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In Athens, swathed in the oppressive heat of an August evening, I’m drinking with a few ill-starred Greeks stuck in town for the holidays. Shops and restaurants are shut and most of the capital has fled to the sea. Breathing in the acrid city fumes, lukewarm beers in hand, my friends speak longingly of their favourite islands, exhaling the names like incantations; Samothraki, Donousa, Gavdos, Anafi. The Athenian night weighs heavier as they conjure images of the bluest waters, highest rocks and strongest winds, not to mention the best roasted goat. I sit and listen, praying for the slightest breeze, recalling my own week by the sea.
For centuries, the Greek islands have been a beautiful blue-and-white canvas on which to project the human desire to escape. From the 17th-century Grand Tourists to the architectural-ruin enthusiasts of the early 20th, travellers found on the islands a release from the pressures of urban living, and the promise of a simpler existence. Above all, they revelled in their geographic remoteness. Nowadays, foreigners can catch direct flights to at least a dozen of them, a development that somewhat erodes their unique selling point. Tellingly, the common thread uniting my friends’ most treasured islands is their inaccessibility: a nine-hour ferry ride is a small price to pay for paradise, or at least an island unmarred by mass tourism.
My own paradise is the easternmost island of the Cyclades, the mountainous Amorgos. After a windy night on the hard floor of the deck, the ferry draws slowly into the island’s natural southern port of Katapola. Ahead the mountains loom, their peaks obscured by a thin mist. Amorgos resembles a giant dragon in repose, its spine 32km in length, ranging from the southern tip of Kalotaritissa to the 820m-high summit of Krokolos in the north. The western stretch is made up of low inlets and bays, while the east is one vertiginous, wind-battered cliff.
Katapola and its northern counterpart Aegiali are the two largest settlements. Breaking up a harsh expanse of hills and ridges between them are a few smatterings of villages that, on mistier days, when the sky dissolves into the rocks, appear suspended by the winds. The largest is Chora, the island’s capital. In the Hellenic and Roman eras, island towns were built closer to sea level. But with the dark ages came pirates and invaders, and settlements moved into the hills.
Feet on dry land at last, I stumble a few hundred metres along the port to the Pension Amorgos, old Kyria Maria’s place. My top-floor room, with its alcove bed and pistachio- and violet-painted shutters, is modestly sized, but has an enormous, whitewashed terrace looking out over the water. I wake to the tap of mast wires from the sailboats that have moored overnight, and the laughter of children as they cycle up and down the port.
Katapola is full of family-run guest houses, surviving thanks to the scarcity of luxury hotel developments. Amorgos offers its own singular brand of luxury in the form of Vorina Ktismata, a boutique hotel that crouches low in the hills on the edge of Chora. Its elemental architecture is indistinguishable from the rest of the medieval village, but its interiors are cutting-edge, with large windows looking out over the expanse of rock and sea. Airbnb hasn’t caught on here with the same voracity as on other islands, but a number of houses are available to rent, replete with antique furniture, lace curtains and complimentary psimeni raki, the sickly-sweet local liquor.
Thanks to Instagram, we all have a notion of the quintessential Cycladic village: white sugar-cube houses, royal-blue domes and lashings of hot-pink bougainvillea. Strip this down, remove the frills, and you have the Chora of Amorgos. After the 10-minute drive from Katapola, and the same number of hairpin bends, I struggle not to stall my rented Fiat Panda as I park on a steep slope beside the town hall. Outside, groups of young Greeks in identikit bandanas and Birkenstocks wait for the lumbering bus that ferries them along the island’s three roads. Behind them the mountains fade into one another, disappearing in a sherbet haze.
Girls fix their windswept hair in the pharmacy window before disappearing past the church into the village, where the main drag, less than 2m in diameter, snakes up, forking left and right along narrow stairwells, packed tight with spindly tables. As the sun goes down, the walls seem to close in, and the warmth of the day emanates from buildings and bodies. I head out of the narrow streets – where social distancing is near impossible – to Arbaroriza, a restaurant in a small square on the edge of the village. Above, a line of squat, wind-battered windmills stud a dramatic ridge that extends north, overlooking the seething waves far below.
To this day, there has not been a single case of coronavirus reported on Amorgos. Curfew and gathering restrictions imposed on islands such as Mykonos when cases spiked in August seem unimaginable here. But that’s not to say locals were oblivious to risks. Earlier that day I overheard a group of older islanders tut-tutting during their morning swim about the crowds of young people in Chora. Tourists on Amorgos are chiefly French or Italian, with the odd German here and there. This year they are scarce but, despite the pandemic, the island is full of young Greeks on university break or annual leave.
“I like the outsiders; they are more calm,” says Iliana, who runs Arbaroriza. “Greeks are loud,” she laughs. Born in northern Greece, Iliana first visited Amorgos when her elder sister was working in a restaurant for the summer season. She began working summers herself, and fell in love with her now husband, Markos, the son of a local farmer. Iliana cooks with local products, but embellishes with a little more spice, a nod to her grandmother’s Turkish heritage. The dishes are simple: baked feta and homemade peach jam; grilled pork and unreasonably crisp potatoes; and the ambiguous “chickpeas in the oven”, a local staple that melts in your mouth and hums with the flavours of a hundred unidentifiable herbs.
The lack of development on Amorgos coupled with its hostile climate make for an abundance of uniquely potent herbs that grow on the mountainsides. A few businesses harvest wild sage, mint, oregano and thyme, creating packaged teas and essential oils to sell across Greece. Just off the port-front of Katapola, through a low archway, is the Amorgos Botanical Park and bar, set up by two young locals on the site of an old junkyard. Under the shade of plum and orange trees, Marios waters his tomatoes as he points out the herb varieties labelled and planted around the edge of the garden. His friend Rosa makes me a Gin Basil Smash with wild mint. In the evenings, Marios and his partner organise live music nights and film screenings under the trees.
I planned to return for a concert by a jazz trio, but got caught up at the Moonbar Katerina in Xilokeratidi, the village on the opposite side of the bay from Katapola. Beneath the old Almiriki tree, with its spindly branches and salt-caked leaves, sit the tanned hordes, fresh from the sea. Picking at dakos salads and sipping from brown bottles of Mamos beer, they watch the boats sway off the shore and fishermen detangle nets all afternoon long. The loudest table is that of Katerina, the landlady, who first sailed to Amorgos in 1991, looking to start a new life far from the land-locked village where she grew up. Surrounded by her young patrons, she recounts the bar’s origin story, her brown elbows flapping, long sand-coloured hair flying about her shoulders.
When Katerina arrived on the island at the age of 24, she was viewed as an outsider, and a threat to the status quo. For weeks she sat alone in her bar with no custom, until Captain Michalis, a formidable old fisherman and pillar of the community, wandered in. Her voice cracks with emotion as she recalls how the captain used to knock on her window to wake her up in the morning to make his coffee. He came every morning for seven years, and the day he didn’t, she knew he’d died.
Despite that frosty reception, Katerina respected the unwritten rules that govern the island. She explains that customs here are rooted in tradition, in the land, the sea and the church, not in politics or ideology. As the sun sets, its red reach smouldering on the horizon, Katerina beckons me inside and pours us each an unidentified concoction, covers the glasses and slams them against the bar. We toast, and she promises me more stories on my return. I ask what we just drank, and she replies, “You’ll feel it in an hour.”
Above Katapola looms a hill on whose summit once sat an ancient Minoan settlement, believed to be King Minos’s summer palace in the days when Amorgos was under Cretan rule. A single track snakes up the hill, from the top of which you see the western coast unfurl, its southern point faint in the distance. Apart from some rusting fences and a trestle table laden with pottery fragments, there is nothing to indicate the historical significance of the site. The crumbling walls, once a mighty complex of baths, temples and halls, are abandoned to the elements. To one side of the structure lie two enormous marble steps, leading up to a statue of Apollo. Only the sweeping robes of the sun god’s lower half remain. But as the sun beats down it’s easy to picture the steps gleaming white and new again, pillars and roof restored to shelter the lonely figure.
Over an eye-wateringly sweet confection of nuts, honey and pastry, I ask Popi Despotidi, the island’s deputy mayor for culture and tourism, about preservation of the ancient sites. She explains that among locals there’s a laissez-faire attitude towards remains of civilisations past. Those who do care are powerless to take action. Greece’s antiquities are managed by regional Ephorates, which are in turn overseen by a central office in Athens. Despotidi and her colleagues have had multiple meetings in the capital, but the pandemic scuttled any plans for archaeological surveyance.
The best preserved historical site on the island is the Monastery of Hozoviotissa, an architectural feat built into the cliff face 300m above the sea. Constructed in 1017 by a Byzantine emperor, the bright white structure is only visible from the sea, suspended between the water and sky like some surrealist dream. After 320 steps, I reach the entrance, where a local volunteer leads me further up a narrow tunnel-staircase into an antechamber whose walls are obscured by icons of Greek orthodox saints. Up another flight is the chapel itself, an Aladdin’s cave of gilt and gold. One display case is full of Casio watches. I look inquiringly at my guide. “Offerings,” he says simply. A small door leads to a tiny terrace, the view from which is sun-bleached; stepping out, I’m blinded by the high white walls and dazzle of the Aegean. The blue is endless, its aspect always shifting as though a wall of water were thundering towards me.
I leave as quickly as is polite and drive the steep descent to Agia Anna, a rocky inlet beneath the monastery, and a popular swimming spot among locals and nudists. From above I see the tanned bodies sprawled across the rocks, arms and feet protruding here and there from caves and boltholes offering precious centimetres of shade. A group of girls swim to an islet a few hundred metres out, climb to its highest point and issue siren calls to the boys perched above the rocky beach.
This is what we all longed for, back in the suffocating heat and fumes of the Athens night: hours slinking lizard-like from sea to rock and back until the sun disappeared behind the cliffs and the island’s eastern shore was thrown into shade. As long as you can stare uninterrupted into the blue with the sun warm on your back, which island you choose is academic. Paradise is in the depth of the sea, the height of the rocks, the strength of the winds, and how far you are from home.
Ferries travel to Katapola from Piraeus on the mainland and Mykonos (directferries.com). Pension Amorgos, one of many family-run rooms in Katapola, has double rooms at €80 a night (pension-amorgos.com). Vorina Ktismata in Chora has similar rooms and suites with kitchens for €210-310 (vorinaktismata.com). Larger properties, such as Tsalikas in Chora, are available to rent through Airbnb.
Bolsonaro faces investigation over election fraud claims
Brazilian politics updates
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Brazilian president Jair Bolsonaro’s legal problems have multiplied after a court opened an investigation into his unsubstantiated warnings of voter fraud in presidential elections next year, a probe which could lead to him being disqualified from running.
The judicial inquiry comes as the far-right leader’s ratings are on the slide following accusations of his incompetent handling of the Covid-19 pandemic, which has claimed the lives of more than half a million Brazilians.
Rising living costs and allegations of corruption in vaccine procurement within his administration have damaged Bolsonaro’s standing further.
With political pressure building, the populist has increased attacks on the electronic voting system in recent weeks, reiterating calls for the adoption of printed paper receipts in order to avoid manipulation.
Opponents fear the former army captain is seeking to cast doubt on the legitimacy of the vote, in preparation for refusing to recognise a potential defeat. A group of 18 current and former Supreme Court justices have defended the current ballot system, which was introduced in 1996, insisting that Brazil had eliminated election fraud.
The Superior Electoral Court this week opened an administrative probe into Bolsonaro over his claims, for which he has provided no evidence. It also asked the Supreme Court to investigate whether the president had committed a crime by disseminating fake news about the voting system.
The president hit back on Tuesday. “I will not accept intimidation. I will continue to exercise my right as a citizen, to freedom of expression, criticism, to listen, and to meet, above all, the popular will,” Bolsonaro told supporters in Brasília.
The electoral court’s intervention showed the judiciary was striking back against Bolsonaro’s attacks, said Carlos Melo, a political scientist at Insper in São Paulo. “He [Bolsonaro] is harming the rules of the game, of democracy and the institutions,” he added. “It’s not different to what [Donald] Trump did, and demagogues in other countries. His intention is to question the electoral process without proof.”
Both moves by the electoral court could in theory eventually pave the way for Bolsonaro being barred from standing in the 2022 poll.
“There is a long way until this can bring actual legal consequences against the president which might affect his eligibility,” said Rogério Taffarello, a partner in criminal law at Mattos Filho and professor at the Getúlio Vargas Foundation. “[This] does not mean, of course, that the existence of such investigations cannot generate political consequences”.
The president is already the subject of a criminal investigation into whether he failed to act on warnings about alleged irregularities by public officials in negotiations over vaccine purchases. Bolsonaro and the government deny any wrongdoing.
Protesters have taken to the streets in cities over the past two months calling for the impeachment of Bolsonaro, who in polls is trailing former leftwing president Luiz Inácio Lula da Silva, also a likely frontrunner in next year’s election.
Bolsonaro had long promised to present evidence of cheating in elections, even claiming that the 2018 ballot he won was tampered with. Yet last week he admitted to not holding any proof, only “indications”.
Despite his falling popularity, Bolsonaro retains backing in Congress from an amorphous grouping of centre-right political parties known as the Centrão, or “Big Centre”. Analysts said for now this support appeared to be holding.
Additional reporting by Carolina Pulice
South Korea looks to fintech as household debt balloons to $1.6tn
South Korea Economy updates
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After her family business of ferrying drunk people home was hit by closures of bars due to Covid-19 curfews and social distancing, Lee Young-mi* found herself juggling personal debts of about Won30m ($26,000).
The 56-year-old resident of Suncheon in South Korea was already struggling to pay off or refinance four credit cards, but now faces the prospect of those debts rapidly multiplying after her husband was diagnosed with cancer.
“We’ve had little income for more than a year as not many people are out drinking until late into the night,” said Lee. “Now my husband won’t be able to work at all for the next three months after his surgery.”
Lee’s story is playing out across Asia’s fourth-largest economy as self-employed workers, who make up nearly a third of the labour force, have seen their incomes reduced sharply due to coronavirus restrictions. Now, after struggling for years to keep a lid on household debts that hit a record Won1,765tn ($1.6tn) in March, Seoul is looking to fintech companies and peer-to-peer lenders for answers.
Among them is PeopleFund, which touts tech-based investment products backed by machine learning that allow borrowers to refinance their higher-interest loans from banks and credit card companies.
The company has loaned at least $1bn to more than 7,500 customers since it was established in 2015. Its products allow borrowers to switch their debts to fixed-rate, amortised loans at annual interest rates of about 11 per cent, a change from the riskier floating rate, interest-only loans common in South Korea.
PeopleFund has received about Won96.7bn in financing from brokerage CLSA, and along with Lendit and 8Percent is one of the first among the country’s 250 shadow banks to win a peer-to-peer lending licence.
“The country’s most serious household debt problem is with unsecured non-bank loans, whose pricing has been too high. We can offer more affordable loans to ordinary people unable to receive bank loans,” Joey Kim, chief executive of PeopleFund, told the Financial Times.
The proliferation of digital lenders and fintechs in South Korea, where higher-risk borrowers are often cut off from bank financing, has been encouraged by the country’s government.
“We hope that P2P lenders will help resolve the dichotomy in the credit market by increasing the access of low-income people to mid-interest loans,” said an official at the Financial Supervisory Service.
South Korea’s household debt situation has become more pressing since the onset of the pandemic, with increases in borrowing for mortgages, to cover stagnating wages and to invest in the booming stock market. South Korean households are among the world’s most heavily indebted, with the average debt equal to 171.5 per cent of annual income.
South Korea’s household debt-to-GDP ratio stood at 103.8 per cent at the end of last year, compared with an average 62.1 per cent of 43 countries surveyed by the Bank for International Settlements.
Much of the new debt has been risky. Unsecured household loans from non-bank financial institutions were Won116.9tn as of March, up 33 per cent from four years ago, according to the Bank of Korea, much of it high interest loans taken out by poorer borrowers.
Getting on top of the problem has taken on national importance. In a rare warning in June, the central bank said the combination of high asset prices and excessive borrowing risked triggering a sell-off in markets and a rapid debt deleveraging.
“If financial imbalances increase further, this could dent our mid-to-long-term economic growth prospects,” BoK governor Lee Ju-yeol said in July.
The country’s economic planners, however, are struggling to contain debt-fuelled asset bubbles without undermining South Korea’s fragile economic recovery.
The government has attempted to address the danger by tightening lending rules. Regulators in July lowered the country’s maximum legal interest rate that private lenders can charge their customers from 24 to 20 per cent.
Economists caution that rising debt levels increase South Korea’s vulnerability to an economic shock.
They also warn that the asset quality of financial institutions could be hit by a jump in distressed loans when the BoK rolls back monetary easing, expected in the fourth quarter.
“Monetary tightening is needed to curb asset bubbles but this will increase the household debt burden, holding back consumption further,” said Park Chong-hoon, head of research at Standard Chartered in Seoul. “The government is facing a dilemma.”
For Lee Young-mi, however, the 11 per cent rate offered by the PeopleFund is still too high. “I am not sure how to pay back the debt.”
*The name has been changed
European and Chinese stocks rise after calming words from Beijing
Chinese equities updates
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European shares chased gains in China after calls from Beijing for greater co-operation with Washington helped sooth jitters over a regulatory crackdown in the world’s biggest emerging market.
Europe’s Stoxx 600 index rose 0.7 per cent on Monday to hit new all-time highs, while the UK’s FTSE 100 rose 1 per cent led by economically sensitive stocks including banks and energy groups. London-listed lender HSBC gained 1 per cent after it reported second-quarter figures that easily beat analysts’ expectations.
The gains came after the China Securities Regulatory Commission, Beijing’s market regulator, called on Sunday for closer co-operation with Washington, stressing the country’s efforts to improve transparency and predictability after a crackdown on tutoring groups obliterated the market value of the $100bn sector’s biggest companies.
Chinese listings in the US have become a geopolitical flashpoint as Beijing has sought to exert greater control over the country’s powerful tech sector. The US Securities and Exchange Commission said on Friday that Chinese groups that sought to sell shares in America would be subject to stricter disclosures.
Shares in China rebounded after their worst month in almost three years, with China’s CSI 300 benchmark of Shanghai- and Shenzhen-listed blue-chips rose 2.6 per cent on Monday, while Hong Kong’s Hang Seng index added 1.1 per cent. The city’s Hang Seng Tech index, which tracks big internet groups including Tencent and Alibaba, reversed early losses to rise 1 per cent. Futures tracking Wall Street’s benchmark S&P 500 index climbed 0.6 per cent.
Last month, China’s cyber-security regulator announced plans to review all foreign listings by companies with data on more than 1m users after top leaders in Beijing called for an overhaul of how the country regulates initial public offerings in the US. The crackdown came just days after the $4.4bn listing of ride-hailing group Didi Chuxing.
The intensifying scrutiny of how Chinese groups access capital markets has pummelled stocks, delivering the worst month for China tech groups listed in the US since the global financial crisis. The Hang Seng Tech index fell 17 per cent last month.
“While we do not consider it prudent to completely avoid investments in China, further volatility can be expected until the first quarter of 2022, by which time we believe most regulatory changes may already be in place,” analysts at Credit Suisse wrote in a note on Monday.
Meanwhile, data released by China at the weekend showed that factory activity grew at the slowest pace in 15 months in July as demand contracted for the first time in more than a year.
Government bonds were steady with the yield on the benchmark German 10-year Bund, which moves inversely to its price, gaining 0.01 percentage points to minus 0.45. The equivalent US 10-year yield was steady at 1.234 per cent.
Bond yields have been falling in recent weeks, despite higher than expected inflation readings in the US and indications from the US federal Reserve last week that it was moving a step closer to the day when it would start tapering its $120bn in monthly asset purchases.
The euro rose 0.1 per cent against the dollar to $1.1885, while the pound gained 0.1 per cent to purchase $1.3924. Prices for global oil benchmark Brent crude fell 1 per cent to $74.66.
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