, put on a T-shirt and go work in the hot sun, burning — my back was aching, 20-30 pounds of buckets of cucumbers next to me, trying to make ends meet,” said Lopez.

Lopez said people do not realize what is happening in their own backyard. She calls the exploitative work that robs children of their childhood unacceptable and said it must stop. She said children are the future and if people fail to protect the world’s children, then there is little hope for the future.
…

The Shanghai Cooperation Organization (SCO)is holding its first summit since India and Pakistan joined the bloc which is widely seem by observers as a means for blocking American influence in Central Asia. 

The founding members of the alliance are China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. 

The summit is being held in the eastern Chinese coastal city of Qingdao. 

Chinese President Xi Jingping told the group in opening remarks Sunday, “We should reject selfish, short-sighted, narrow and closed-off policies.We must maintain the rules of the World Trade Organization, support the multilateral trade system and build an open global economy.”

Political analysts see the Chinese leader’s remarks as a thinly veiled reference to the chaos at the recent G-7 summit in Canada where the U.S. and its allies were divided by escalating trade tensions. 

After leaving the G-7 meeting, U.S. President Donald Trump described Canadian Prime Minister Justin Trudeau as “meek and mild” and “dishonest & weak.”

Trump also withdrew his endorsement of the G-7 summit’s communique.
…

Prime Minister Theresa May will gather together squabbling British ministers at her country residence after this month’s European Union summit

to settle on details of a much-anticipated Brexit policy paper.

May has yet to agree on some of the fundamental details of what type of trading relationship she wants to have with the European Union after Britain leaves next March. As a result, talks with the EU have all but ground to a halt, raising fears among businesses and in Brussels that Britain could end up crashing out of the bloc without an agreed-upon deal.

“There’s going to be a lot happening over the next few weeks. You know, people want us to get on with it, and that’s exactly what we’re doing,” May told reporters on her way to a G-7 summit in Canada.

May will look to the June 28-29 EU summit as a chance to pin down some of the most troublesome details of Britain’s exit agreement and pave the way for more intensive talks on the all-important future economic partnership between the world’s fifth-largest economy and the world’s biggest trading bloc.

But senior ministers are still at odds about what type of post-Brexit customs arrangement will be best for Britain, meaning talks on the future are unlikely to move far in June.

Before leaving for Canada, May was forced into crisis talks with her Brexit minister who had challenged her so-called backstop plan to ensure no hard border on the island of Ireland.

Then her foreign minister, Boris Johnson, was recorded saying there could be a Brexit meltdown.

‘Away day’

With that in mind, May said she was planning to summon ministers to Chequers, her country residence, for an “away day” aimed at ending months of squabbling and agreeing upon the contents of a so-called “white paper” policy document.

The white paper is expected to set out in more detail what Britain wants from its long-term relationship with the EU. May did not give a firm date for when it would be published.

Ministers had said it would be published before the June EU summit, suggesting rows had helped delay the paper.

Jeremy Corbyn, the leader of the opposition Labor Party, criticized the delay. “The government promised a ‘detailed, ambitious and precise’ Brexit white paper this month setting out their negotiating priorities. Once again it’s been postponed. The Tories are botching Brexit and risking jobs and our economy in the process,” he said in an emailed statement.

May said her government and the EU were still working toward an October deadline in talks to secure an agreement on the terms of Britain’s withdrawal and an outline of the future partnership.

“We’re all, both we and the European Union, working to that timetable of October,” May said. “From my point of view, what we’re doing is working to develop that future relationship, because there’s a big prize for the U.K. here at the end of this.”
…

U.S. President Donald Trump said Saturday that he had instructed his representatives not to sign a communique by all seven leaders attending the G-7 summit in Canada, citing statements by Canada’s Prime Minister Justin Trudeau made after he left.

“Very dishonest and & weak,” Trump tweeted in response to Trudeau’s remark that the new U.S. tariffs on aluminum and steel were “insulting.”

“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers, and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” Trump added.

Retaliatory measures

Trudeau closed the summit Saturday by refusing to budge on positions that place him at odds with Trump, particularly new tariffs on steel and aluminum that have irritated Canada and the European Union.

He said in closing remarks that Canada would proceed with retaliatory measures on U.S. goods as early as July 1.

“I highlighted directly to the president that Canadians did not take it lightly that the United States has moved forward with significant tariffs,” Trudeau said in the news conference following the two-day summit. “Canadians, we’re polite, we’re reasonable, but we will also not be pushed around.”

British Prime Minister Theresa May echoed Trudeau, pledging to retaliate for tariffs on EU goods. “The loss of trade through tariffs undermines competition, reduces productivity, removes the incentive to innovate and ultimately makes everyone poorer,” she said. “And in response, the EU will impose countermeasures.”

Trudeau and May also bucked Trump on another high-profile issue: Russia. Trump wants to have Russia — which was pushed out in 2014 over its aggression in eastern Ukraine — rejoin the group. Trudeau said he was “not remotely interested” in having Russia return to the group, made up of the world’s seven most advanced economies.

May added that she also welcomed the G-7’s recognition of the need to continue sanctions on Russia, given “Russia’s failure to fully implement the Minsk agreements” of 2014 that were meant to end the war in Ukraine. “We have agreed to stand ready to take further restrictive measures against Russia if necessary,” she said.

​’Fair and reciprocal’ trade

Before leaving the summit Saturday, Trump said there must be “fair and reciprocal” trade between the U.S. and other countries.

“The United States has been taken advantage of for decades and decades and we can’t do that anymore,” he told reporters shortly before leaving the summit for Singapore, where he will meet next week with North Korean leader Kim Jong Un.

WATCH: President Trump on Trade

Trump said many “unfair foreign trading practices” are getting “straightened out slowly but surely.”

He blamed past U.S. leaders for the current global trade landscape and congratulated other world leaders for “so crazily being able to make these trade deals that were so good for countries and so bad for the United States.”

Trump declared “those days are over” and said that talks this weekend with G-7 leaders convinced him they are “committed to a much more fair-trade situation for the United States.”

At a bilateral meeting Friday with Trudeau, the U.S. president joked that the Canadian prime minister had agreed to “cut all tariffs.”

Despite the two leaders exchanging criticism of each other’s trade policies the previous day, Trump described the cross-border relationship as very good, stating “we’re actually working on cutting tariffs and making it all very fair for both countries. And we’ve made a lot of progress today. We’ll see how it all works out.”

In a subsequent sit-down meeting with Emmanuel Macron, Trump said the French president had been “very helpful” in efforts to address trade deficits with the European Union.

Macron responded that he had a “very direct and open discussion” with Trump, and “there is a critical path that is a way to progress all together.”

Canada’s foreign minister, Chrystia Freeland, confirmed she met Friday with U.S. Trade Representative Robert Lighthizer to discuss the tariffs and the fate of the North American Free Trade Agreement (NAFTA). She said Canada, however, would not change its mind about the U.S. steel and aluminum tariffs, which she termed “illegal.”

Trump imposed the tariffs on the ground that weak domestic industries could affect U.S. national security. ​Canada, Mexico and the European Union are introducing retaliatory tariffs.

“I think the only way this moves toward a deal is if the concern grows among the G-7 countries about the economic impact of this, that Trump begins to feel some pressure from farmers and small manufacturers and others that are harmed, that other countries are feeling the pressure from the decline in their steel and aluminum exports to the United States and it causes some reconsideration of the current positions,” said Edward Alden, a senior fellow at the Council on Foreign Relations.

On the eve of the summit, Trump had lashed out on Twitter at Macron and Trudeau, who had criticized Trump’s trade stance at a joint news conference Thursday in Ottawa. The White House then announced Trump would skip some of the G-7 sessions and depart for Singapore on Saturday morning, several hours earlier than planned.

Trudeau, alongside Trump, was asked if he was disappointed the U.S. president was leaving early. He did not reply, but Trump grinned broadly and said “he’s happy” before appearing to stick out his tongue.

Some attending the summit were openly expressing strong concern about Trump’s positions.

“What worries me most is that the rules-based international order is being challenged,” Donald Tusk, the chairman of European Union leaders, said at a news conference just prior to the start of the G-7 talks. “Quite surprisingly not by the usual suspects, but by its main architect and guarantor — the United States. Naturally, we cannot force the U.S. to change its mind.”

Should Trump disassociate with the group, reducing it to a G-6, it would leave the collective virtually inconsequential, according to some analysts.

“The United States accounts for more than half of the GDP of the total G-7. So, without the United States, the G-7 really isn’t anything,” according to Sebastian Mallaby, a CFR senior fellow for international economics.

Russia invitation?

Before departing the White House for Canada, the president told reporters that Russia should be invited back to the summits of leading advanced countries.

When asked about Russia on Saturday in Quebec, Trump said, “I think it would be good for the world. We’re looking for peace in the world. We’re not looking to play games.”

WATCH: President Trump on Russia

One other G-7 leader, Italian Prime Minister Giuseppe Conte, said Friday in a tweet that he supported Trump’s suggestion.

But other G-7 leaders said it was not going to happen at this time.

European Union leaders are in agreement “that a return of Russia to the G-7 format summits can’t happen until substantial progress has been made in connection with the problems with Ukraine,” German Chancellor Angela Merkel told reporters.

A spokesman at the Kremlin, Dmitry Peskov, brushed it all off.

“Russia is focused on other formats apart from the G-7,” Peskov said, according to the Sputnik news agency.
…

French President Emmanuel Macron’s economic policy is viewed as favoring the rich and must change to address inequalities, according to a memo written by three economists who worked on his campaign program, Le Monde newspaper said on Saturday.

The criticism is the latest sign of the trouble created by Macron’s economic reforms among the center-left supporters who propelled him to power last year.

In the confidential memo sent to Macron and plastered across Le Monde’s front page, the economists said his policy was failing to convince “even the most ardent supporters.”

“Many supporters of the then-candidate express their fear of a lurch to the right motivated by the temptation to steal the political space left vacant by a struggling conservative party,” the economists wrote.

Jean Pisani-Ferry, the Sciences Po Paris university professor who coordinated Macron’s economic program and is an influential voice in Franco-German academic circles, is one of the authors. He declined to comment when contacted by Reuters.

The other two, Philippe Martin, a former Macron adviser who heads France’s Council of Economic Analysis (CAE), and Philippe Aghion of the elite College de France, did not return Reuters’ requests for comment.

Macron, who campaigned on a promise to be “neither left nor right”, moved swiftly in his first year to loosen labor rules and slash a wealth tax, earning himself the nickname “president of the rich.”

The economists said there was a risk the French would find these measures unfair and think the government is deaf to the needs of the poorest in society.

“The president must talk about the issue of inequalities and not leave this debate to his opponents,” the economists wrote.

Among proposals to reduce inequalities, the economists suggested a rise in inheritance tax for the richest, scrapping tax credits on property investments, and cancelling Macron’s promise to abolish a housing tax for the wealthiest 20 percent.

Macron’s office confirmed it had received the note, but said it did not foretell government policy. Macron is currently in Canada with other Group of Seven

leaders, locked in a battle over trade tariffs with U.S. President Donald Trump.
…