People's Party in Spain wins most seat but still short of a majority

For the second time in six months, Spanish elections ended up with no party winning a majority although the ruling People's Party increased the number of seats they hold.

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The center-right party of acting PM Mariano Rajoy the People's Party (PP) won 137 seats an increase of 14 from the last elections in December. However, 176 seats are needed for a majority in the 350 seat legislature. Nevertheless Rajoy told cheering supporters: "We have won the elections.We claim our right to govern." Rajoy must now enter a round of talks with other parties to drum up enough support to form a coalition government with a majority. The effect of the recent Brexit vote in the UK may have encouraged more to vote for the relatively conservative PP but it was not enough to form a majority government.

There will be pressure to reach a deal quickly to reduce uncertainty. Options include a center-right pact with the new Ciudadanos, a grand coalition between the two front-runners, the PP and the Socialists, or perhaps even a minority government of the PP. The Socialist Party has already rejected PP proposals for a grand coalition.The Socialists came in second place. Socialist Party spokesperson Antonio Hernando said: "We are not going to support Rajoy's investiture or abstain." Rajoy said that if he were unable to form a stable coalition he would simply govern day-by-day.

Although the PP did better this time than in November there is still no major change. Rajoy faces the daunting task of trying to hammer together a coalition. The failure to form a coalition is what sparked these elections. One surprise in the elections is that after the Brexit protest party Podemos did not surge in the polls and overtake the Socialists for second place as some analysts thought might happen. The Socialists won 85 seats contradicting an early exist poll that suggested they might come in third. The result was just five fewer than they had won in December. However, Podemos was not far behind at 71 seats while Ciudadanos won 32 seats. Pablo Iglesias the Podemos leader denied that his party was Eurosceptic and said he was sad the UK had voted to leave Europe.

Podemos is just two years old and grew out of protests at economic conditions in Spain, with communists and some Greens joining together. Podemos means United We Can.

Antonio Barrosa of the Teneo Intelligence political risk consulting group said he expected that negotiations to form a coalition would be tough: "It was hoped that these elections would bring clarity and that a government would be formed quickly, but I don't think that's how it's going to be."

Borrowing costs for Spain and Italy rise

      Amid fears that euro are finance ministers meeting in Brussels will be unable to agree to measures that would calm fears about the debt crisis bond yields increased both in Italy and Spain. Spanish ten year bonds were yielding more than 7 per cent making borrowing costs prohibitive for the country.
   Italy too saw its bond prices drop bringing the ten year yield to the highest level in a weak. In contrast German two year notes were yielding less than zero at .0344 per cent! Even France was able to auction similar debt at a negative rate.
  An analyst at Lloyds Banking Group said: “The market doesn’t have great expectations of the summit,”  Spanish 10 year bond rates are approaching a record.  Italian 10 year bonds yielded 6.11 per cent. For more see this Bloomberg article.

Spain's borrowing costs soar even after Greek election results

Even though a pro-bailout party came first in the Greek elections pressure on Spain and Italy increased. Borrowing costs soared in both countries widening even further the cost of financing in those countries versus Germany.

In Spain the yield of ten years bonds rose above 7 per cent. Yields at this level are regarded as unsustainable and drive the country into more debt. While Italy was just above 6 per cent that is still very high.

The Spanish Treasury Minister said:"The financial markets ... aren't relaxing their pressure on Spain. Doubts continue regarding the construction of Europe, about the present and the future of the euro," Markets barely reacted to the news that the pro-bailout New Democracy party had come first in Greece. No doubt investors realize that Greece's problems remain unsolved along with those of other countries such as Spain and Italy.

Many analysts point out that the short term band aids applied so far such as injecting money into Spanish banks do not solve the problem of very tight expensive financing in the middle of an economic decline. Economist Michala Marcussen notes:"While Greek euro exit fears have ... eased, this (election) outcome does little to alleviate the weak fundamentals that currently weigh on Spain and Italy," .For much more see this article.

Next focus in Eurozone debt crisis may be Italy

Rumours of the Spain bank bailout sent stock markets up on Friday in many countries. When the 100 billion band aid was actually announced over the weekend the response was for U.S. markets to turn negative before closing Monday (June 11). Spanish bond interest rates rose to high levels. However now the band aid has been applied to Spain some analysts are concerned about Italy.

Italy's borrowing costs rose after the Spanish bank bailout. The yield on 10 year bonds crept up to 6.04 per cent in the biggest daily gain since back on Dec. 8, 2011. Shares of Italy's largest bank UCG declined sharply.

Analyst Nicola Marinelli said:.“The scrutiny of Italy is high and certainly will not dissipate after the deal with Spain,” . “This bailout does not mean that Italy will be under attack, but it means that investors will pay attention to every bit of information before deciding to buy or to sell Italian bonds.”

Italy has a 2 trillion euro debt. Only Greece and Japan of developed nations have larger debts as percentage of GDP. Italy has to market more than 35 billion of bonds etc. each month to finance its debt. If the cost of borrowing continues to increase Italy like Spain may need help. For much more see this article.

World Bank warns European officials to act on debt crisis immediately

The head of the World Bank Robert Zoellick said in the Financial Times that it is time to pull the emergency alarm. He wrote: "while those living in the euro-zone building, especially those on the executive floors, will not want to hear an alarm, they had best read the instructions. Events in Greece could trigger financial fright in Spain, Italy and across the euro zone, pushing Europe into a danger zone."

While the concern about events is hardly new there is an increased urgency about warnings. The stock markets today (June 1st) in the U.S. Canada and Europe have taken notice with big drops. European officials are warning that actions must be taken immediately before events spiral out of control. But that seems to be what is happening in Spain and Greece.

The European Central Bank leader Mario Draghi warned that that the euro structure as it stands is "unsustainable unless further steps are taken" He added that leaders "must clarify what is the vision … what is the euro going to look like a certain number of years from now?"

The Italian Prime Minister Mario Monti demanded that the European Stability Fund be allowed to directly provide capital to struggling banks. The move is opposed by Germany.

Events in Spain are one important immediate cause for concern. The central bank noted that 97 billion Euros had left Spain in the first three months of 2012 alone. This amount is equivalent to 10 per cent of the Spanish economy. This makes clear that Spaniards have no faith in their own economy or government.

The central government is injecting money it can ill afford to rescue Bankia the third largest Spanish bank. As a result borrowing costs for ten year bonds are climbing to near 7 per cent an interest rate that the government simply cannot afford. For much more see this Der Spiegel article.

Spanish bank to seek 19 billion U.S. rescue loan

Bankia SA, Spain's fourth largest bank, saw its share trading suspended on Friday (May 25th). The bank is expected to request more than 19 billion U.S. from the government.

Bankia is faced with many bad real estate debts but it also holds 10 per cent of Spain's bank deposits. The bank was unable to raise enough capital to deal with its burgeoning losses from bad real estate debt. A real estate boom in Spain crashed in 2007 and 2008 and banks are still suffering from the bad loans made at the time.

The government has already spent 4.5 billion euros to keep the bank afloat and partially nationalized it. The entire rescue package may cost 20 billion euros. This will force Spain to go to the markets when borrowing costs are already high.

The expenditure of money to rescue banks is causing some anger among the populace when Spain is being forced to cut spending on hospitals and education to meet EU austerity demands. Many think that the plan by the Conservative government of Mariano Rajoy to try to bring the deficit down to 5.3 per cent of GDP is doomed to failure. Shares in Bankia have fallen 34 per cent on the Madrid stock market since May 7. Perhaps Spain will see more withdrawals of funds from its banks. For much more see this BNN article.

Spain: Millions protest education cuts

Most schools and universities are closed today. Both teachers and students are in the streets protesting cuts to educational funding as part of the countries' austerity measures. The government has slashed billions of Euros from the education budget.

The strike spans the whole system from elementary schools to universities. Both teachers and students are taking part in demonstrations today May 22.

­ The austerity measures if passed will reduced government funding to schools by more than 20 per cent. Unions say this will result in poorer educational conditions, mass teacher layoffs, and also higher tuition costs. The Spanish government is adding more austerity measures in addition to the 30 billion Euros in cuts already planned for this year. Overall unemployment is running at 25 per cent already and 50 per cent among young people. There have been numerous mass protests already in 2012 most not much covered by the media. I include a video of the celebration of the 15M or indignados movement. For more including video and photos see this site.

Spanish economic troubles continue

As well as Greece Spain remains a concern in the ongoing EU debt crisis. Bankia the bank in which the government recently took a large stake was rumored to be losing depositors. Shares crashed on the stock exchange but recovered somewhat today.

Moodys credit agency added to the jitters by downgrading the credit ratings of several Spanish banks. If Greece were to leave the Euro zone this would cause even fear and investor worries about Spain. Any such move might make the cost of borrowing for Spain prohibitive.

Even the present problems are raising the cost of borrowing for Spain. Analysts estimate that Spanish banks may have up to 100 billion Euros in bad real estate loans. The government plans to require banks to retain up to 30 billion Euros to cover bad loans.

Spain may need to seek support for its banks through the European Financial Stability Facility. The uncertainties in Greece produce uncertainties in Spain. For more see this article and also here.

Spain falls back in recession

Official statistics show that the Spanish economy shrank by .3 per cent during the first quarter of 2012. While this is not a large decline it is enough for Spain to be technically in a recession after two consecutive quarters in decline.

The new figures confirm the precarious state of the Spanish economy. Spain has a record 24.4 per cent unemployment rate the highest in the Euro zone. The contraction was caused by weaker demand with lower public and household spending as austerity measures take their toll.

Weaker growth in other parts of Europe have slowed exports and also tourism. However, exports did rise by 2.2 per cent while imports fell 7.2 per cent.

. Luis de Guindos Economy Minister predicted GDP would shrink by 1.7 per cent in 2012 but grow slightly by .2 per cent in 2013. Other forecasters were less optimistic with Commerzbank analysts predicting that Spain would still be in recession next year with a decrease in GDP of .3 per cent.

Spain's deficit last year was 8.5 per cent of GDP far off the 6.0 per cent agreed to with the EU. Austerity measures are supposed to bring the amount down to 5.3 per cent this year and to the EU ceiling of 3.0 per cent next year. This may be difficult to achieve if not impossible. For more see this article.

Bolivia nationalizes electrical grid

The Bolivian president Evo Morales has completed nationalization of the Bolivian electrical system. The government took control of the main power grid that is owned by a Spanish company.

On May Day International Worker's Day Bolivian troops occupied the company's installations. Other South American countries are also taking back into state control basic services that had been privatized.

Argentina moved to take control of YPF which is majority owned by Repsol SA in Spain also. In Bolivia Morales has not announced yet what compensation the Spanish owners will receive for the state takeover. However, the decree authorizing the takeover did promise indemnification which would be negotiated with the company. Morales said that only81 million had been invested in the grid since privatization in 1997. The government however had invested 220 million in generation while the grid owners profited.

Morales approval ratings have gone down from 69 per cent when he came to power in 2010 to 40 per cent now. Consumer prices have risen and oil production is still low. For much more see this article.

In Euro zone unemployment reaches record highs

The figures are for March. Spain and Italy showed significant increases even though in both countries employment was already high. The increase is probably caused by autserity measures that cut state workers, wages, and pensions and thus weakening demand.

The average rate applies to the 17 countries that use the Euro currency. In February the rate was 10.8 per cent already high. The 27 member European Union had a somewhat lower rate of 10.2 per cent. However this represents close to 25 million people out of work.

Some countries are back in recession including Spain with an unemployment level of 24.1 per cent the worst in the zone. Other countries which saw rising unemployment were Cyprus, Italy, Netherlands, and Portugal. Unemployment actually fell in Austria Ireland, Slovakia and Slovenia. For more see this BNN article.

Argentine president moves to nationalize Spanish oil company YPF (Repsol)

Argentina again challenges global capital as the president Cristina Fernandez pushed a bill that will renationalize the country's largest oil company YPF owned by Repsol in Spain. Of course the act immediately set up an international howl of complaints including from the U.S.

Fernandez says that the move will enable Argentina to recover sovereignty over its oil resources. Many countries are content to sell their resources to the highest bidder among the internatioanal oil giants, a practice that has landed Argentina in its present difficulties. YPF does very well in Argentina and its operations there represent about a third of its profits. Given the present economic mess in Spain losing YPF will be a huge blow.

YPF has recently found large reserves of oil and natural gas. The Argentine government has complained for years about the low level of output of the company. Argentina has been forced to import over 10 billion U.S. in natural and liquid gas to address an energy shortage while it exports oil.

Fernandez said:"We are the only country in Latin America, and I would say in practically the entire world, that doesn't manage its own natural resources," . The European Commission warned Fernandez that nationalizing the company would hurt the investment climate in Argentina and that it supports Spain's position.

But Fernandez said:"This president is not going to answer any threat, is not going to respond to any sharp remark.," She was applauded by business and union leaders. Fernandez has also renationalized the main airline and a state pension fund. For much more see this article.

Spain's banks may need more capital if economy deteriorates

Miguel Ordonez head of Spain's central bank warned that if the economy deteriorates Spanish banks might need more capital. Spain's economy is shrinking with unemployment near 24 per cent worse than even Greece.

There has been a surge in loan defaults and the cost of borrowing has increased for the country. Some analysts think that Spain may eventually require a bailout as did Greece but the central bank chief claims there is no talk of that.

Orddonez said:"If the Spanish economy finally recovers, what has been done will be enough, but if the economy worsens more than expected, it will be necessary to continue increasing and improving capital as necessary in order to have solid entities,"

Already the economy is predicted to shrink by 1.7 per cent this year but that prediction was before the government slashed another 27 billion euros from spending. Billions more are to be cut to spending in the 17 different regions.

The crisis is a field day for large banks who are gobbling up smaller ones at a fast rate.From around 40 banks the consolidation is expected to end up with less than 12. For more see this article.

Spain borrowing costs upward bound once again threatening any recovery

Spanish Prime Minister Mariano Rajoy says his country is in extreme difficulty. Nevertheless he claimed that the austerity cuts passed by the government are less painful than another bailout would be. At a meeting of his People's Party he said:“Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and anyone who doesn’t understand that is fooling themselves,”

Demand for Spanish bonds dropped. Today only 2.59 billion euros were sold ($3.4 billion). This was barely above the minimum amount planned and far below the 3.4 billion euros maximum goal.

The average yield on the bonds was 4.319 per cent up considerably from the 3.376 yield last month. Spain's 10 year borrowing costs are approaching the levels before the European Central Bank decided to make unlimited three year loans to banks last December. For a time this eased borrowing costs.

Rajoy announced back on March 2 that Spain would not comply with the deficit target that the previous government had agreed to with the European Union. Since then Spain's borrowing costs have risen even though Euro-region finance ministers agreed to a new debt target of 5.3 per cent of GDP. The EU target in 3 per cent of GDP but Spain has not managed that since 2007.

Many local administrations are cut out of capital markets and so are financed by the central government. There have been continuing protests against austerity measures including a general strike on March 29th.

The 2012 budget has been presented to Parliament. The budget includes plans to cut more than 27 billion euros from the deficit. Last year the deficit was 8.5 per cent of GDP. This year the target is now. 5.3. Ministries will see their budgets cut by 17 per cent. Such a large cut will no doubt have very detrimental effects on government services.

The unemployment rate is almost 24 per cent the highest in the European Union. The country faces interest payments of nearly 29 billion euros this year. It plans to spend about the same amount on the unemployed! For more see this article.

General Strike called in Spain for March 29 to protest new austerity measures

New measures passed last month by the Spanish government will make it less costly to fire workers, and make it easier for them to be let go. Salaries levels can be lowered unilaterally plus there are other benefits to business at the expense of labour.

Ignacio Toxo of the Workers Commission claimed the reforms were weighted towards business the expense of works. He said the changes bring Spain closer to labor condtions under the former dictator General Franco. In this case though the dictator is finance capital. Toxo said:"It is the most regressive reform in the history of democracy in Spain,"

Spanish banks have agreed to provide $46.35 billion U.S. that will be used to pay off suppliers owed large amounts by municipal and regional governments. The banks also agreed that the would go easy on Spaniards who struggled to pay mortgages.

As in the U.S. Spain has suffered many foreclosures. From 2008 to 20011 at total of 350,000 families have had homes foreclosed and been evicted. This year seems no better. For much more see this article.

Union rallies are to start this Sunday during the midday. Prime Minister Mariano Rajoy had apparently told his EU colleagues the new measures would provoke a general strike. He was correct! Spain has a terrible unemployment rate at 23 per cent. Rajoy admits the rate could go over 24 per cent this year. Unions point out that since earlier labor reforms more than a million more workers have lost their jobs

Austerity Protests spread to Valencia Spain

Spaniards by the thousands are in the streets of Valencia as well as other Spanish cities. They are protesting both education cuts and labor reforms that are part of the Spanish government's austerity measures.

Valencia already has one of the highest rates of unemployment in Spain. Demonstrators have clashed with the police especially in Valencia on the coast. Protesters have complained that the police have used violent tactics charging the demonstrators and beating them with batons. They then dragged them off the streets. Several protesters have been wounded by rubber bullets.

More than 40 people have been arrested so far several minors. The demonstrators claim that reforms instituted by the government last month will destroy jobs by making it easier to fire staff and adjust schedules. The government claims the changes actually help labour. For more see this article.

Spain: Deficit much larger than expected

 The Spanish government announced that the budget deficit for the year would be much larger than predicted earlier. The target was for the deficit to be 6 per cent of GDP. The actual deficit came in at 8 per cent of GDP.
   The Spanish government reacted to the larger deficit by increasing taxes and freezing wages. In addition the government cut public spending by 11.5 billion U.S. The deputy prime minister said: "This is just the beginning ... We're facing an extraordinary and unexpected situation, forcing us to take extraordinary and unexpected measures,"
   An economist at Barcelona University said that the measures would probably make the recession even worse. The defeated socialist government had taken measures that enabled Spain to fare somewhat better than Italy or Greece it now seems as if Spain faces a worsening debt situation as well. For much more see this article.

Victorious Spanish PM urges unity

This is from the BBC. Zapatero will still need to find a partner party with a few seats to have a majority. Interesting that Spain seems to be facing some of the same economic problems as the U.S. Zapatero's foreign policy is not as pro-U.S. as the Popular Party was when in power. The Socialists withdrew troops from Iraq as I recall.


Victorious Spanish PM urges unity
Spain's Prime Minister Jose Luis Rodriguez Zapatero has promised a new era in Spanish politics, after winning another four year term in office.
His Socialist Party won 169 seats, five more than in the last election, but still short of an absolute majority.

Mariano Rajoy's conservative Popular Party won 153 seats.

Mr Zapatero thanked jubilant supporters for a "clear victory" and urged unity, pledging a "new period" in Spanish politics after a bitter campaign.

"The Spanish people have spoken clearly and have decided to open a new period without tension, without confrontation," Mr Zapatero told the flag-waving crowd gathered outside his party's Madrid headquarters.

Backing for reforms

Party spokesmen said the result was a clear endorsement of the prime minister's programme of liberal reforms - including a gender-equality law, fast-track divorces and same-sex marriage - which has been fiercely opposed by conservatives and the Roman Catholic Church.


SEATS WON IN LOWER HOUSE
PSOE (Socialists): 169
PP (Popular Party): 153
CiU (Catalan): 11
PNV (Basque Nationalist): 6
ERC (Catalan leftist): 3
IU (United Left): 2
BNG (Galician Nationalist): 2
CC (Canary Isles): 2
UPyD (Progress and Democracy): 1
NA-BAI (Navarre): 1
Source: Reuters, with 99.7% of votes counted



The BBC's Steve Kingstone in Madrid says the Popular Party (PP) will now have to face up to a clear defeat. It had never really got over losing in 2004, he says, which it blamed on voter reaction to the Madrid train bombings three days before the election.

The PP had looked likely to win before the 2004 attacks. But voters rebelled at what they saw as its attempts to blame Basque separatists, ignoring evidence implicating Islamists and diverting attention from its unpopular role in the Iraq war.

Mr Rajoy, the prime minister's leading rival, had accused him during the campaign of winning in 2004 "because of Iraq and the 11 March attack".

But he said after Sunday's defeat that he had congratulated Mr Zapatero.

"I have called the candidate of the Socialist Party and I have wished him luck for the good of Spain," he said.

Coalition speculation

Turnout was recorded at 75.3%, only just below the record 75.6% last time round. It had been predicted that a high turnout would benefit the Socialists.


Both main parties increased their percentage of the vote and their number of seats compared with the 2004 election, at the expense of small leftist and regional parties.

The Socialist Party took 43.7% of the vote, and the PP 40.1%.

Pio Garcia Escudero, the PP's campaign co-ordinator, took consolation in the party's improved performance.

"The number of votes we have won has risen considerably from 2004, as has the number of seats," which was up from 148 last time, he said. "That gives us enormous satisfaction."


Although the Socialist Party has increased its number of seats, correspondents say it will still have to go into an informal coalition, probably with the largest Catalan nationalist party.

Credit crunch

The elections were marred by Friday's killing of the former socialist councillor, Isaias Carrasco, in the Basque country.

Police have blamed Basque separatists for the shooting, which brought election campaigning to an early close, but so far no group has claimed responsibility.

But security has been less of an issue in this election than the economy.

After a decade of growth, Spain is stuttering. Inflation is at a 10-year high and unemployment is the highest this century.

The Spanish housing boom is dwindling, exacerbated by the global credit crunch.

Mr Zapatero is expected to start his new term by announcing measures to boost growth and jobs.

Spain's 35 million voters were electing 350 members of the Cortes, or lower house of parliament, and 208 members of the 264-member upper house, the Senate.

The Socialists gained eight seats in the Senate - taking them to 89 - and the PP lost one - giving it 101.

The remaining 56 Senate seats are decided by indirect election by assemblies in Spain's 17 autonomous regions.

Rice arrives in Spain, criticizes hosts over Cuba

There did not seem much fence mending going on. To start right off criticising your host and then not even staying overnight doesn't sound as if much fence mending got accomplished.

Rice arrives in Spain, criticizes hosts over Cuba
Fri Jun 1, 2007 11:59AM EDT
By Sue Pleming

MADRID (Reuters) - U.S. Secretary of State Condoleezza Rice arrived in Spain for what is meant to be a fence-mending trip on Friday but her first words were of reproach for its policy of engaging Cuba.

"Democratic states have an obligation to act democratically, meaning to support opposition in Cuba, not to give the regime the idea that they can transition from one dictatorship to another," she told reporters on her plane shortly before touching down in the Spanish capital.

"There is a major transition coming in Cuba."

Rice is the highest-level U.S. official to visit here since Spain withdrew troops from Iraq in 2004 following the election of Prime Minister Jose Luis Zapatero, giving relations between Washington and Madrid a chill.

"I expect that the issue of Cuba will continue to be an issue between us, and it will continue to be one in which we will make our views known. I am sure the Spanish want to make their views known," said Rice said, who was to meet Zapatero.

The United States has a policy of isolating Cuba and its ailing President Fidel Castro while Spain favors engagement.

Cuba and its former colonial power Spain held talks on human rights in Havana this week but, in a joint statement, did not say whether they discussed 59 dissidents in Cuban prisons.

Foreign Minister Miguel Moratinos visited Havana last April and met acting President Raul Castro, passing on a get-well note from Spain's King Juan Carlos to his brother Fidel.

Rice also criticized Spain for not doing more in Afghanistan, where it has up to 690 troops at any one time.

"I would like to see all of the allies do more, and Spain is included in that list," she said.

Rice's visit will be noticeably brief -- just six hours without the symbolic overnight stay reserved for close allies.

Asked about Rice's comments on Cuba, Zapatero was keen to play down any differences earlier this week, saying it was "understandable and normal" that two countries had varying points of view on some issues.

SPAIN FAVOURS ENGAGEMENT

Fidel Castro handed over power to his brother Raul in July last year after emergency surgery and the United States has been strongly critical of the move, calling for free elections and an end to the Castro era.

Europe expert Reginald Dale of the Center for Strategic and International Studies thinktank in Washington said the State Department had been arguing hard with the White House for closer ties with Spain.

Spain had been also pushing for an official visit by Zapatero to the United States but this had not been granted, he said. "Bush is not a forgive and forget type," he said.

The two nations cooperated on Afghanistan but there are differences on Iraq and Spain's ties with Venezuela's anti-U.S. President Hugo Chavez has irked the Bush administration.

Rice's first appointment on Friday was with King Juan Carlos, who she described as a U.S. friend and praised for his role in thwarting an attempted coup in 1981, just six years after the death of dictator Francisco Franco.

"He is obviously an important historic figure in the role that he plays in allowing the transition of Spain from authoritarianism," Rice said.

U.S.-Spanish disagreements on Cuba have a long history, In 1898, U.S. forces landed on the island and ousted Spain, then Cuba's colonial ruler, leading to Cuban independence in 1902 and a period of U.S. influence.

(Additional reporting by Jason Webb