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EU, China Join Forces to Dial Down Trade Tensions: Davos Update

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(Bloomberg) — Sign up here to receive the Davos Diary, a special daily newsletter that will run from Jan. 20-24.The rich and powerful are in Davos, Switzerland, for the World Economic Forum’s 50th annual meeting, and the gathering is being closely watched to see how the global elite aims to tackle problems they helped create, above all climate change.The economy is in focus on the final day of the forum, and European Central Bank President Christine Lagarde told Bloomberg TV investors shouldn’t assume that current monetary policy is locked in for the foreseeable future just because officials are reviewing their strategy.Lagarde later takes part in a panel discussion on the global outlook with U.S. Treasury Secretary Steven Mnuchin, Bank of Japan Governor Haruhiko Kuroda and German Finance Minister Olaf Scholz. Swedish climate activist Greta Thunberg, meanwhile, has called a climate strike for Friday at 11 a.m. local time near the forum.To get all the highlights delivered to your inbox, sign up for the Davos Diary newsletter. Here’s the latest (time-stamps are local time in Davos):Centeno Sees Germany Stepping Up Spending (10:10 a.m.)To spur economic activity, euro-area countries that can spend more need to, and Germany is showing signs that it is ready to play its part, according to Eurogroup President Mario Centeno.“We know that some countries have more space than others to act,” Centeno said in a Bloomberg TV interview. “Germany is one of those countries that can act, and actually we see some action from the German side.”Recent investment in the rail sector “goes precisely in that direction,” Centeno added. “It’s public investment, connected with climate action. I expect more of those actions to be taken in the course of 2020, so that 2020 can finally see this acceleration of the global economy, and Europe can also play a role in that.”EU, China, Brazil Form Trade-Dispute Alliance (10 a.m.)The European Union and a group of 16 nations that includes China and Brazil are forming an alliance to settle trade disputes among themselves using an interim appeal-arbitration mechanism at the World Trade Organization.“We will work towards putting in place contingency measures that would allow for appeals of WTO panel reports in disputes among ourselves,” according to a copy of a joint declaration obtained by Bloomberg.The development marks an advance of the EU’s backup plan for settling international trade disputes now that the WTO appellate body is paralyzed. WTO delegates meeting in Davos are expected to announce the arrangement later Friday.“We believe that a functioning dispute settlement system of the WTO is of the utmost importance for the rules-based trading system, and that an independent and impartial appeal stage must continue to be one of its essential features,” according to the document.ESM Chief Sees More People Now in Favor of Stronger Euro Role (9:05 a.m.)The international role of the euro is becoming increasingly the focus of debate in Europe, according to European Stability Mechanism Managing Director Klaus Regling.“More people are now in favor of having a stronger role for the euro which is partly the answer to the U.S. current administration withdrawing from multilateralism,” Regling said in a Bloomberg TV interview.”Europe believes in multilateralism, and one way to strengthen European sovereignty is the international role of the euro.”Tech CEOs Dodge Issues by Warning About AI (9 a.m.)Technology’s most influential leaders have a new message: It’s not us you need to worry about — it’s artificial intelligence.Two years ago big tech embarked on a repentance tour to Davos in response to criticism about the companies’ role in issues such as election interference by Russia-backed groups; spreading misinformation; the distribution of extremist content; antitrust violations; and tax avoidance. Uber Technologies Inc.’s new chief even asked to be regulated.These problems haven’t gone away, but this time executives warned that AI that must be regulated, rather than the companies themselves.“AI is one of the most profound things we’re working on as humanity. It’s more profound than fire or electricity,” Alphabet Inc. Chief Executive Officer Sundar Pichai said in an interview. Comparing it to international discussions on climate change, he said, “you can’t get safety by having one country or a set of countries working on it. You need a global framework.”German Health Minister Says China Virus Less of a Threat (8:45 a.m.)China is more transparent and more aggressive in attempting to control the coronavirus outbreak compared with SARS, and that’s helping the international community better prepare to deal with the situation, according to German Health Minister Jens Spahn.“We are prepared and keep on preparing, but at the same time I think we have to put into perspective,” Spahn said in a Bloomberg TV interview. “There’s a big difference to SARS.”Coronavirus the ‘New Norm’: Axa’s Buberl (8:30 a.m.)Axa SA Chief Executive Officer Thomas Buberl said outbreaks like the coronavirus are the “new norm” and there will be more viruses popping up due to climate change.“We always learn in these emergency situations and then forget again when it’s gone,” Buberl told Bloomberg TV.“We need to remind ourselves that the environment is changing, it is getting warmer everywhere and therefore new viruses will pop up,” he added. “Going forward, the implication of climate on health is something that we need to study more and need to understand better.”VW’s Diess Upbeat on Battle With Tesla (8:10 a.m.)Volkswagen AG Chief Executive Officer Herbert Diess said he’s optimistic the German car giant can keep pace with Tesla Inc. in the electric-car market and even overtake Elon Musk’s company at some point.“I think it’s an open race” to define the car of the future, Diess told Bloomberg TV. “I would take Tesla more seriously than Google and there are also from our peers some very competitive companies like Toyota.”This year will be “very difficult” for automakers, with global demand “basically flat” and tighter emissions regulations coming into force in Europe, Diess said. “We’re basically optimistic, but it will be a very demanding year for the industry,” he added.Lagarde: ECB Policy Not Necessarily on Autopilot (7:30 a.m.)Lagarde said that market observers should not assume that the ECB’s monetary policy will be on “autopilot” for the next two years.“To those who think that it’s autopilot, I think that’s ridiculous,” Lagarde said in an interview with Bloomberg TV’s Francine Lacqua. “There is a forward guidance, which is strong, which is setting a very clear timetable that is fact dependent. But let’s look at the facts. Let’s look at how the economy evolves.”Lagarde added that if markets are interested in what happens over the next 12 months, “they should not pay too much attention” to the ECB’s strategy review.“To those who say it’s going to be completely static and stable for 12 months I say watch out, because things change and we might have different signals and we might reconsider,” she said. She conceded that the goal of completing the review by the end of this year is “ambitious.”Carrie Lam Courts Elite With Dim Sum (5:39 a.m.)Carrie Lam hosted 200 business and political leaders for dim sum and cocktails at a Swiss ski resort to reassure them that Hong Kong’s future is bright.The city’s leader said that Hong Kong is still open for business, despite paralyzing protests and an economy in recession. She also said that officials back home are working to contain the coronavirus that’s killed more than two dozen people in China and infected hundreds of others. Hong Kong has identified two cases.In a room decorated with gold candles and red Chinese lanterns for Lunar New Year, Lam said her government “will safeguard Hong Kong’s fundamentals, including the rule of law.” She was also “fully confident of the city’s future,” according to a readout from her office.Singapore Leader Says Rebound Depends on Calm (1:57 a.m.)Singapore Prime Minister Lee Hsien Loong said the city state’s economy could improve in 2020 only if any number of global risks don’t materialize, particularly emanating from the U.S.Lee said that he’s “relieved” that Singapore’s economy escaped recession in 2019. The government’s growth forecast for this year — anywhere from 0.5%-2.5% — indicates “we really don’t know” how things will pan out, he said in an interview with Bloomberg’s Editor-in-Chief John Micklethwait.“That’s the range of what our economy is capable of, but whether we realize that capability, that potential, depends on international conditions,” Lee said. “If there’s a blowout between China and America, or if there’s something happening in the Middle East, either with Iran or with Syria, then all bets are off.”Soros: Facebook Conspiring to Re-Elect Trump (00:18 a.m.)Billionaire George Soros said that nothing is keeping Facebook Inc. from spreading disinformation and the company may be in cahoots with U.S. President Donald Trump to get him re-elected.“I think there is a kind of informal mutual assistance operation or agreement developing between Trump and Facebook,” Soros, 89, said Thursday. “Facebook will work together to re-elect Trump, and Trump will work to protect Facebook so that this situation cannot be changed and it makes me very concerned about the outcome for 2020.”Soros didn’t offer any evidence for his claim. “This is just plain wrong,” Facebook spokesman Andy Stone said in response.Friday Highlights10:30 a.m. | Central banking panel with ECB Governing Council members Francois Villeroy De Galhau and Klaas Knot10:30 a.m. | QuickTake panel: How can the world break free from single-use plastics? Join us for a discussion and DM us questions: @QuickTake11:30 a.m. | Global Economic Outlook panel with ECB President Lagarde, BOJ Governor Kuroda, IMF’s Georgieva, U.S. Treasury Secretary Mnuchin, German Finance Minister Scholz11:30 a.m. | Austrian Chancellor Sebastian Kurz gives special addressBe on the lookout for Bloomberg Television’s interviews withVolkswagen CEO DiessBank of France Governor Villeroy de GalhauAustrian Chancellor KurzThursday Catchup‘Matter of survival’ | Germany’s Angela Merkel called on world leaders to work together to fight global warming and take the views of concerned young people seriously, saying time is running out to protect the planet. Meanwhile, the head of Merkel’s party said Germany needs to speed up the process of spending government funds.Back to school | U.S. Treasury Secretary Mnuchin questioned whether Swedish activist Greta Thunberg is qualified to talk about economic issues linked to climate change and told 17-year-old to go and study the subject in college.Trade flare-up | The U.S. and Europe looked set for a renewed clash over everything from car tariffs to digital taxes in a sign that a new American focus may be emerging following Trump’s trade truce with China.Waste-free economy | When British yachtswoman Ellen MacArthur was promoting the idea of the circular economy on the sidelines of Davos in 2012, the big attraction was curiosity about what she was up to after her sailing career. Eight years on, MacArthur’s vision is taking hold at the WEF, and firms such as Adidas, Unilever and BlackRock are embracing it.Davos laggards | The global 1% once again have ascended the Swiss Alps to breathe the rarefied air in Davos, but in the stock market they’re anything but elite.Speed reads | Turkey says central bank as independent as the Fed | Standard Chartered says few have left Hong Kong | Formula One says overhaul deal talks in final stages | Facebook says Bezos hack highlights vulnerabilities\–With assistance from Shelly Banjo, Dandan Li, Michelle Jamrisko, Katia Porzecanski, Sarah Frier, Francine Lacqua, Geraldine Amiel, Haslinda Amin, Viktoria Dendrinou, Giles Turner, Bryce Baschuk and Joao Lima.To contact the reporters on this story: Chris Reiter in Berlin at creiter2@bloomberg.net;Iain Rogers in Berlin at irogers11@bloomberg.netTo contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net;Simon Kennedy at skennedy4@bloomberg.netFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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Chancellor Hopefuls Clash in Duel for Post-Merkel Germany

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(Bloomberg) — Emotions were running high in an old brewery in the region where Chancellor Angela Merkel’s party stumbled into its worst crisis in decades.In the town of Apolda in the eastern German state of Thuringia, supporters of the Christian Democratic Union shouted down local media, claiming reporters smeared the state chapter. With beer flowing freely, that anger quickly turned to wild cheers when Friedrich Merz appeared before some 1,300 sympathizers, a day after the race to lead Germany’s most powerful party started.For the bulk in attendance, Merkel — and not a rogue decision by local CDU lawmakers to ally with the far-right Alternative for Germany — was the problem, and Merz is the answer.The long-time Merkel antagonist “is the only one in the CDU right now who has the courage” to stand up to the German leader, party member Bernhard Koegel said between speeches and folk music in Apolda. “He is the only one who will be able to stop Merkel.”Crowd SizeAbout 170 miles west of Apolda, a crowd of about half the size of Merz’s gathered to hear Armin Laschet, a moderate in Merkel’s mold who’s considered the clear front-runner. After officially announcing their respective candidacies to lead the CDU on Tuesday in Berlin, the two events were the first stops to woo the base.The eight-week contest will culminate in a special convention on April 25. The winner will have the inside track to succeed Merkel and set the trajectory for Europe’s most powerful economy for years to come. The stakes are high for Germany and its partners.Merz has accused Laschet of representing “continuity,” while pledging to be the only candidate who can take the CDU forward into a post-Merkel era.Health Minister Jens Spahn, who this week set aside his own leadership ambitions to back Laschet, took issue with Merz’s accusation in a Wednesday night television interview. Spahn’s decision not to run was a bid to unite his more conservative faction with Laschet’s centrist backers and dealt a blow to Merz’s chances.“I also have a bit of change in me, certainly compared to Friedrich Merz,” said the 39-year-old Spahn, who would be Laschet’s deputy if he wins. He has repeatedly lamented the CDU’s deepest-ever crisis and urged the party to reach out to voters leaked to the Greens and the AfD.At a barn-like clubhouse of a local rifle association in the remote village of Lennestadt-Kirchveischede, the contrast between the contenders was clear. It was Merz’s fervor and promise of change versus Laschet’s stability and his standing as head of Germany’s largest state.At the Laschet event, Martin Solbach acknowledged that Merz still has strong support in the rolling hills of rural western Germany even after his long hiatus from politics. But the CDU councilman in the nearby town of Wenden said he supports the state premier of North Rhine-Westphalia.Laschet “can show he has done a lot, which is saying more than his opponent,” who went into business after losing out in a power struggle with Merkel a decade ago, Solbach, 61, said as a traditional brass band played. “Laschet is closer to the base, but he needs to become a little more aggressive.”In his first speech since announcing his candidacy, Laschet pulled his punches when it came to his CDU political rivals. At best, he indirectly took issue with Merz’s criticism of Merkel’s energy policy, saying any approach in the age of climate change is fraught.Political TraditionThe performance was unusually tepid for an Ash Wednesday speech, a tradition in German politics. The events, often held in locations off the beaten path, typically offer politicians a platform to address issues in a more emotional way, a departure from staid stump speeches.Accompanied by a traditional brass band, Laschet took to the stage amid moderate applause from the beer-drinking CDU locals spilled out over benches. Most of Laschet’s attacks were reserved for the far-right AfD, who he said are trying to “break” the country and represent “everything the CDU is against.”He also took aim at the Greens, criticizing the environmental party for seeking growth-sapping regulations and demonizing Germany’s auto industry.“Nobody would treat a key industry like the Germans do,” Laschet said. He acknowledged the damage inflicted by the 2015 diesel-cheating scandal, “but that’s not a reason to bad talk a whole industry.”As a leader, Laschet said he wanted to talk less and deal less with regulation. “I just want to do it,” he said to loud applause.Merz’s TurfThe most aggressive aspect of the performance was its location in the rolling hills of Sauerland — a traditional CDU stronghold that also happens to be where Merz is from.The former CDU caucus leader, meanwhile, went straight to the heart of the crisis in Thuringia. Cow bells rang, and the band played a march as Merz shook the hand of the leader of the state chapter, who’s decision sparked national outrage. The gesture went over well, as did Merz’s combative style.“Things can’t stay as they are,” said Merz to the raucous crowd. “We have to transfer the enthusiasm here to the outside,” he said, adding that he would welcome having Laschet part of his team.(Updates with Spahn comments from seventh paragraph)\–With assistance from Iain Rogers.To contact the reporters on this story: Arne Delfs in Apolda, Germany at adelfs@bloomberg.net;Patrick Donahue in Lennestadt-Kirchveischede, Germany at pdonahue1@bloomberg.netTo contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Chris Reiter, Chad ThomasFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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Pope Francis Marks Ash Wednesday Mask-Free as Some Italian Towns Cancel Services Amid Coronavirus Outbreak

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(VATICAN CITY) — Pope Francis celebrated the Ash Wednesday ritual kicking off the Catholic Church’s Lenten season in traditional fashion, while other Masses in northern Italy were canceled over fears of the new coronavirus.

Francis and a long line of priests, bishops and cardinals processed through Rome’s Aventine hill into the 5th-century Santa Sabina basilica for the late-afternoon Mass. Neither the priests nor the faithful were wearing masks, and they all exchanged a sign of peace toward the end of the liturgy. But Rome has largely been spared Italy’s outbreak so far.

Other Catholic countries took precautions. In the Philippines — Asia’s only majority Roman Catholic country — priests sprinkled ashes on the heads of the faithful rather than making the mark of the cross on their foreheads.

“Wherever the ash is placed, on the forehead or on the head, the feeling is the same, it’s uplifting,” Editha Lorenzo, a 49-year-old mother of two wearing a face mask, told The Associated Press in Manila.

At the Vatican, Francis held his general audience as usual in St. Peter’s Square and sent his prayers to victims of the virus and the medical personnel treating them. A handful of the thousands of people gathered wore face masks to protect against the virus, which originated in China and has infected thousands globally including more than 300 people in Italy.

Francis kissed at least one child as he looped through the square in his popemobile and made a point to shake hands with the faithful sitting in the front row. Usually, he only waves. He also greeted prelates with a handshake at the beginning and end of the gathering, but it appeared most clergy were refraining from kissing Francis’ ring or embracing him, as they normally would do.

“I want to again express my closeness to those suffering from the coronavirus and the health care workers who are treating them, as well as the civil authorities and all those who are working to help patients and stop the contagion,” Francis said.

While Francis went ahead with his Ash Wednesday plans as usual, the patriarchate of Venice canceled the Mass scheduled for St. Mark’s Basilica, after a handful of elderly people in the lagoon city tested positive for the virus. The surrounding Veneto region is home to the second main cluster of cases in Italy.

In the Philippines, the Rev. Victorino Cueto, rector of the popular National Shrine of our Mother of Perpetual Help in the Manila metropolis, said the practice of sprinkling ash on heads of devotees was a precaution to prevent the spread of infections but actually is an old tradition based on the Old Testament.

“It’s better to be cautious,” said churchgoer Evet Accion.

On Good Friday, which marks Christ’s death on the cross, bishops in the Philippines strongly suggested that churchgoers refrain from kissing or touching the cross, a common practice among Catholics. “Instead, the faithful are requested to genuflect or make a profound bow as they venerate the cross,” said Archbishop Romulo Valles, who heads the bishops’ conference.

Last month, the bishops recommended that Catholics receive the Eucharistic host by the hand instead of the mouth and avoid holding hands in prayer during Masses as precautions amid the viral scare.

___

Gomez reported from Manila, Philippines.





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Trump campaign sues The New York Times over a 2019 Russia op-ed

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President Trump loves to threaten lawsuits against the media, but it looks like he's now actually filing one.The Trump campaign announced Wednesday it's suing The New York Times for libel over a 2019 opinion column, "The Real Trump-Russia Quid Pro Quo" by Max Frankel. In the op-ed, Frankel writes "there was no need for detailed electoral collusion between the Trump campaign and Vladimir Putin's oligarchy because they had an overarching deal: the quid of help in the campaign against Hillary Clinton for the quo of a new pro-Russian foreign policy, starting with relief from the Obama administration's burdensome economic sanctions."The campaign's legal adviser claims these statements were "100 percent false and defamatory" and the Times "was aware of the falsity at the time it published them." Axios notes that to win this lawsuit, the campaign would need to prove the Times acted with "actual malice," which is usually a "high bar" to clear. As CNBC's Christina Wilkie wrote, the "suit claims the Times must've known the *March 2019* op-ed was false because of what was in the *April 2019* Mueller report."The Times said Wednesday the Trump campaign has "turned to the courts to try to punish an opinion writer for having an opinion they find unacceptable." But "fortunately," the Times added, "the law protects the right of Americans to express their judgments and conclusions, especially about events of public importance."Trump has long threatened to sue media organizations for coverage he dislikes, but he generally hasn't ended up following through. As for why, The Washington Post explained in 2018 when Trump threatened to sue the Times over a story about his taxes that "he would be required as part of the discovery process to provide private financial documents that he has long resisted making public."This is something pundits noted on Wednesday, with The Daily Beast's Harry Siegel tweeting, "The Times has to be licking its lips thinking about discovery here if the suit gets that far."More stories from theweek.com Rush Limbaugh is fueling a coronavirus conspiracy theory about Rod Rosenstein's sister Harvard scientist predicts coronavirus will infect up to 70 percent of humanity Trump's coronavirus response is worse than incompetent



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