Gentiloni calls for ‘homogeneous’ European borrowing to meet euro asset demand

Economic

Summary:

Former Italian PM says Trump has transitioned from ‘transactional’ to ‘revolutionary’

The European Union promote more ‘homogeneous’ supranational debt issuance to capitalise on international demand for euro-denominated ‘safe assets’. That was the call by Paolo Gentiloni, former Italian prime minister and European Commissioner for economy, at a capital markets conference in Frankfurt organised by DZ BANK, OMFIF and KfW.

Giving the opening keynote speech, Gentiloni said the first 100 days of President Donald Trump’s second administration had been a ‘very loud wake-up call’ for Europe. He underlined a ‘profound crisis of trust’ in relations between the US and Europe, with Trump’s erratic actions on the economy and tariffs undermining international confidence in the dollar.

‘Growth through crisis’

Speaking on 6 May shortly after designated new German Chancellor Friedrich Merz failed to win a majority in the first chancellor vote in the Bundestag, Gentiloni said Europe was accustomed to ‘growth through crisis’. He uttered confidence that Merz – assuming he is elected in the next stage of the parliamentary elective process – would eventually decide appropriate policies with other European partners to drive the continent forward.

Hours after Gentiloni’s speech, in the second round of voting in Berlin, Merz received 325 votes of support from Bundestag deputies, nine more than the required majority of 316 – and was subsequently sworn in as Germany’s 10th postwar chancellor.

On supranational borrowings, Gentiloni said the new German government was unlikely to agree a straightforward extension of the Next Generation EU fund beyond the designated 2026 cut-off date. But he held out the hope that the NGEU and other European borrowing entities could be redefined to fund combined defence spending to meet security threats caused by US disengagement from Europe and Russia’s international bellicosity.

At the root of this issue lies the wish by some European policy-makers to streamline supranational borrowing with a more harmonised approach both by the European Commission and the European Stability Mechanism and by national issuers.

In areas like the planned German fiscal package on defence spending, Gentiloni said Europe would make a mistake if it concentrated extra security spending on purely national capabilities. He outlined sectors and research areas where Europe could both expand its international capabilities and add to productivity improvements. Examples included cybersecurity measures, submarine warfare defence and drone warfare.

Europe should take steps to build euro deposits held by international central banks. He suggested that the European Central Bank could step up its promotional efforts on the single currency. One idea would be for the ECB board member responsible for international affairs to work closely with a designated member of the European Commission to build up the euro’s international status.

Dealing with Trump

Gentiloni was Italian foreign minister in 2014-16 before becoming prime minister after Matteo Renzi in 2016-18 and then a member of the first Commission under Ursula von der Leyen in 2019-24. He had particular dealings with Trump when he visited Europe for the Italian G7 presidency in 2017.

Asked about the psychology of handling the US president, Gentiloni warned against considering Trump in the same fashion as during his first presidency. Trump had moved beyond driving a ‘transactional’ approach in his first term to adopting a ‘revolutionary’ stance in his second four years. In his speech, Gentiloni suggested his role model was Franklin D. Roosevelt, the legendary post-Depression and second world war president – but there were other alternatives.

Source:David Marsh

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Thomas

Economic

The US Treasury is one of America’s most venerated institutions and all eyes were on Scott Bessent as he assumed the department’s reins in late January.

Bessent must support the president’s programme. He signed up knowing Donald Trump’s worldview and what he was getting into. In carrying out the administration’s duties, Bessent’s hand is widely evident.

The Treasury secretary has broad duties in support of growth, sound economic policies and the dollar. He must manage public debt, smoothly run the Treasury’s many parts and act as the administration’s chief economic spokesperson.

Growth, sound policies and the dollar

Bessent is known for arguing US growth will sustainably rise to 3%. While this is a noble aspiration, the Congressional Budget Office, the Federal Reserve and most forecasters put potential growth at around 2%. Further, the US is now headed towards a significant slowdown due to the president’s chaotic tariff policies and uncertainties, which have put even 2% growth well out of reach for now.

Bessent by necessity publicly defends Trump’s trade policy. He recently won plaudits for quietly urging Trump to abandon ‘reciprocal’ tariffs. While equity and bond market collapses may have then motivated Trump, whatever role Bessent is playing in moderating the president’s destructive trade views is most welcome. He’s now tasked with negotiating trade deals. One wishes him well. But the situation remains a mess.

These policies – plus Trump’s attacks on the Fed, rule of law and allies, and Council of Economic Advisors Chair Stephen Miran’s writings about coercive capital market measures – have undermined trust in America, helping lead to volatile market developments and global portfolio reallocation from the dollar. They call into question America’s commitment to defending the properties that underpin dollar dominance. Bessent helpfully may have tried to soften Trump’s wrongheaded attacks on Fed Chair Jerome Powell, an outstanding and conscientious public servant whose only sin has been to provide cogent analysis and speak truth to power.

The secretary is America’s chief international financial diplomat. Bessent’s recent speech highlighting US commitment to remain in the International Monetary Fund and World Bank, while pursuing reforms, was welcome. So was his trip to Buenos Aires showing support for President Javier Milei’s reform programme, backed by the IMF. Bessent was the first administration official to visit Ukraine, seeking half of the country’s mineral revenues as payment to the US; a proposal that was tantamount to a shameful US shakedown.

Managing public debt

Bessent has postulated that revenues would gush on the back of 3% growth, helping bring the US fiscal deficit to 3% of gross domestic product. He is wrong in arguing that America doesn’t have a revenue problem.

The CBO projects annual deficits of 6% of GDP for the coming decade, assuming the 2017 Trump tax cuts expire. Those cuts are likely to be extended, further pushing up US debt and deficits. Bessent’s response in the face of the CBO’s reminder that the US fiscal trajectory is unsustainable was to blast the CBO. Bessent may purportedly be a fiscal hawk, but that does not change the laws of arithmetic.

Smoothly running the Treasury

Bessent has disregarded critical institutional prerogatives.

The Internal Revenue Service’s stewardship has been calamitous. The IRS has gone through acting commissioners and senior official resignations faster than one can hit a computer’s refresh button, mainly because of Department of Government Efficiency efforts to access the taxpayer database and IRS concerns about upholding US law. Bessent’s agreement to facilitate deportations by sharing immigrants’ tax data with homeland security authorities – which many legal analysts believe violates privacy laws – may cost the IRS some $300bn in lost revenue over the next decade. Severe DOGE-inspired IRS staff cuts could contribute to revenue losses of $500bn this year, largely through reduced enforcement.

It beggars the imagination how crippling the IRS in the face of massive fiscal deficits will not further hinder keeping the budget in check.

One of Bessent’s first acts was to do little amid the resignation of the apolitical and outstanding technical civil servant who oversaw the US Treasury’s payments system – America’s chequebook, paying the bills Congress and the Executive Branch mandated – amid seriously concerning DOGE infringements.

Bessent’s Treasury suspended enforcement of the Corporate Transparency Act aimed at tackling money laundering, tax evasion, terrorist financing and shell corporations. The administration champions cryptocurrency, despite its use in criminality, terrorist financing and money laundering, which major parts of the Treasury exist to fight.

Administration’s chief economic spokesperson

The Treasury secretary, the administration’s chief economic spokesperson, should command respect and inspire American and global confidence.

That is not the case. Bessent strains credulity with arguments about disregarding market volatility because the US economy needs to go through a detox period. He has contended that China will pay for the tariffs, said ‘so what’ if China raises its tariffs, suggested Americans should not worry about day-to-day fluctuations in 401Ks when stocks are tanking, applauded falling 10-year yields when the declines were a product of recession fears gripping markets and claimed Trump’s tariff backtracking was the strategy all along.

Past administrations practiced verbal discipline with only the secretary speaking about markets. Team Trump lacks discipline. Comments from Peter Navarro, Howard Lutnick, Stephen Miran and Kevin Hassett have impacted financial markets and sown confusion. Of course, Trump won’t restrain himself and Bessent can do little about that.

Bessent at times may play a helpful behind the scenes role in limiting fallout from the administration’s policies. But critical disappointments are evident. After 100 days, the record is less than lustrous.

Source:Mark Sobel

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Damon

Economic

Roughly 1.4bn adults around the world remain unbanked, with the greatest exclusion concentrated in sub-Saharan Africa and southeast Asia. At the same time, sovereign bonds in these regions are often issued in large denominations and dominated by foreign institutional investors, limiting access for local retail investors and exposing governments to significant foreign exchange risk.

Tokenisation can directly address these structural barriers. By issuing bonds in local currencies and lower denominations, governments can democratise access to public debt, engage domestic and diaspora populations, and reduce reliance on external capital. What began as a trend in developed financial markets may prove transformative where needed most.

Debt tokenisation as a force for good

Blockchain technology and the tokenisation of sovereign debt present promising solutions to four long-standing challenges.

The first challenge is disengaged diaspora communities. Governments can offer secure, low-denomination sovereign bonds via blockchain, meaning expatriates can reinvest in their home countries with transparency and efficiency. This provides a new avenue for public fundraising while strengthening ties between overseas citizens and domestic development goals.

Second, tokenised debt can be denominated in local currencies, offering an effective tool for reducing foreign exchange mismatches and heightened risk. Foreign-currency borrowing has historically amplified debt vulnerabilities in many emerging markets, exposing countries to volatility and external shocks. These foreign-currency liabilities are difficult to hedge due to the illiquidity and non-convertibility of many emerging market currencies, compounding debt sustainability challenges. By removing foreign exchange risks from the equation, local-currency tokenised issuance provides a path to more sustainable debt servicing. This enables governments to manage their public debt levels and fiscal spending.

The third challenge is low retail participation. Traditionally, debt issuances are issued through a complex network of intermediaries and are only accessible to investors with bank and brokerage accounts. Especially in emerging countries, these financial instruments are out of reach for most retail investors. Tokenisation offers a way to leapfrog the existing infrastructure evolution, redesigning the user journey from the ground up, enabling retail investors to purchase, hold and settle tokenised sovereign bonds in their digital wallets. Transactions are near-instant, transparent and accessible across borders, eliminating traditional barriers for diaspora communities and underserved populations. In this new model, financial inclusion is no longer just a policy goal but embedded in the infrastructure.

Fourth is a lack of product innovation. Tokenisation can change the way governments approach retail bonds, moving beyond traditional bond programmes to more tailored offerings. With programmable features, governments can issue bespoke structures such as standard-of-living bonds, which adjust returns based on inflation to preserve real income, forward-starting bonds, which activate at a future date to better match funding needs, and income-only securitised bonds which offer predictable cashflows without principal repayment obligations. There are also birthright bonds, designed as long-term savings for newborn citizens, and lottery bonds, which gamify savings by embedding prize-linked returns. These programmable structures expand both the use case and appeal of sovereign debt.

Key design considerations for governments

Governments considering tokenisation of sovereign debt should build upon insights from the market’s experiences of tokenisation. Much of recent market development shows that even well-designed systems can break down if core risks aren’t addressed.

Perhaps the most overlooked insight is that ‘bankruptcy remote’ is not enough to protect investors. In traditional models, investors must often interact with multiple intermediaries – platforms, custodians or fund vehicles – each introducing counterparty and operational risks. By leveraging tokenisation to issue debt directly to individual investors through secure, regulated channels, governments have the rare opportunity to remove these layers of risk altogether. Instead of building complex wrappers, digital issuance should be natively issued bearer instruments that are directly held, transparently recorded and resilient to intermediary failure.

There is now a clear market recognition that institutional-grade technology alone is insufficient; best-in-class governance, legal frameworks and operational discipline must complement it. Recent failures – from high-profile exchange collapses to governance breakdowns at decentralised finance projects – have shown that technology without robust oversight creates the illusion of safety without its substance.

For governments, the risks are even more acute: public sector projects carry a fiduciary responsibility to citizens, requiring partners who not only understand technical delivery but operate with an institutional mindset, steeped in regulatory scrutiny, fiduciary standards and crisis management protocols. Building sovereign digital assets demands a higher calibre of partner – those for whom stability, transparency and the safeguarding of public trust are not ambitions, but obligations.

Finally, governments should proactively foster a vibrant tokenised ecosystem to fully unlock the benefits of sovereign debt tokenisation. These digital government bonds allow issuers to swiftly create new digital money backed by high-quality collateral, enabling near-instantaneous money supply expansion in response to market needs. Equally critical, leveraging emerging clearing networks like Ubyx ensures that once stablecoins are issued, they can circulate fluidly between traditional and digital financial systems without friction. In this way, tokenised sovereign debt does not just replicate legacy systems in digital form, it provides the raw material for a more agile, resilient and interoperable financial future.

Building it right matters

Libeara built the tokenisation platform that underpins the successful deployment of Project Genesis, enabling investors to directly subscribe to programmable digital green bonds. These bonds feature automatic coupon payments and maturity tracking and real-time environmental, social and governance impact monitoring. The platform also integrates with digital wallet infrastructure, allowing seamless custody, transfer and settlement of tokenised bonds without reliance on traditional intermediaries.

In a scenario where digitally native bonds and cash are freely mobile, we can also begin to imagine a world where fiscal and monetary policy can be integrated in ways never possible before, equipping governments with new tools to strengthen resilience of the economy.

Source:Aaron Gwak

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Manuel

China–U.S. Trade War

Economic

China and the United States start their first major Trade War Two meeting on Saturday to pull back from what analysts describe as a lose-lose situation for their economies, without much clarity on what a win would look like for either side.

China is at the epicentre of U.S. President Donald Trump's global trade war that has roiled financial markets, upended supply chains and fuelled risks of a sharp worldwide economic downturn.

Washington wants to reduce its trade deficit with Beijing and convince China to renounce what the U.S. says is a mercantilist economic model and contribute more to global consumption, which would imply, among other things, painful domestic reforms.

Beijing resists any outside interference with its development path as it sees industrial and technological advancement as crucial to avoid the middle income trap. It wants Washington to remove tariffs, specify what it wants China to buy more of, and be treated as equals on the global stage.

The two sides seem much further apart and at greater risk of a major fallout than during their first trade war in Trump's previous term.

And as U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer meet China's economic tsar He Lifeng in Switzerland, none of these outcomes look realistic, analysts say.

The triple-digit, two-way tariffs are not the only point of tension in the weekend talks. Non-trade issues such as fentanyl, tech restrictions and geopolitics including the war in Ukraine are likely to further complicate the path to any resolution to a trade conflict that is disrupting the global economy.

Indeed, in an indication of how deeply non-tariff issues are in the mix, China is sending a top public-security official to the talks, a source familiar with the plans said.

"They're not going to resolve anything this weekend, other than just trying to determine if there's going to be a process, and what the agenda items will be," said Scott Kennedy, an expert in Chinese business affairs at the Center for Strategic and International Studies in Washington.

The best-case scenario for financial markets at this early stage would be an agreement to bring down tariffs from an excess of 100% - widely seen by markets as a virtual trade embargo - to levels that would allow products to flow each way, but still be hefty on American and Chinese businesses.

Trump, who unveiled the details of a new trade agreement between the United States and Britain, has signaled that punitive U.S. tariffs of 145% on Beijing would likely come down, and on Friday floated an alternative figure for the first time, saying on his social media platform that 80% "seems right." Even that is 20 points above the level he pledged on the campaign trail last year to levy against Chinese goods, and it was unclear how it would be received by the team from China, if it is presented by his negotiating team at all over the weekend.

"I expect Beijing will insist on receiving the same 90-day waiver on tariffs that all other countries received to create conducive conditions for negotiations," said Ryan Hass, director of the John L. Thornton China Center at the Brookings Institution, adding that breakthroughs are unlikely.

"Since the U.S. decisions to escalate tariffs were made arbitrarily, the decision to de-escalate tariffs can similarly be made arbitrarily."

Most analysts don't expect a waiver. But a tariff reduction, however small, and an agreement for follow-up talks that could eventually encompass non-trade issues like fentanyl would still be seen as a positive outcome by investors.

"If there is a temporary truce or symmetrical rollback of tariffs, that would be conducive to future potential holistic negotiation efforts," said Bo Zhengyuan, Shanghai-based partner at consultancy firm Plenum.

TEMPORARY DE-ESCALATION

While either side might be able to dress any rollbacks as an early win to their domestic audiences, Chinese factories and their workers are likely to start feeling the tariff pain in coming months, while Americans are staring at higher prices and unemployment.

And the root cause of the conflict will still be there.

The lopsided global trade environment in which most economies around the world rely too heavily on affordable and efficient Chinese production on the supply side and wealthy American consumers for demand won't be fixed by next week.

But markets for now are at least relieved that the world's leading powers have a chance to walk back from a path of escalating threats that investors feared might spill over from trade into finance and other areas.

Lynn Song, ING's chief Greater China economist, expects any de-escalation to bring back tariffs to around 60%, in line with Trump's pre-election pledges.

This would "still be high enough to bar many products with suitable alternatives," but also "a level that allows importers to buy products without substitutions with less pain," she said.

RHETORICAL POSTURING

Before the Saturday meeting, much of the back-channel preparations between China and the United States were bogged down by disputes over fentanyl, the seniority of negotiating officials, and the tone of rhetoric used by the U.S., Reuters reported on Friday.

Conflicting statements from both sides over who approached whom led to a further hardening in Beijing's public messaging, as one state newspaper warned of a "protracted struggle".

However, China last week signalled through a state media-affiliated blog that engaging in talks "does no harm at this stage" and that Beijing can "use this opportunity to observe, and even draw out the U.S.'s true intentions".

Analysts say that Beijing's attempts to portray Washington as the more anxious and pressured party give it political cover to engage in talks, as well as projecting strength domestically.

"We are not watching anymore for who blinks first, but for how either side will spin the other as having blinked first," said a Beijing-based diplomat.

Source: Reuters

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Manuel

Commodity

China–U.S. Trade War

Chinese buyers bought between 400,000 and 500,000 metric tons of wheat from Australia and Canada in recent weeks, traders said, as heat threatens to damage crops in China’s agricultural heartlands.

China is the world's top wheat grower and also imports large amounts of grain when domestic supply falls short of demand.

Earlier this week, Henan province, which grows about a third of China's crop, issued a risk warning as hot, dry weather threatened the wheat growing in its fields.

Chinese buyers have purchased four or five 55,000-ton shipments of wheat from Australia for delivery in July or August and around 200,000 tons from Canada, sources at two major trading firms in Australia said. The wheat is of milling quality.

The bookings from Australia were the first made by China from the country since last year, said one of the traders.

COFCO, the state-owned Chinese firm that handles most of the country's wheat imports, did not immediately respond to a request for comment.

China has in recent years been one of the world's biggest wheat importers, buying in around 11 million tons worth $3.5 billion in 2024. Australia and Canada are typically its biggest suppliers.

But shipments slowed sharply after China reaped large wheat and corn harvests last year and have since remained low.

China delayed or redirected shipments from Australia earlier this year and imported less than a million tons of wheat in the seven months to March 31, Chinese customs data accessed through Trade Data Monitor show.

One of the sources said their company had lowered its forecast of Chinese 2025 wheat production by around 5 million tons but there was no guarantee that more purchases would follow because China has large wheat inventories.

"China is well self-sufficient in feed grains this crop year with heavy stocks," said Rod Baker, an analyst at Australian Crop Forecasters in Perth, adding that faltering economic growth in China was also depressing demand for grains.

Talk of Canadian wheat sales to China has echoed around agricultural business circles in Winnipeg, Canada's grain industry capital, according to traders. Few concrete details on the sales have emerged.

Chinese buyers would have avoided buying U.S. wheat due to tariffs and the trade war between Washington and Beijing, one trader said. China in the past has been a top destination for U.S. wheat sales.

The drop-off in Chinese imports earlier in the current 2024/25 season had contributed to subdued international wheat prices, with benchmark futures in Chicago still near a four-year low touched last July.

Along with weather risks to China's upcoming harvest, attractive prices may have lured Chinese importers back into the market as the 2025/26 season approaches, traders said.

BARLEY

Chinese importers also booked a large amount of barley, according to traders.

Some said that six panamax bulk carriers carrying around 360,000 tons of French or Ukrainian new-crop barley had been sold for delivery in July or August, with others putting the volume much higher at around 1 million tons, also for shipment this summer.

"Chinese wheat and barley import buying has been very quiet in the past year and these are the first major deals I have seen in many months," a German trader said.

Feed barley purchases with optional origin were from Ukraine or France. The deals were done at a price of around $250-$254 a tonne delivered to China, one trader said.

Source: Reuters

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Manuel

Economic

China–U.S. Trade War

President Donald Trump said on Friday an 80% tariff on Chinese goods "seems right," suggesting for the first time a specific alternative to the 145% levies he has imposed on Chinese imports ahead of closely watched weekend talks between the two countries.

U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet Chinese economic tsar He Lifeng in Switzerland to discuss containing a trade war between the world's two biggest economies.

It could be the first step toward resolving a damaging conflict that has already entangled global supply chains.

Asked how the president arrived at the 80% figure, White House spokeswoman Karoline Leavitt said, "That was a number the president threw out there, and we'll see what happens this weekend."

Trump will not unilaterally bring down tariffs on China, however, she stressed.

"We need to see concessions from them as well," she said.

China is also sending a top public-security official to the talks in Geneva, a source familiar with the plans said. The development, first reported by the Wall Street Journal, is an indication of the importance of the issue of fentanyl trafficking to the talks and the wider U.S.-China relationship.

Trump cited the fentanyl scourge as the rationale for the initial imposition of punitive import taxes on goods from China, Canada and Mexico earlier this year.

China's embassy in Washington did not respond to a request for comment.

"China should open up its market to USA – would be so good for them!!! Closed markets don't work anymore!!!" Trump wrote in an all-caps social media post, opens new tab. "80% tariff on China seems right. Up to Scott B.," he added moments later.

China's foreign ministry has decried what it calls abusive and bullying economic tactics and said that China remains firmly opposed to what it calls an unsustainable approach to trade by the U.S.

Ryan Majerus, partner with the King & Spalding law firm and a former senior Commerce Department official, said the expected decline in port and trade traffic may have created some pressure to start addressing the U.S.-China trade impasse in Geneva.

"I don't see an easy off-ramp for either party," he said. "We could see a more limited agreement that lowers the tariff rates to a degree, depending on what China is willing to do."

The weekend talks come on the heels of Trump's first agreement with a major trading partner: Thursday's announcement of a pact with Britain. While that fueled some optimism in markets, it was fairly limited in scope, and a range of details still need to be hammered out.

"The U.S.-U.K. trade agreement may be better than nothing, but it is not significant enough to warrant a change to our forecast," Nancy Vanden Houten, lead U.S. economist at Oxford Economics, wrote on Friday. "While talks this weekend between U.S. and Chinese officials may yield some progress, expectations for a significant reduction in tariffs seem unwarranted."

Oxford estimates that lowering tariffs on China to 80% would bring the overall effective import tax rate from all the tariffs imposed by Trump so far to 18% from around 22% now. That would still be three times what Oxford had estimated at the start of Trump's term and far above the 2-3% average from before he returned to office.

US STOCKS MUTED

While Trump has indicated on several occasions that he expects the punitive tariff rates on China to come down, he had not until now floated a precise alternative.

Even though 80% is just around half the current rate, it remains extraordinarily high, above even the hefty 60% rate that Trump proposed while campaigning for president last year. It was not clear how it would be received by China amid what Bessent has already cast as an effective trade embargo between the two countries.

What level tariff rates settle at – and not just for China – has been a central focus for investors rattled by months of financial market volatility arising from the chaotic rollout of Trump's aggressive trade policies.

U.S. stocks, which have recouped a significant chunk of their losses since mid-February's record high, finished slightly lower for the week after a quiet session on Friday. The dollar was weaker against a basket of major trading partners' currencies.

Since taking office in January, Trump has hiked the tariffs paid by U.S. importers for goods from China to 145%, in addition to those he imposed on many Chinese goods during his first term and the duties levied by the Biden administration.

China hit back by imposing export curbs on some rare earth elements, vital for U.S. manufacturers of weapons and electronic consumer goods, and raising tariffs on U.S. goods to 125%. It also imposed extra levies on some products including soybeans and liquefied natural gas.

Trump's push on tariffs is widely seen to be elevating risks to the U.S. economy, with concerns that they will lift prices for American consumers and businesses while at the same time cutting into the demand that has so far propped up the job market.

Trump is already facing dropping approval ratings over his handling of trade as Americans brace to pay more for clothes, electronics, toys and countless other goods that emerge from Chinese factories.

China's government is seeking to mitigate closures, bankruptcies and job losses at manufacturers struggling to find viable alternatives to the U.S. market.

Representing the meeting's host, Swiss Vice President Guy Parmelin, who also serves as economic minister, emerged from separate bilateral meetings in Geneva with the U.S. and Chinese delegations with optimistic words for reporters.

"It's already a success," Parmelin said. "The two sides are talking ... If a road map can emerge and they decide to continue discussions, that will lower the tensions."

Source: Reuters

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Manuel

Political

Commodity

Iran has agreed to hold a fourth round of nuclear talks with the United States on Sunday in Oman, Foreign Minister Abbas Araqchi said on Friday, adding that the negotiations were advancing.

U.S. President Donald Trump, who withdrew Washington from a 2015 deal between Tehran and world powers meant to curb its nuclear activity, has threatened to bomb Iran if no new deal is reached to resolve the long unresolved dispute.

Trump's special envoy, Steve Witkoff, plans to attend the talks in Oman, a source familiar with the matter said on Friday.

Western countries say Iran's nuclear programme, which Tehran accelerated after the U.S. walkout from the now moribund 2015 accord, is geared toward producing weapons, whereas Iran insists it is purely for civilian purposes.

"The negotiations are moving forward, and naturally, the further we go, the more consultations and reviews are needed," Araqchi said in remarks carried by Iranian state media.

"The delegations require more time to examine the issues that are raised. But what is important is that we are on a forward-moving path and gradually entering into the details."

Witkoff, in an interview with Breitbart News, said the Iranians had stated that they do not want a nuclear weapon and the United States will "take them at their word" on this point.

"If that’s how they feel, then their enrichment facilities have to be dismantled. They cannot have centrifuges. They have to downblend all of their fuel that they have there and send it to a faraway place — and they have to convert to a civil program if they want to run a civil program," he said.

The fourth round of indirect negotiations, initially scheduled for May 3 in Rome, was postponed, with mediator Oman citing "logistical reasons".

In a separate statement on Friday, Omani Foreign Minister Sayyid Badr Albusaidi said that after "coordination with both Iran and the U.S.", the fourth round of negotiations was set to take place on Sunday in Muscat.

Araqchi said his planned visit to Qatar and Saudi Arabia on Saturday was in line with "continuous consultations" with neighbouring countries to "address their concerns and mutual interests" about the nuclear issue.