Financial_Times_UK 28Jan2020

6 ★ FINANCIAL TIMES Tuesday28 January 2020

VA L E N T I N A R O M E I— LO N D O N

German business confidence uddenlys

dropped in January,thwarting hopes

the downturn in the export-led manu-

facturing sector wasdue to stabilise.

The Ifo Institute, a Munich-based think-

tank, said its measure showing senti-

ment among the 9,000 German compa-

nies it surveys onthly had declined tom

95.9 in January, from 96.3 in December.

That contrasts witheconomists’ expec-

tationsinaReuterspollofariseto97.

“This sounds a warning note for those

expecting an impressive rebound in the

Germangrowthrate,”saidAndrewKen-

ningham, chief Europe economist at

Capital Economics. “We think the econ-

omy will continue to grow at only a very

anaemic pace in the first half of this

year.”

The drop is the first since sentiment

begantocreepupinSeptember,afteran

almost uninterrupted decline over the

previoustwoyears.

The forward-looking indicator for

business expectations slipped to 92.9 in

January from 93.8 a month earlier.

Economists polled by Reuters expected

anincreaseto95.

The unexpected slide in the business

climate of the eurozone’s largest econ-

omy cools hopes of a stabilisation in

German economic activity after senti-

ment indicators released last week

showedimprovement.

The headline business climate index

dropped despite improved sentiments

in the manufacturing sector as both the

services and the construction sector

reported a deterioration compared with

thepreviousmonth.

The net balance between manufac-

turers reporting good or poor business

climate increased to minus 1.6 from

minus 5 in December. However, the net

balance dropped to 18.7 from 21.3 for

businessesintheservicessector.

“This is a big disappointment in light

of the otherwise solid PMI data,” said

Claus Vistesen, chief eurozone econo-

mistatPantheonMacroeconomics.“We

take comfort in the fact that manufac-

turing sentiment jumped at the start of

the year. This is, after all, the most cycli-

callysensitivesector.”

The Zew economic sentiment for Ger-

manyjumpedtothehighestlevelinfour

years and the IHS Markit purchasing

managers’ indices showed German

services activity expanding solidly in

January, while the deterioration in the

manufacturing sector has eased the

mostsinceFebruarylastyear.

Manufacturing

Hope for German rebound hit

by fall in business confidence

VA L E R I E H O P K I N S —B U DA P E S T

Slovenia’s prime minister resignedyes-

terday and called for early elections,

saying his minority government was

unable to pushthrough crucial

reforms.

Marjan Sarec, a former comedian, had

presided over a coalition of five centre-

left parties which together had held 43

of the 90 seats in the parliament since

electionsinAugust2018.

In November, the bloc lost the sup-

port of the Levica (Leftists) party. As a

result, the government had been unable

to carry out reforms of pensions and

healthcare, which the opposition criti-

cisedastoocostly.

“With this coalition, this situation in

parliament, I cannot fulfil the expecta-

tions of the people,” Mr Sarec said

shortlyafterhisannouncement.

His resignation came on the heels of

that of Andrej Bertoncelj, his finance

minister, who said recent proposals by

the health minister, suggesting that

funds from the national budget be used

to compensate for the losses of the pub-

lichealthsystem,werenotfeasible.

“MrSarecmadegoodonhiswordthat

he is not in it [politics] for its own sake,”

said Aljaz Pengov Bitenc, a political ana-

lyst. “He wants to get stuff done, and if

hecannotgetstuffdone,hewillresign.”

Mr Pengov Bitenc said the dispute

over healthcare funding — which he

called a “third rail” for Slovene politics

owing to “ingrained interests” — had

doggedsuccessivegovernments.

Healthcare financing has been “get-

ting less and less sustainable over the

decades” as Slovenia’s population of 2m

hasaged,headded.

Mr Sarec has called for new elections,

but analysts said that before they can be

triggered, opposition parties should be

given the opportunity to try to forge a

new coalition, which could bring the

rightwingSlovenian Democratic party

backintopower.

However, Janez Jansa, the party

leader and an ally of Viktor Orban, the

Hungarianprimeminister,isunpopular

outsidehis core support base, and a deal

thatwould make him premier looked

unlikely,saidMrPengovBitenc.

Central Europe

Slovenia’s PM resigns after

health reforms are blocked

‘With this coalition, this

situation in parliament,

I cannot fulfil the

expectations of the people’

I N T E R N AT I O N A L

L AU R A P I T E L— I S TA N B U L

Fresh from a summit marking the 70th
anniversary of Nato, Turkey’s president
Recep Tayyip Erdogan had a clear mes-
sageaboutAnkara’sresolvetobeseenas
anautonomousglobalpower.
“Today, Turkey can launch an opera-
tiontoprotectitsnationalsecuritywith-
out seeking permission from anyone,”
he told members of Britain’s Turkish
communityinLondonlastmonth.
The statement was typical of the
assertive, often unilateral foreign policy
Mr Erdogan has pursued in recent
years. In October, Turkey defied west-
ern allies, sending troops into north-
eastern Syria against the wishes of Nato.
Two months later the Turkish leader
wasvowingtodeploypersonneltoLibya
even as the UN called on the world to
respectanarmsembargo.
Turkey’s desire to gain greater influ-
ence in its neighbourhood is not new.
But the increasingly bold pursuit of its
goals has riled European and Arab lead-
ersalike.
“Turkey seems to be growing more
and more aggressive,” said one Euro-
pean diplomat. “The issues have been
pilingup.”
Turkish activism in the Middle East
and north Africa grew after the start of
theArabuprisingsthatshooktheregion
in 2011. Betting that a new Islamist
order was in the ascendant, Turkey fun-
nelled support to rebel groups battling
president Bashar al-Assad in Syria and
rallied behind Mohamed Morsi, leader

oftheMuslimBrotherhoodinEgypt.
Ankara hoped the interventions
would help restore its influence in parts
of the former Ottoman Empire, but the
gamblefailed.Russiacametotherescue
of the Damascus regime and Morsi was
toppled in a popularly backed coup that
brought to power Abdel attah el-Sisi,F
who was supported by the UAE and
SaudiArabia.
Anewapproachfavouringdirectmili-
tary action emerged, analysts say, after
the failed coup against Mr Erdogan in
2016 weakened the autonomy of the
army and enabled the Turkish presi-
denttobolsterhisownpower.
Since then, Turkey has launched
three separate military incursions into
northern Syria, including October’s
assault on Kurdish militias that had
foughtfortheUSagainstIsis.
Elsewhere, Ankara has taken sides in
an Arab Gulf dispute, supporting Doha
when Abu Dhabi and Riyadh led a
regional embargo of Qatar; dispatched
warships to block European oil compa-
nies from drilling for gas in the eastern
Mediterranean;anddefiedthewishesof
Nato allies by buying an air defence sys-
temfromMoscow.
Mr Erdogan, who on Sunday began a
visittoAlgeria,GambiaandSenegal,has

also sought to expand Turkey’s foot-

printinAfrica.

The Turkish president’s most surpris-

ing movewas the decision o wadet

deeper into theLibyan conflict y send-b

ing military advisers — and Turkish-

backedSyrianmercenaries—tosupport

the besieged UN-backed government in

Tripoli, once again putting Ankara on

theopposingsidetotheUAEandEgypt.

The intervention secured Turkey’s

wishforaseatatthetoptableintalkson

the future of the war-torn country but

triggered stern rebukes from Washing-

ton and European capitals. It has also

antagonisedGulfpowers.

“Saudi Arabia and the UAE have the

view of Turkey that it is becoming an

enemy of sorts, a destabilising force,”

said Abdulkhaleq Abdulla, an Emirati

commentator.

Sinan Ulgen, a former Turkish diplo-

mat who chairs the Edam think-tank

Istanbul, said it was “inevitable” that

any Turkish leaderin recent years

would have wanted to reassess the

nation’splaceinachangingworld.

Western nations were partly to blame

for the acrimonious nature of the shift,

he said, with the “collapse” of Ankara’s

relationship with the US and the “total

ineffectiveness” of the EU as an alterna-

tive security partner for Ankara. “As a

result, Turkey felt it had to be more

active in trying to address its own secu-

rityconcerns.”

Mr Ulgen said that the acrimony

caused by Turkey’s foreign policy read-

justment had been compounded by the

erosion of fundamental freedoms in the

country over the past decade, which has

alarmedEUandUSofficials.

Foreign policy has also become

increasingly intertwined with domestic

politics, as Mr Erdogan has often sought

to antagonise western nations to but-

tresspublicsupport.

Turkey once courted the EU but

many senior officials in Ankara now

view Europe with contempt and doubt

Brussels was ever serious about admit-

ting it to the bloc. Railing against EU

statements that Turkish efforts to drill

for gas in waters near Cyprus were ille-

gal, one senior official asked: “Why do

theygettherighttodecide?”

But even if that stance resonates

widely in Turkey, Mr Erdogan is con-

strained by his country’s continued reli-

ance on the west as a trade partner and

source of foreign investment. That was

vividly illustrated in 2018 when the

country was plunged into a currency

crisis after US president Donald Trump

imposed economic sanctions to force

theresolutionofadiplomaticdispute.

“Turkey is diversifying its partners in

security and defence but not in [the]

economy,” said Ilke Toygur, an analyst

attheElcanoRoyalInstitutethink-tank.

“Soifitdamagesitsrelationship[with

the west] because of its security inter-

ests or unilateral moves, it also risks

becomingeconomicallyvulnerable.”

Additional reporting by Andrew England in

London

H E BA SA L E H —C A I R O

Renewed fighting in Libya ended a two-

week ceasefire, as the UN warned that

more weapons from international

backers of the two warring sides were

entering the country.

Forces of GenKhalifa Haftar’s self-

styled Libyan National Army marched

westwards from Sirte at the weekend

and clashed with militias from Misu-

rata, the city that provides many of the

fighters defending the UN-backed Gov-

ernmentofNationalAccordinTripoli.

The LNA briefly seized the town of

Abugrain, 120km east of Misurata,

beforeitwasforcedtoretreat.

In response, the GNA yesterday

denounced what it called ceasefire vio-

lations by Gen Haftar’s troops. It

accused the LNA of launching missile

attacks at civilian targets in Tripoli,

including Mitiga, the capital’s only func-

tioning airport, and said it might not

participateinfutureceasefiretalks.

Fayez al-Sarraj, head of the GNA,

signed a ceasefire agreement in Moscow

this month but Gen Haftar refused. A

shakytruceheldaftermoretalksinBer-

lin failed to reach a lasting agreement

butGenHaftarmaintainedhisblockade

onoilexports,quicklyerodingfaiththat

thereductioninhostilitiesmightlast.

Ahmed al-Mismari, the LNA spokes-

man,said:“Thereisonlyamilitarysolu-

tion because these militias [protecting

the GNA] will never hand over their

weapons or submit to the security coun-

cilortheUN.”

Hostilities flared as the UN

denounced “continued, blatant viola-

tions” of an arms embargo on Libya by

countriesthathadagreedtoobservethe

banduringthetalksinGermany.

“Over the last 10 days, numerous

cargo and other flights have been

observed landing at Libyan airports in

the western and eastern parts of the

country providing the parties with

advanced weapons, armoured vehicles,

advisers and fighters,” the UN mission

inLibyasaidonSaturday.

“The mission condemns these ongo-

ing violations, which risk plunging the

country into a renewed and intensified

roundoffighting.”

The UN did not name the countries

violating the embargo. Turkey has pre-

viously publicised its military support

fortheGNAandUNexpertshaveidenti-

fied the United Arab Emirates, which

backs Gen Haftar, as a violator of the

embargointhepast.Analystsanddiplo-

mats say Abu Dhabi has been a driving

force behind the LNA, providing weap-

ons, including drones, and officers to

operate them. Gen Haftar also enjoys

thebackingofEgypt,FranceandRussia.

Jalel Harchaoui, a Libya specialistat

theClingendaelInstitute,aDutchthink-

tank, said open-source flight trackers

showedheavyrecenttrafficbetweenthe

UAE and airports in eastern Libya, sug-

gesting large weapons transfers to the

LNA. For its part, Turkey had been

equipping the GNA with “defensive

weapons” such as jamming equipment

to disable Emirati drones and air

defencesystems,headded.

Erdogan’s assertive foreign policy

angers Arab and European leaders

Interventions in Syria and Libya resonate at home but risk Turkey’s economic ties with US and EU

North Africa

Fighting

resumes in

Libya after

two-week

ceasefire

‘Saudi Arabia and the

UAE have the view of

Turkey that it is becoming

an enemy of sorts’

Recep Tayyip

Erdogan,

evaluating his

government’s

performance

in Ankara this

month, has

ruffled feathers

with European

leaders such as

Emmanuel

Macron and

Angela Merkel

Adem Altan/AFP/Getty

‘Turkey felt

it had to be

more active

in trying to

address

its own

security

concerns’

Sinan Ulgen,

Turkey analyst

J O S E P H C OT T E R I L L —J O H A N N E S B U R G

A hacker at the centre of the biggest
information leak in world football has
claimed responsibility for the release of
documents that have rocked the busi-
ness empire ofIsabel dos Santos,
Africa’s richest woman.

Rui Pinto, a Portuguese awaiting trial
over the hack at Europe’s top football
clubs, supplied the documents, pub-
lished this month, that revealed some of
the structures used by the daughter of
Angola’s former president to amass her
$2b fortune, an African whistleblowing
organisationsaidyesterday.
Mr Pinto, founder of the Football
Leaks website, “wanted to expose activ-
ities that are illegal or contrary to public
interest”, said the Platform to Protect
WhistleblowersinAfrica.
The International Consortium of
Journalists, which published the Angola
leaks, said the documents shared by Mr
Pinto show how Ms dos Santos used her
position as the president’s daughter and
chairofSonangol,thestateoilcompany,
tolootnationalresources.
Ms dos Santos has denied wrongdoing
and has called the leaks and her indict-
ment on charges of money laundering
a “concentrated, orchestrated and

well-co-ordinated political attack”.

oséEduardodosSantossteppeddownJ

as president in 2017 after 38 years in

power. João Lourenço, his successor,

removed Ms dos Santos as head of

Sonangol and this month froze her

assets after prosecutors said she and

Sindika Dokolo, her Congolese art col-

lector husband, had failed to return

morethan$1bninstatefunds.

The platform said the fact that Mr

Pinto, who is being held in Portugal, was

the source of the documents showed the

leak“wasnotpoliticallymotivated”.

William Bourdon, Mr Pinto’s lawyer

who also co-founded the platform, said:

“These revelations should allow for new

investigations to be launched and thus

help in the fight against impunity for

financial crimes in Angola and in the

world.”

Mr Pinto, who was arrested last year

on charges including attempted extor-

tionandhacking,denieswrongdoing.

Angola

Football hacker emerges as

source of dos Santos leaks

‘These revelations should

help in the fight against

impunity for financial

crimes in the world’

JANUARY 28 2020 Section:World Time: 1/202027/ - 19:35 User:sanjay.gohil Page Name:WORLD2, Part,Page,Edition:LON, 6, 1