Merkel renews push for free trade pact with India

German Chancellor Angela Merkel visits Continental Automotive Components’ plant in the northern Indian state of Haryana on Saturday. (Reuters)
Updated 03 November 2019

Merkel renews push for free trade pact with India

  • €1 billion pledged to help Indian cities switch to green transport

NEW DELHI: German Chancellor Angela Merkel said on Saturday there was a need for a fresh attempt to restart talks on finalizing a free trade agreement (FTA) between India and the EU.

Merkel who is in India along with several Cabinet colleagues and a business delegation, began talks with Indian Prime Minister Narendra Modi on trade, investment, regional security and climate change.

A free trade pact with India has been a long-pending demand from Germany which is India’s largest trading partner in Europe. The pact has been in discussion for years.

“We need a new attempt for an EU-Indian FTA. We were already close once,” Merkel said in New Delhi, adding that she held an intensive discussion about the FTA with Modi. “With the new EU-commission there will be a new attempt,” she said.

With more than 1,700 German companies operating in India, a free trade pact could help minimize the uncertainty experienced by German investors after an investment protection agreement between the two countries ended in 2016.

While addressing an audience at the Indo-German Chambers of Commerce, Merkel said she had an open discussion with Modi about problems faced by German companies and difficulties reported by small and medium enterprises to find way around the “bureaucracy labyrinth.”

In recent months German firms have raised a few other concerns, including slowdown in India’s auto sector, lack of stable policymaking and ad-hoc decisions which they say have affected buyer sentiment and created uncertainty among carmakers.

HIGHLIGHTS

  • Delhi has faced a mounting pollution crisis over the past decade.
  • Fourteen Indian cities including the capital are among the world’s top 15 most polluted cities, according to the UN.
  • According to one study, smog kills a million Indians prematurely every year.

Merkel said Germany will spend €1 billion ($1.12 billion) in the next five years on green urban mobility projects conceived under the new German-Indian partnership. It includes €200 million to replace diesel buses in Tamil Nadu state.

“These diesel buses are to be replaced by electric buses and anyone who saw the pollution in Delhi yesterday would find very good arguments for replacing even more of these buses,” Merkel said in the widely reported speech.

German funds will be used to finance several environment-friendly projects such as the introduction of electric buses to replace diesel ones used for public transport in urban centers.

Fresh funds pledged by Germany come at a time when pollution made the air so toxic in New Delhi that officials were forced to declare a public health emergency.

Photos of Merkel’s official visit show the visible effects of smog at the presidential palace — though both Modi and Merkel ignored the declared public health emergency and did not wear masks.

Merkel urged greater efforts to clean up New Delhi’s toxic air. 

She became a rare foreign leader to speak out on India’s smog crisis after being exposed to the capital’s air on Friday, when authorities said the pollution had reached “emergency” levels.

Schools were ordered closed until Tuesday and all construction halted, while Delhi authorities started distributing millions of anti-pollution masks to children.

Much of the new peak in the most dangerous PM 2.5 pollutants — particulates smaller than 2.5 microns that get into the lungs and bloodstream — has been blamed on fires lit by farmers to burn off wheat crop residues outside of the capital.


Egypt’s sovereign wealth fund to raise authorized capital five-fold up to $62.15 billion

Updated 12 November 2019

Egypt’s sovereign wealth fund to raise authorized capital five-fold up to $62.15 billion

  • Egypt’s parliament passed a law allotting 5 billion Egyptian pounds of start-up capital for the fund last year
  • Abdel-Fattah El-Sisi: Egypt could dramatically expand the size of its new sovereign wealth fund to ‘more than several trillion pounds’

CAIRO: Egypt’s sovereign wealth fund is expected to increase its authorized capital to up to a trillion Egyptian pounds ($62.15 billion) from 200 billion pounds within three years, depending on investors’ appetite, the fund’s executive director said.
Last year, Egypt’s parliament passed a law allotting 5 billion Egyptian pounds of start-up capital for the fund, called the Egypt Fund, with 1 billion pounds to be transferred immediately from the treasury.
The law also allows the president, who picks the board of directors, to transfer the ownership of any unused state assists to the fund or to any of the fund’s assists or companies.
“We expect to increase our licensed capital within three years to a trillion pounds or less ... it all depends on the investors’ response and investment appetite,” said Ayman Soliman, the fund’s chief executive.
“The sectors we will work in include industry, traditional and renewable energy, tourism and archaeology,” Soliman said.
President Abdel-Fattah El-Sisi said last month that Egypt could dramatically expand the size of its new sovereign wealth fund to “more than several trillion pounds,” and that it “aims to contribute to sustainable economic development through management of its funds and assets.”
The fund plans to buy a stake of about 30 percent in power plants built by Siemens, Soliman said, adding that six international investors have expressed interest.
“So far, six companies submitted offers to the Electricity Holding company to buy shares in the Siemens power plant,” Soliman said.
The plants, billed at the time as the world’s biggest, were built by Siemens in a €6 billion ($6.61 billion) deal signed in 2015. El-Sisi inaugurated them last year.
In May, Electricity Minister Mohamed Shaker said that the government is considering selling the power plants to private investors, but talks were still at an early stage.