Some European Firms Retreat from Israel-Linked Finance amid War Pressure

 An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
TT

Some European Firms Retreat from Israel-Linked Finance amid War Pressure

 An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)
An Israeli national flag flies over a city highway during rush hour, amid the ongoing conflict in Gaza between Israel and Hamas, in Tel Aviv, Israel, November 4, 2024. (Reuters)

Several of Europe's biggest financial firms have cut back their links to Israeli companies or those with ties to the country, a Reuters analysis of filings shows, as pressure mounts from activists and governments to end the war in Gaza.

While banks and insurers are often vocal about their environmental and governance aims, they are less forthcoming about disclosing their potential exposure to war.

UniCredit put Israel on a "forbidden" list as the conflict escalated in October last year, said a source familiar with the matter, confirming a study by Dutch NGO PAX.

While in line with the Italian bank's defense-sector policy of not directly financing arms exports to any country involved in conflict, it goes beyond Italy's guidelines on arms exports to Israel.

UniCredit declined to comment on its move and the Israeli finance ministry also declined to comment.

Meanwhile, Norwegian asset manager Storebrand and French insurer AXA have sold shares of some Israeli firms, including banks.

Although corporate filings offer only a glimpse into such exposures, they show companies have been readjusting.

"We don't know whether this represents the beginning of a shift in the industry, one that recognizes the power banks have in choosing where to allocate capital, and where not," said Martin Rohner, executive director at the Global Alliance for Banking on Values, which focuses on sustainable financing.

"Investing in the production and trade of weapons is fundamentally opposed to the principles of sustainable development," Rohner added.

Israeli Finance Minister Bezalel Smotrich told a press briefing last week that although there are challenges to Israel's economy, firms are still raising money. "I sit with foreign investors and they believe in our economy," he said.

Reuters has reported that Israel's investor base has narrowed since it entered Gaza last year in response to attacks by Hamas, and it is feeling the effects of rising borrowing costs.

The potential wider effects can be seen in the approach taken by Storebrand, which a filing showed divested a holding worth about $24 million in Palantir, citing the risk of violations of international humanitarian law and human rights.

US group Palantir, which provides technology to Israel's military, did not respond to a request for comment.

Storebrand's annual investment review said that, as of the end of 2023, it had excluded 24 firms, including Israeli companies, across its portfolios in relation to the occupation of Palestinian territories.

The International Court of Justice, the United Nations' highest court, ruled in January of plausible risk of irreparable harm to Palestinian rights to be protected from genocide.

The same court said in July that Israel's occupation of Palestinian territories including the settlements is illegal.

Israel has rejected the rulings, which combined with growing pressure from activists and governments, are nevertheless having an impact on investment decisions.

AXA, one of Europe's largest insurers, British bank Barclays and German insurer Allianz have increasingly been targeted by campaigners.

"Increasing demand for greater transparency and scrutiny can only mean that financial institutions will intensify and broaden their self-assessment of their commercial associations with arms-related businesses or states," said David Kinley, professor and chair of human rights law at the Sydney law school.

The Ireland Strategic Investment Fund (ISIF) has exited six Israeli companies, selling holdings which amounted to about 3 million euros ($3.26 million), including some of Israel's largest banks, a spokesperson told Reuters.

Earlier this year, the 15-billion-euro Irish fund said that the risk profile of such investments were no longer within its investment parameters.

And Norway's $1.8 trillion wealth fund, the world's biggest, may divest shares of companies that aid Israel's operations in the occupied Palestinian territories which violate its ethics standards for businesses.

WAR EXPOSURE

Investments in Israeli banks are also under scrutiny.

The UN included them in 2020 in a list of companies with ties to settlements in the occupied Palestinian territories as part of its mission to review the implications on Palestinian rights.

A study by research firm Profundo, commissioned by corporate watchdog Ekō, shows that AXA sold almost all of its holdings in Israeli banks stocks earlier this year, retaining only a marginal stake in Bank Leumi.

Reuters verified the data with LSEG. A representative for Bank Leumi did not respond to a request for comment.

A spokesperson for AXA declined to comment on whether AXA had cut its holdings, adding that it is not invested in the banks targeted by activists. The UN list is among the criteria AXA takes into account for investment decisions, they added.

'A CLEAR LINE'

Foreign direct investment into Israel fell by 29% in 2023 to its lowest since 2016, UN Trade and Development data shows.

While UNCTAD 2024 figures are not available, credit ratings agencies have flagged the war's unpredictable impact on investment in Israel as a concern.

Although the US remains Israel's biggest military and financial backer, Spain, Ireland and Norway have recognized a Palestinian state, French President Emmanuel Macron has called for an arms export halt and Britain has suspended some licenses.

When it comes to international politics, "it should be down to the governments to take a clear line," said Richard Portes, professor of economics at London Business School, adding: "To put the burden on the private firms, where does this end?"

In an example of how activists are targeting companies directly, Barclays came under pressure from a campaign in Britain, prompting it to withdraw sponsorship from summer music festivals, while the Financial Times reported in August that it considered pulling out of an Israeli government bond sale.

Barclays said in a statement that it remained "fully committed" to its role as a primary dealer and that such activities fluctuated each quarter. The bank fell out of the top five dealers of Israeli bonds in the second and third quarters, after ranking third in 2023.



A Presidential Campaign Unlike Any Other Ends on Tuesday. Here’s How We Got Here

Former US President and Republican presidential candidate Donald Trump speaks during a campaign rally at Atrium Health Amphitheater in Macon, Georgia, on November 3, 2024. (AFP)
Former US President and Republican presidential candidate Donald Trump speaks during a campaign rally at Atrium Health Amphitheater in Macon, Georgia, on November 3, 2024. (AFP)
TT

A Presidential Campaign Unlike Any Other Ends on Tuesday. Here’s How We Got Here

Former US President and Republican presidential candidate Donald Trump speaks during a campaign rally at Atrium Health Amphitheater in Macon, Georgia, on November 3, 2024. (AFP)
Former US President and Republican presidential candidate Donald Trump speaks during a campaign rally at Atrium Health Amphitheater in Macon, Georgia, on November 3, 2024. (AFP)

It's the election that no one could have foreseen.

Not so long ago, Donald Trump was marinating in self-pity at Mar-a-Lago after being impeached twice and voted out of the White House. Even some of his closest allies were looking forward to a future without the charismatic yet erratic billionaire leading the Republican Party, especially after his failed attempt to overturn an election ended in violence and shame. When Trump announced his comeback bid two years ago, the New York Post buried the article on page 26.

At the same time, Kamala Harris was languishing as a low-profile sidekick to President Joe Biden. Once seen as a rising star in the Democratic Party, she struggled with both her profile and her portfolio, disappointing her supporters and delighting her critics. No one was talking about Harris running for the top job — they were wondering if Biden should replace her as his running mate when he sought a second term.

But on Tuesday, improbable as it may have seemed before, Americans will choose either Trump or Harris to serve as the next president. It’s the final chapter in one of the most bewildering, unpredictable and consequential sagas in political history. For once, the word “unprecedented” has not been overused.

“If someone had told you ahead of time what was going to happen in this election, and you tried to sell it as a book, no one would believe it,” said Neil Newhouse, a Republican pollster with more than four decades of experience. “It’s energized the country and it’s polarized the country. And all we can hope is that we come out of it better in the end.”

Supporters of former US President and Republican presidential candidate Donald Trump participate in a caravan to show their support in West Palm Beach, Florida, on November 3, 2024. (AFP)

History was and will be made. The United States has never elected a president who has been convicted of a crime. Trump survived not one but two assassination attempts. Biden dropped out in the middle of an election year and Harris could become the first female president. Fundamental tenets about democracy in the most powerful nation on earth will be tested like no time since the Civil War.

And that’s not to mention the backdrop of simultaneous conflicts in Europe and the Middle East, hacking by foreign governments, an increasingly normalized blizzard of misinformation and the intimate involvement of the world’s richest man, Elon Musk.

For now, the only thing the country can agree on is that no one knows how the story will end.

Trump rebounded from disgrace to the Republican nomination

Republicans could have been finished with Trump after Jan. 6, 2021.

That's the day he fired up his supporters with false claims of voter fraud, directed them to march on the US Capitol while Congress was ceremonially certifying Biden's election victory, and then stood by as rioting threatened lawmakers and his own vice president.

But not enough Republicans joined with Democrats to convict Trump in an impeachment trial, clearing a path for him to run for office again.

Trump started planning a comeback even as some leaders in his party hoped he would be eclipsed by Ron DeSantis, the Florida governor, or Nikki Haley, the former South Carolina governor who served as Trump's ambassador to the United Nations.

In the year after Trump announced that he would run against Biden, he faced criminal charges four times. Two of the indictments were connected to his attempts to overturn his election defeat. Another involved his refusal to return classified documents to the federal government after leaving office. Trump has pleaded not guilty to all the charges, and none of those cases have been resolved.

However, a fourth indictment in New York led to Trump becoming the first president in US history to be criminally convicted. A jury found him guilty on May 30 of falsifying business records over hush money payments to a porn star who claimed they had an affair.

Supporters listen to Republican presidential nominee, former President Donald Trump as he speaks during a campaign rally at the Atrium Health Amphitheater on November 03, 2024 in Macon, Georgia. (Getty Images/AFP)

None of it slowed Trump, who practically ignored his opponents during the primary as he barreled toward the Republican presidential nomination. A mugshot from one of his arrests was adopted by his followers as a symbol of resisting a corrupt system.

Trump's candidacy capitalized on anger over inflation and frustration about migrants crossing the southern border. He also hammered Biden as too old for the job even though he's only four years younger than the president.

But Democrats also thought Biden, 81, would be better off considering retirement than a second term. So when Biden struggled through a presidential debate on June 27 — losing his train of thought, appearing confused, stammering through answers — he faced escalating pressure within his party to drop out of the race.

As Biden faced a political crisis, Trump went to an outdoor rally in Butler, Pennsylvania on July 13. A young man evaded police, climbed to the top of a nearby building and fired several shots with a semiautomatic rifle.

Trump grabbed at his ear and dropped to the stage. While Secret Service agents crowded around him, he lurched to his feet with a streak of blood across his face, thrust his fist in the air and shouted “fight, fight, fight!” An American flag billowed overhead.

It was an instantly iconic moment. Trump's path to the White House seemed clearer than ever — perhaps even inevitable.

Harris gets an unexpected opportunity at redemption

The vice president was getting ready to do a puzzle with her nieces on the morning of July 21 when Biden called. He had decided to end his reelection bid and endorse Harris as his replacement.

She spent the rest of the day making dozens of phone calls to line up support, and she had enough to secure the nomination within two days.

It was a startling reversal of fortune. Harris had flamed out when running for president four years earlier, dropping out before the first Democratic primary contest. Biden resuscitated her political career by choosing her as his running mate, and she became the first woman, Black person and person of South Asian descent to serve as vice president.

But Harris' struggles did not end there. She fumbled questions about immigration, oversaw widespread turnover in her office and faded into the background rather than use her historic status as a platform.

All of that started to change on June 24, 2022, when the US Supreme Court overturned the nationwide right to abortion enshrined by Roe v. Wade. Harris became the White House's top advocate on an issue that reshaped American politics.

US Vice President and Democratic presidential nominee Kamala Harris walks on stage as she arrives for a campaign rally at Michigan State University's Jenison Field House in East Lansing, Michigan, on November 3, 2024. (AFP)

She also proved to be more nimble than before. Shortly after returning from a weeklong trip to Africa, her team orchestrated a spur-of-the-moment venture to Nashville so Harris could show support for two Tennessee lawmakers who had been expelled for protesting for gun control.

Meanwhile, Harris was networking with local politicians, business leaders and cultural figures to gain ideas and build connections. When Biden dropped out, she was better positioned than many realized to seize the moment.

The day after she became the candidate, Harris jetted to Wilmington, Delaware to visit campaign headquarters. Staff members had spent the morning printing “Kamala” and “Harris for President” signs to tape up next to obsolete “Biden-Harris” posters.

There were 106 days until the end of the election.

The battle between Trump and Harris will reshape the country While speaking to campaign staff in Wilmington, Harris used a line that has become a mantra, chanted by supporters at rallies across the country. “We are not going back,” she declared.

A mariachi performer wears a pin for Democratic candidate for president US Vice President Kamala Harris at an election event for her and Democratic candidate for US Senate Ruben Gallego at Ocotillo in Phoenix, Arizona, USA, 03 November 2024. (EPA)

It's a fitting counterpoint to Trump's slogan, “make America great again,” which he has wielded since launching his first campaign more than eight years ago.

The two candidates have almost nothing in common, something that was on display on Sept. 10, when Harris and Trump met for the first time for their only televised debate.

Harris promised to restore abortion rights and use tax breaks to support small businesses and families. She said she would “be a president for all Americans.”

Trump took credit for nominating the justices that helped overturn Roe, pledged to protect the US economy with tariffs and made false claims about migrants eating people's pets. He called Harris “the worst vice president in the history of our country.”

Harris was widely viewed as gaining the upper hand. Trump insisted he won but refused a second debate. The race remained remarkably close.

Pundits and pollsters have spent the final weeks straining to identify any shift in the candidates' chances. Microscopic changes in public opinion could swing the outcome of the election. It might take days to count enough votes to determine who wins.

The outcome, whenever it becomes clear, could be just another surprise in a campaign that's been full of them.