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Italy’s Meloni basks in G7 limelight with Western leaders

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Two contrasting accommodation options were presented for the G7 summit in Puglia, Italy: the luxurious Borgo Egnazia resort, known for hosting celebrities like Madonna and the Beckhams, and a deteriorating ship moored off Brindisi for the 2,600 police officers, criticized for its appalling conditions. The resort houses world leaders, while the ship, costing the Italian government €6m and now under fraud investigation, exemplifies the disparity in treatment.

Italian Prime Minister Giorgia Meloni, buoyed by her party’s success in the European elections, hosts the summit, highlighting Italy’s newfound political stability compared to other G7 nations facing political turmoil. Meloni’s government is portrayed as the strongest amidst leaders like Biden, Sunak, and Trudeau, who are struggling domestically.

Low expectations surround the summit due to the precarious political climate in many G7 countries. However, a significant plan to loan Ukraine $50bn from frozen Russian assets is anticipated. Additionally, Sunak will announce substantial support for Ukraine’s energy and humanitarian needs.

Sessions will address the climate crisis, investment in Africa, the Middle East ceasefire, and AI regulation, with Pope Francis attending for the first time. Efforts to broaden global consensus include inviting leaders from Brazil, Turkey, Saudi Arabia, and Algeria. Locals in Puglia, like ice-cream maker Vincenzo Iannacone, express pride and excitement for the summit, hoping it brings positive attention to their region.

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Eurozone cuts interest rate for first time in 5 years

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The European Union has become the second major economy this week to reduce its lending rate, indicating progress in addressing inflation. The European Central Bank (ECB) cut its main interest rate from a record high of 4% to 3.75%, following Canada’s decision to lower its official rate on Wednesday. This decision coincides with EU-wide elections, reflecting public discontent over living costs.

ECB President Christine Lagarde stated that the inflation outlook has significantly improved, allowing for the rate cut. However, she cautioned that inflation would likely remain above the 2% target “well into next year,” averaging 2.5% in 2024 and 2.2% in 2025. Lagarde emphasized that the ECB would maintain a restrictive interest rate policy as needed to achieve the 2% target, without committing to a specific rate trajectory.

Lindsay James, investment strategist at Quilter Investors, noted that the rate cut was anticipated but still a relief for European consumers and businesses. She mentioned that the ECB’s move precedes potential cuts by the Bank of England and the US Federal Reserve, providing needed economic stimulus.

Despite a slight increase in inflation in May to 2.6% from 2.4% in April, the ECB decided to reduce rates. This follows Canada’s reduction from 5% to 4.75% after their inflation fell to 2.7%. Sweden and Switzerland have also made similar rate cuts.

Lagarde provided a positive economic outlook for the eurozone but warned of challenges such as geopolitical tensions and climate-related risks that could impact growth. Katherine Neiss, chief European economist at PGIM, expressed confidence in further ECB rate cuts over the summer or autumn, potentially lowering eurozone rates to 3.5% or less by year-end. She cited sluggish economic recovery, slowing inflation, and easing wage growth as justification for additional cuts.

In the UK, speculation exists that the Bank of England might reduce rates as early as this month, with inflation down to 2.3% from its peak over 11% in late 2022. The International Monetary Fund recommended cutting UK rates from 5.25% to 3.5% by year-end. However, George Godber from Polar Capital suggested that the upcoming UK election could complicate the Bank’s rate decision on June 20, as political considerations might influence the outcome.

The US Federal Reserve is also expected to reduce rates soon, with the current US inflation rate at 3.4%. Godber predicted that the Fed would act before the November election.

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Finnish presidential candidate surprised at renewed focus on his sexuality

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Finnish presidential candidate Pekka Haavisto has expressed surprise and dismay at the sudden focus on his sexuality in the final days of campaigning before Sunday’s election, particularly by journalists from the national broadcaster, Yle. Haavisto, who could become Finland’s first Green and first gay president, noted that while his sexual identity was discussed in his 2012 campaign, it hadn’t been a central topic this time until the second round of voting.

He questioned why his sexuality had become an issue now and suggested that some journalists’ active pursuit of the topic raised questions. This comes after a poll found that a third of voters wouldn’t support him because he is gay. Despite this, Haavisto has been gaining ground on his rival, Alexander Stubb, according to the latest Yle poll, though he still trails 46-54%.

The campaign has also seen debate over nuclear weapons, with Haavisto opposing their storage in Finland, while Stubb advocates for a change in the law. Both candidates have diverse support bases, with Stubb favored among pensioners and Haavisto drawing support from younger voters, making turnout crucial for him.

As the campaign enters its final days, Haavisto continues to engage with voters, particularly focusing on female and young voters. If elected, he aims to prioritize addressing the climate crisis on the global stage, seeking to form an informal coalition to pressure international bodies for urgent action.

Haavisto is surprised by the sudden focus on his sexuality in the campaign’s final days, believes it to be an artificial topic, and remains committed to his platform of climate action and engagement with voters ahead of the election.

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Greek Wildfires: Summer Camp Evacuates 1,200 Children as Fire Approaches

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A summer camp in Greece has been forced to evacuate over a thousand children due to raging wildfires that have erupted in the country. As Greece endures a scorching Mediterranean heatwave, two separate blazes are spreading rapidly.

In the town of Loutraki, situated west of Athens, flames advanced towards the camp, prompting the evacuation of 1,200 children. In another incident, a man suspected of starting a fire in Kouvaras, southeast of the capital, was arrested by the police. Emergency service crews have assisted numerous individuals in evacuating their homes in the affected areas.

Several animals, including horses housed in stables, were also evacuated. The Greek government has stated that affected homeowners are eligible for temporary accommodation in local hotels and will be compensated later. Despite the efforts of hundreds of firefighters contending with strong winds, the fires continue to spread.

The situation has led to transportation disruptions, with sections of the Athens-Corinth national highway closed by the police and some train services affected. While it is suspected that at least one fire was intentionally started, scientists emphasize that such extreme weather events are becoming more frequent and intense due to global warming.

The intense regional heatwave shows no signs of abating, according to weather reports, and the risk of further fires remains high, as warned by the Greek meteorological service. Thick smoke, damaged houses, and cars were depicted on Greek television, reflecting the destruction caused by the wildfires. Greece has experienced temperatures surpassing 40°C (104°F) in recent days, leading to precautions such as the temporary closure of the Acropolis.

Neighboring countries like Italy and Spain are also facing unusually high temperatures, and further heat records are expected to be broken in the coming days throughout the region.

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