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)
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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.



Here’s What to Watch as Election Day Approaches in the US

People cast their ballots on the last day of early voting for the general election in Michigan at the Livingston Educational Service Agency in Howell, Michigan on November 3, 2024. (AFP)
People cast their ballots on the last day of early voting for the general election in Michigan at the Livingston Educational Service Agency in Howell, Michigan on November 3, 2024. (AFP)
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Here’s What to Watch as Election Day Approaches in the US

People cast their ballots on the last day of early voting for the general election in Michigan at the Livingston Educational Service Agency in Howell, Michigan on November 3, 2024. (AFP)
People cast their ballots on the last day of early voting for the general election in Michigan at the Livingston Educational Service Agency in Howell, Michigan on November 3, 2024. (AFP)

Election Day is nearly upon us. In a matter of hours, the final votes in the 2024 presidential election will be cast.

In a deeply divided nation, the election is a true toss-up between Democrat Kamala Harris and Republican Donald Trump.

We know there are seven battleground states that will decide the outcome, barring a major surprise. But major questions persist about the timing of the results, the makeup of the electorate, the influx of misinformation — even the possibility of political violence. At the same time, both sides are prepared for a protracted legal battle that could complicate things further.

Here's what to watch on the eve of Election Day 2024:

History will be made either way

Given all the twists and turns in recent months, it's easy to overlook the historical significance of this election.

Harris would become the first female president in the United States' 248-year history. She would also be the first Black woman and person of South Asian descent to hold the office. Harris and her campaign have largely played down gender and race fearing that they might alienate some supporters. But the significance of a Harris win would not be lost on historians.

A Trump victory would represent a different kind of historical accomplishment. He would become the first person convicted of a felony elected to the US presidency, having been convicted of 34 felony counts in a New York hush-money case little more than five months ago.

Trump, who is still facing felony charges in at least two separate criminal cases, argued that he is the victim of a politicized justice system. And tens of millions of voters apparently believe him — or they're willing to overlook his extraordinary legal baggage.

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

How long will it take to know the winner? Election Day in the United States is now often considered election week as each state follows its own rules and practices for counting ballots — not to mention the legal challenges — that can delay the results. But the truth is, nobody knows how long it will take for the winner to be announced this time.

In 2020, The Associated Press declared President Joe Biden the winner on Saturday afternoon — four days after polls closed. But even then, The AP called North Carolina for Trump 10 days after Election Day and Georgia for Biden 16 days later after hand recounts.

Four years earlier, the 2016 election was decided just hours after most polls closed. The AP declared Trump the winner on election night at 2:29 a.m. (it was technically Wednesday morning on the East Coast).

This time, both campaigns believe the race is extremely close across the seven swing states that are expected to decide the election, barring a major surprise: Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin.

The size of the map and the tightness of the race make it hard to predict when a winner could be declared.

Where can I find early clues about how the contest might unfold? Look to two East Coast battleground states, North Carolina and Georgia, where the results could come in relatively quickly. That doesn't mean we'll get the final results in those states quickly if the returns are close, but they are the first swing states that might offer a sense of what kind of night we're in for.

To go deeper, look to urban and suburban areas in the industrial North and Southeast, where Democrats have made gains since 2020.

In North Carolina, Harris’ margins in Wake and Mecklenburg Counties, home to the state capital of Raleigh and the state’s largest city, Charlotte, respectively, will reveal how much Trump will need to squeeze out of the less-populated rural areas he has dominated.

In Pennsylvania, Harris needs heavy turnout in deep blue Philadelphia, but she's also looking to boost the Democrats’ advantage in the arc of suburban counties to the north and west of the city. She has campaigned aggressively in Bucks, Chester, Delaware and Montgomery counties, where Biden improved on Clinton’s 2016 winning margins. The Philadelphia metro area, including the four collar counties, accounts for 43 percent of Pennsylvania’s vote.

Elsewhere in the Blue Wall, Trump needs to blunt Democratic growth in Michigan's key suburban counties outside of Detroit, especially Oakland County. He faces the same challenge in Wisconsin's Waukesha County outside of Milwaukee.

Former US President and Republican presidential candidate Donald Trump pumps his fist after speaking at the end of a campaign rally at Atrium Health Amphitheater in Macon, Georgia, on November 3, 2024. (AFP)

Where are the candidates? Trump will likely spend the very early hours of Election Day in Michigan, where he is scheduled to hold a final late-night rally in Grand Rapids as has become his tradition.

The Republican candidate plans to spend the rest of the day in Florida, where he is expected to vote in person -- despite previously saying he would vote early. He's scheduled to hold a campaign watch party in Palm Beach Tuesday night.

Harris plans to attend an Election Night party at Howard University in Washington, a historically Black university where she graduated with a degree in economics and political science in 1986 and was an active member of Alpha Kappa Alpha sorority.

Aside from Howard, she has no public schedule announced for Election Day.

Harris said Sunday that she had “just filled out” her mail-in ballot and it was “on its way to California.”

Who's left to show up on Election Day? On the eve of Election Day, it's unclear which voters will show up to cast ballots on Tuesday.

More than 77 million people participated in early voting — either in person or through the mail. So many people already cast ballots that some officials say the polls in states like Georgia might be a “ghost town” on Election Day.

One major reason for the surge is that that Trump has generally encouraged his supporters to vote early this time, a reversal from 2020 when he called on Republicans to vote only in-person on Election Day. The early vote numbers confirm that millions of Republicans have heeded Trump's call in recent weeks.

The key question, however, is whether the surge of Republicans who voted early this time will ultimately cannibalize the number of Republicans who show up on Tuesday.

There are also shifts on the Democratic side. Four years ago, as the pandemic lingered, Democrats overwhelmingly cast their ballots early. But this time around, without the public health risk, it's likely that more Democrats will show up in person on Election Day.

That balance on both sides is critical as we try to understand the early returns. And it's on the campaigns to know which voters they still need to turn out on Tuesday. On that front, Democrats may have an advantage.

Trump's campaign and the Republican National Committee have outsourced much of their get-out-the-vote operation to outside groups, including one funded largely by billionaire Trump ally Elon Musk that’s facing new questions about its practices. Harris’ campaign, by contrast, is running a more traditional operation that features more than 2,500 paid staffers and 357 offices in battleground states alone.

Chocolate bars with the faces of Democratic presidential nominee US Vice President Kamala Harris and Republican presidential nominee and former US President Donald Trump are displayed at a store in John F. Kennedy International Airport, New York, US, October 25, 2024. (Reuters)

Could there be unrest? Trump has been aggressively promoting baseless claims in recent days questioning the integrity of the election. He falsely insists that he can lose only if Democrats cheat, even as polls show that show the race is a true toss-up.

Trump could again claim victory on election night regardless of the results, just as he did in 2020.

Such rhetoric can have serious consequences as the nation saw when Trump loyalists stormed the Capitol on Jan. 6, 2021 in one of the darkest days in modern American history. And unfortunately, there is still a potential of further violence this election season.

The Republican National Committee will have thousands of “election integrity” poll monitors in place on Tuesday searching for any signs of fraud, which critics fear could lead to harassment of voters or election workers. In some key voting places, officials have requested the presence of sheriff deputies in addition to bulletproof glass and panic buttons that connect poll managers to a local 911 dispatcher.

At the same time, Trump allies note that he has faced two assassination attempts in recent months that raise the possibility of further threats against him. And police in Washington and other cities are preparing for the possibility of serious Election Day unrest.

As always, it's worth noting that a broad coalition of top government and industry officials, many of them Republicans, found that the 2020 election was the “most secure” in American history.”