Thousands of small businesses in Canada face the risk of closing down after the government ended pandemic-era support last month and as interest rates are at a two-decade high, according to a Reuters report.

A surge in bankruptcies, which already jumped by 38% in the first 11 months of 2023, would weigh on the country’s economic growth, lobby groups and economists cited by Reuters warn.

Businesses that took out Canada Emergency Business Account (CEBA) interest-free loans of C$60,000 ($44,676), which were made available during the pandemic, had until January 18 to repay them. The repayment deadline has already been pushed back several times from its original date at the end of December 2022 to give small businesses more time to get on their feet.

Small businesses, which are the source of employment for almost two-thirds of Canada’s 12 million private-sector workers, are a critical segment of the country’s economy. Official statistics show there were about 1.2 million small businesses in Canada in 2021, contributing over a third to the country’s GDP. Canadian Finance Minister Chrystia Freeland said on Monday that of the 900,000 businesses that had taken the government support, a fifth have not yet repaid their loans. The Canadian Federation of Independent Businesses (CFIB) reportedly estimates that a quarter missed the deadline.

“There are tens of thousands, if not hundreds of thousands, of businesses that remain viable, but will not be able to outrun their debt,” CFIB president Dan Kelly told Reuters. Many debts could only be repaid by borrowing at a higher interest rate from banks, he said.

“We do anticipate... a rise in insolvencies over the next six months or so,” Stephen Tapp, chief economist at the Chamber of Commerce, told the outlet. The Conference Board of Canada, an independent think tank, estimates first quarter corporate profits this year to nearly halve from a year ago as companies are hit with higher costs and a drop in sales. Economists expect consumer spending in the country on a per-capita basis to slump further.

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Chinese investors and households were major gold consumers in 2023 amid strong global demand for the safe-haven metal, the World Gold Council’s quarterly report has shown. 

According to the publication, Chinese investment demand for gold – spanning bars and coins – jumped 28% last year to 280 tons. Jewelry consumption was also up 10% to 630 tons. Overall, gold purchases reached nearly 960 tons in 2023.

“China was key to a lot of what was happening last year,” said Louise Street, senior market analyst at the WGC. “When you look at the consumer sector, China is not the price-setting factor but it is providing a floor.” 

The world’s second-biggest consumer, India, saw total gold purchases slide to 748 tons in 2023. It was followed by the US (249 tons), Türkiye (201.6 tons), and Iran (71.8 tons). The top ten also included Russia, Germany, Egypt, Vietnam, and Saudi Arabia.

The report indicated that together with “blistering” demand from global central banks, Chinese consumer demand helped push the yellow metal’s price to record highs in December and keep it above $2,000 per troy ounce this year.

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The Russian food safety regulator, Rosselkhoznadzor, has partially banned imports of bananas from Ecuador, the world’s largest exporter of the fruit, after discovering a dangerous pest in shipments, the agency said in a statement on its website on Friday.

The ban targets five Ecuadorian exporters, and will come into force on February 5.

The pest in question was a polyphagous humpback fly (Megaselia scalaris Loew), which is considered a dangerous quarantine item for Russia and the EAEU countries, as it can contaminate a wide range of products and is a carrier of cholera and the bee plague.

Rosselkhoznadzor asked Ecuadorian suppliers to probe producers, and warned that more restrictive measures could follow if the authorities fail to take measures to prevent the supply of unsafe bananas to Russia. Moscow is one of Ecuador’s largest buyers of the product.

In a separate move, the regulator also banned imports of Ecuadorian carnations, which enter the country via the Netherlands, Germany, Latvia and Lithuania. Rosselkhoznadzor said it has sent notices to the relevant authorities of those EU states, requesting that they stop certifying Ecuadorian carnations as of February 9. The agency explained that it had found Californian flower thrips (Frankliniella occidentalis), a pest which can cause 100% crop loss, in flowers of Ecuadorian origin.

Viktor Bondarev, first deputy chairman of the Russian Senate Defense Committee, said that by sending arms to the US, Ecuador would also violate its neutral status in the Ukraine conflict, as they will eventually find their way to Kiev.

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Tesla and SpaceX CEO Elon Musk has been taking illegal drugs for years, on many occasions alongside the board members and directors of his companies, the Wall Street Journal reported on Saturday, citing sources who claimed to have either witnessed the drug use or had knowledge of it.

According to the report, Musk has attended a number of social gatherings in recent years with Tesla board member Joe Gebbia, where he recreationally took ketamine, an anesthetic commonly used to euthanize house pets. Other directors, Antonio Gracias, Kimbal Musk and Steve Jurvetson, have reportedly consumed drugs like ecstasy and LSD with him at several parties, including those held at Hotel El Ganzo, a boutique hotel in Mexico allegedly known for its drug-fueled events.

According to several sources, some of the directors felt pressured to consume drugs with Musk either because refraining could upset the billionaire, or result in them “losing the social capital” of being in the CEO’s circle.

Sources told the news outlet that Musk’s drug use was common knowledge among several current and former Tesla and SpaceX officials, and the volume of his consumption has become concerning in recent years.

However, the companies’ boards haven’t investigated Musk’s alleged drug use nor documented any claims. On the one hand, the use of illegal substances violates antidrug policies at both firms, while on the other, official board minutes could become public, and if they mentioned Musk’s drug problems, it could put SpaceX’s federal contracts and Musk’s security clearance at risk, the report notes.

Later, Musk also tweeted: “If drugs actually helped improve my net productivity over time, I would definitely take them!”

Neither Musk nor Spiro have commented on the WSJ’s latest article so far. Tesla’s general counsel and a SpaceX spokesman have also opted not to respond to requests for comment.

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US tech giant Meta Platforms, the parent company of Facebook and Instagram, has posted its largest-ever one-day jump in market value on Friday, trading data showed.

Meta stock rose 20.32% to an all-time high of $474.99 per share. The company gained roughly $200 billion in market capitalization, which topped $1.22 trillion.

The increase in Meta’s market cap was the biggest single-session market value addition in Wall Street history, surpassing the previous record set by Amazon, which saw a $190-billion surge on February 4, 2022.

Meta’s gains came after it posted blockbuster earnings results earlier this week. Its reported fourth-quarter revenue of $40.1 billion, up 25% year-over-year. During a post-earnings conference call Meta CEO Mark Zuckerberg said the firm has become “leaner” following its “year of efficiency,” during which it laid off thousands of employees and shut down some offices, among other cost-cutting measures.

On Thursday the company also authorized a $50-billion share buyback program and announced its first-ever quarterly dividend payout of 50 cents per share, which, analysts say, also helped boost its stock.

“Paying a dividend suggests the company wants to reboot its reputation and be taken more seriously,” Dan Coatsworth, an investment analyst at AJ Bell, told Reuters, commenting on Meta’s announcement.

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Facebook, the social media giant founded by Mark Zuckerberg, celebrates its 20th anniversary this weekend. Transitioning from a college dorm project to a dominant force in the tech industry, the platform is under scrutiny over a number of controversies, including data harvesting. It also faces a decline in user engagement, especially among younger audiences who now favor trendier platforms like TikTok or X.

These days, Facebook has become more of a reminder service for birthdays or a medium for WhatsApp communication than the vibrant social hub it once was. As Meta approaches a new decade, it prompts a retrospective journey through the evolution of this social media giant.

Founded on February 4, 2004, by Zuckerberg and three friends as thefacebook.com, the platform’s humble beginnings as an exclusive college network soon expanded beyond Harvard University, reaching other American universities by October 2005.

The early years were marked by a sense of exclusivity and community, creating a revolutionary impact that transformed online interactions. The platform’s rapid growth led to it dropping exclusivity for college and high school students in September 2006, opening its virtual doors to all users over 13 and becoming a significant player in the social media landscape.

As Facebook expanded its user base, strategic moves and acquisitions played a crucial role in shaping its trajectory. Microsoft’s investment of $240 million in October 2007 marked a pivotal moment, solidifying Facebook’s position as a third-party advertising platform partner. This infusion of capital and collaboration laid the groundwork for further growth. 

pic.twitter.com/MbMxUWiQgp

— Mark Zuckerberg (@finkd) July 6, 2023

In April 2012, Facebook made a significant acquisition that would change the landscape of visual content sharing – Instagram. The $1 billion investment proved to be a visionary move, as Instagram evolved into a powerhouse of photo- and video-sharing, complementing Facebook’s original format.

Two years later, in February 2014, Facebook made headlines again with its acquisition of WhatsApp for a staggering $16 billion. This move not only expanded Facebook’s user base but also solidified its presence in the realm of instant messaging and communication.

The strategic acquisitions continued as Facebook made forays into the realm of virtual reality. In March 2014, it acquired Oculus, a virtual-reality headset maker, for $2 billion. This move hinted at the company’s interest in emerging technologies that extended beyond its initial social networking focus.

The year 2021 brought about a transformative change – the rebranding of Facebook as Meta. This marked a shift in focus towards the metaverse, a concept introduced by Zuckerberg of an immersive digital realm seamlessly blending virtual and physical realities. While the rebranding emphasized a commitment to future technologies, it also sparked debates about the company’s direction and its potential impact on the digital landscape.

Never thought I'd be on a boat.

— Mark Zuckerberg (@finkd) February 13, 2009

However, with growth came challenges. Facebook faced criticism for its role in spreading misinformation, facilitating the spread of hate speech, and undermining user privacy. The platform, initially hailed for its ability to connect people globally, found itself under increased scrutiny for its handling of user data and its impact on political processes, notably in influencing elections.

Despite controversies, including the infamous Cambridge Analytica scandal and whistleblower revelations, Meta’s influence persisted, and its evolution continued to shape the digital landscape. These issues, while raising concerns about user privacy and data security, did not hinder Facebook’s growth. Instead, they prompted a reevaluation of the platform’s role in the digital age.

The recent legal scrutiny regarding child safety on social media platforms saw Zuckerberg testify before the US Congress. This highlighted the ongoing debate on the impact of social media on mental health and the challenges platforms face in ensuring a safe online environment, especially for younger users.

Facebook’s journey reflects not just the growth of a platform but the evolution of online communication and the integration of social media into everyday life. From its exclusive origins to its becoming a global entity, Facebook’s path showcases the transformative power of social networking in the 21st century.

META SHARES HIT ALL-TIME HIGH https://t.co/BKV2q5XhAX pic.twitter.com/ESCKqwlS1p

— Russian Market (@runews) February 1, 2024

As Facebook approached its adolescence and entered the realm of maturity, its impact on society became increasingly significant. The platform, once a college-focused social hub, had evolved into a global information-sharing powerhouse, shaping not only individual interactions but also influencing broader societal dynamics.

Despite the controversies, Facebook’s financial triumphs were undeniable. Meta’s Q4 2023 earnings report showcased a strong rebound in its online ad business, with a 25% year-over-year increase in sales. The company’s expenses decreased, and its operating margin more than doubled, reflecting successful cost-cutting measures. Net income also saw a significant increase, reaching $14 billion.

In addition to the positive financial results, Meta announced its first-ever dividend payment and a $50 billion share buyback, signaling confidence in its financial standing. However, the financial success was not without challenges. Meta’s Reality Labs unit, responsible for virtual reality and augmented reality technologies, generated over $1 billion in sales but recorded a $4.65 billion loss, highlighting the risks associated with cutting-edge technologies.

Looking ahead this year, Meta anticipates first-quarter sales in the range of $34.5-37 billion, with expenses in 2024 projected at $94-99 billion. The company’s headcount decreased by 22% year-over-year, following layoffs, indicating a strategic shift in its workforce.

Zuckerberg has trumpeted the role of artificial intelligence in the company’s growth trajectory, emphasizing continued investments in AI and computing infrastructure. However, he has also acknowledged the company’s commitment to maintaining a relatively lean workforce, balancing technological innovation with operational efficiency.

BREAKING: 𝕏 Traffic Update (January 2024)

𝕏 beats Instagram and Facebook again in driving traffic through Google on web and mobile both. pic.twitter.com/tYWfN8yo69

— DogeDesigner (@cb_doge) February 1, 2024

The confluence of financial triumphs, persistent challenges, and controversies marked the pivotal phase in Facebook’s transformation into Meta. The rebranding aimed to thrust the company to the forefront of the metaverse. However, this strategic maneuver encountered skepticism and formidable challenges, notably in light of substantial losses associated with metaverse-related technologies.

During its adolescent years, Facebook endeavored to stay relevant among younger generations. By introducing features like ‘Reels’, it sought to emulate the success of competitors such as TikTok. Yet, these initiatives met with only limited success, as the platform’s user base continued to age, resulting in diminished engagement, particularly from Generation Z.

The challenges extended beyond shifting demographics. Facebook’s reputation suffered amid data privacy controversies. Younger users, in particular, perceived the platform as less trustworthy, further impinging on engagement. In response, the company embarked on a broader identity shift.

Hawley just called on Zuckerberg to apologize directly to the the families in the audience of victims who were impacted by child sexual exploitation on Meta platforms.

Zuck then gets up and does it. pic.twitter.com/YJWCcZDAC7

— Greg Price (@greg_price11) January 31, 2024

As Facebook transformed into Meta, the ambitious vision of a metaverse took center stage. Guided by Zuckerberg’s leadership, Meta sought to seamlessly merge the digital and physical realms, unveiling a new frontier for social interaction, work, and entertainment. The 2021 rebranding aimed at surpassing the constraints of a singular platform, marking a shift from Facebook to Meta, symbolizing a broader vision that extended far beyond conventional social networking.

However, the journey toward the metaverse was riddled with challenges. Initial reactions to Meta’s metaverse announcement were met with skepticism, giving rise to concerns about practicality and societal implications. Critics questioned the feasibility of realizing a fully immersive metaverse, highlighting technical, ethical, and cultural hurdles. The financial reports shed light on the tangible costs of constructing the metaverse, with the Reality Labs unit, responsible for VR and AR technologies, experiencing significant sales but recording substantial losses. Beyond mere hardware investments, Meta navigated uncharted territories, addressing pressing concerns about data privacy and security within this digital realm. 

Facebook CEO Mark Zuckerberg explains his “Metaverse” virtual world concept, which he says is about “connecting with people.” pic.twitter.com/24YZk5ag5J

— The Recount (@therecount) October 28, 2021

Despite facing financial challenges, Meta’s strategic approach showcased a steadfast commitment to long-term innovation. Public perception played a pivotal role in Meta’s metaverse journey, demanding a delicate balance between innovation and ethical considerations. The company grappled with questions about the societal impact of the metaverse, including concerns about addiction, mental health implications, and the potential creation of digital echo chambers. Concurrently, regulatory scrutiny intensified globally as governments examined Meta’s influence, calling for transparency and accountability.

In the face of these challenges, Meta found itself contemplating the broader future of its platform. Facebook, now an integral part of Meta’s portfolio, encountered an identity crisis. Attempts to rekindle the platform’s appeal among younger generations yielded mixed success, signaling a need for a strategic shift beyond mere imitation of rivals.

For Meta, the imperative was clear: the development of safer, more innovative platforms. The decline in public posting, coupled with concerns about misinformation and the impact of closed messaging platforms, underscored the necessity for Meta to strike a delicate balance between technological innovation and social responsibility. This multifaceted journey shaped Meta’s narrative, emphasizing the company’s commitment to pioneering the digital frontier with ethical foresight and technological ingenuity.

As Meta stands at a crucial juncture, having navigated the complexities of realizing its vision, the company is confronted by significant challenges and opportunities. The metaverse, once a futuristic concept, has now become an intrinsic part of Meta’s identity, revealing both the promises and complexities of such an ambitious endeavor. This journey highlights the importance of continuous innovation, ethical considerations, and adaptability in shaping the company’s future.

The fate of Meta, Facebook, and the broader digital landscape depends on how well the company addresses societal concerns, navigates regulatory pressures, and adapts to the evolving nature of human communication. Meta’s metaverse narrative, interwoven with financial realities, ethical considerations, and technological innovation, signifies a paradigm shift that will influence the digital realm for years to come. As it continues its quest for the metaverse, the world eagerly anticipates the unfolding of a new chapter in the ever-evolving story of Meta.

The Houthi rebel attacks on vessels in the Red Sea have spurred burgeoning interest in alternative routes such as the China-Europe rail route that runs through Russia’s Far East, CNBC reported on this week. 

Companies that organize the shipment of goods have registered a sharp increase in enquiries and bookings for the route, according to the article. Transit via rail is attractive to shippers because it is cheaper than air freight and quicker than using ocean transportation.

RailGate Europe, which transports goods including furniture, toys, clothes, and automotive parts from China through Russia to European countries, told CNBC that the transit time is “significantly better” than via ocean. The journey takes between 14 and 25 days depending on its origin and destination, according to the company’s chief business development officer, Julija Sciglaite.

However, some firms have been raising concerns about sending goods via rail through Russia. “Since [the] war in Ukraine started, many companies were afraid to deliver their cargos via Russia as train passes [through] part of Russian territory,” Sciglaite told CNBC.

“Since [the] war started, [the] number of bookings decreased significantly via Russia, but within [the] last year, this route is recovering due to good transit time and prices,” she said, adding that demand for rail transit had spiked since the Houthis started attacking vessels in the Red Sea.

According to the report, the EU permits sanctioned goods to be moved via rail through Russia, whereas road transport of sanctioned products is banned. Military goods cannot be transported through Russia at all, CNBC wrote.

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KaDeWe Group, which runs the eponymous flagship retailer in Berlin and two other high-end outlets in Hamburg and Munich, has filed for insolvency under self-administration, the corporation announced this week.

The company said that while the stores are operationally healthy, it has been “forced” to restructure due to exorbitant rent costs, which “make it impossible to operate profitably.”

The group’s sales in the 2022-2023 financial year reached €728 million ($786 million), the highest in its history and nearly a quarter more than prior to the Covid-19 pandemic. However, rents during that time have spiked by nearly 37%.

“This means that the business is clearly profitable ‘before rent’ – but clearly not ‘after rent’... There is no question that the group can have a strong future with normal rents,” Chief Executive Officer Michael Peterseim said, as cited by Deutsche Welle news outlet.

KaDeWe Group is majority owned by Thailand’s Central Group, and 49.9% owned by Signa Retail, an Austrian-based property empire which itself declared insolvency last year, citing the “severe economic pressure” brought about by interest rate hikes in Europe. Signa also owns the KaDeWe Group buildings, which it leases back to the department stores. According to Central Group, it was unable to reach an agreement on store rents with Signa due to the “intransigent position of the landlord,” Bloomberg reported, citing the Thai company’s statement. It added, however, that it “remains committed to providing full support to KaDeWe and its other European luxury stores.”

The 116-year-old Berlin KaDeWe or Kaufhaus des Westens, which can be translated as “department store of the West,” is an iconic feature of the city’s commercial and architectural landscape. The store has over 66,000 square meters of retail space, and sells brands including Yves Saint Laurent, Prada, Boss, Lacoste, Chloé and Ralph Lauren. It was once considered the largest in continental Europe and one of the five largest department stores in the world.

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The Russian Federal Tax Service has filed a legal complaint with the Arbitration Court of Moscow Region against a local subsidiary of Swedish furniture manufacturer IKEA, the business daily Kommersant reported this week, citing court documents.

According to the report, the tax authority is seeking 12.9 billion rubles ($142 million) from the subsidiary, Ikea Torg LLC. The case appeared in the database of arbitration cases on January 30, but no further details have been made public.

While the Swedish furniture giant stopped its business in Russia amid Western sanctions placed on Moscow over the Ukraine conflict last year and sold off its factories, it still owns assets in the country. According to the state real estate register, Ikea Torg owns a warehouse in the village of Yesipovo outside of Moscow. The facility used to serve as a distribution center for IKEA’s retail outlets and online store.

The warehouse is valued at more than 34 billion rubles ($374 million). According to a Kommersant source, IKEA did not want to sell the property but instead sought to rent it out for up to three years. In early 2023, online marketplace Yandex.Market reportedly posted job listings with the Yesipovo facility indicated as the place of work, but the company later denied claims that it had rented the premises. After IKEA’s exit, Yandex.Market purchased all remaining IKEA products in Russia for resale.

The Federal Tax Service did not respond to requests for comment about the court filing. Ingka Group, the Swedish company that managed IKEA stores and Mega shopping centers in Russia, also did not comment.

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The fossil fuel industry is expected to spend more than $1 trillion globally over the next decade on natural gas production, driven by growing demand from Europe, a report released this week by climate campaign group Global Witness has claimed.

The NGO’s analysis of data from Rystad Energy shows that $223 billion of the total will go toward developing and operating new gas extraction sites to supply the continent.

Oil giants Shell, TotalEnergies, ExxonMobil, Equinor, and Eni will be among the top spenders, according to the report. Together, these five companies are projected to pump a total of $144 billion into gas supply for the continent over this period. Meanwhile, annual expenditures by the top 20 firms producing gas for Europe are expected to jump from $60 billion in 2024 to $105 billion in 2033.

According to Global Witness, the analysis includes both fossil gas and gas condensate, a by-product of gas extraction used to make kerosene, diesel and other fossil fuels.

“The numbers are stark – Europe is hurtling down a dangerous path by doubling down on fossil gas, and needs to pull out all the stops to end the age of fossil fuels,” Dominic Eagleton, senior fossil fuels campaigner at Global Witness, said. “The European Commission must seize its chance to quicken Europe’s exit from gas and set 2035 as a target date to phase out this costly, crisis-ridden and climate-boiling fossil fuel,” he urged.

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Russia saw a surge in foreign tourism in 2023 despite Western sanctions over the Ukraine conflict, which affected air traffic with the country, RBK news outlet reported on Saturday citing data from Russia’s security service (FSB).

According to the findings, foreign tourists visited Russia 670,700 times last year, more than triple the figures recorded in 2022. Most trips, nearly a third, were taken by Chinese residents, most notably following the introduction of a visa-free regime for group tours. The top five countries in terms of tourist trips to Russia also included Germany and Türkiye, which saw a two-fold increase, as well as the UAE and Turkmenistan.

The FSB data is based on the number of citizens crossing the state border. It considers all instances when a foreigner enters the country and, therefore, counts the number of trips, not of individuals.

However, the tourism traffic estimates for 2023 provided by the Association of Tour Operators of Russia (ATOR), which counts individuals and not trips, were only slightly lower at 580,000 people. The lobby recently predicted an up to a fourfold increase in foreign tourism to Russia in 2024, naming the weak ruble and the new e-visa scheme as major factors driving the growth. The former simplified travel to Russia for the citizens of 55 countries, while the latter made trips to the country cheaper for foreigners.

Analysts had explained the growth with the “low base” of the previous year when travel to the country was down first due to restrictions following Covid-19. They later explained that it was due to Western sanctions on Russia amid the Ukraine conflict, which affected the banking sector and air travel.

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Total gold demand hit the highest level on record last year of 4,899 tons amid global uncertainty and thanks to continued strong buying by central banks, according to the World Gold Council (WGC).

In its Gold Demand Trends report for the full year 2023, the industry group said that purchases by central banks maintained a “breakneck pace,” reaching 1,037 tons, almost matching the 2022 record.

“Even though it [central bank purchases] is not so strong as it was in 2022, it is substantially higher than prior to 2022 and it exceeded our expectations,” said John Reade, market strategist at the WGC. “It is a very impressive number,” he added. 

Purchases by central banks are expected to slow down by around 200 tons in 2024 but remain higher than prior to 2022, according to Reade. The strategist noted, however, that demand for gold among central banks could actually accelerate.

The WGC report highlighted that global gold jewelry consumption was steady in 2023 – at 2,092 tons – due to a 17% post-Covid increase in demand in China and despite high gold prices. Meanwhile, purchases of gold bars and coins declined by 3% as European demand continued to tumble. The report also showed that global gold exchange traded funds (ETFs) saw a third consecutive annual outflow in 2023, shedding 244 tons. According to the WGC, annual mine production last year increased to 3,644 tons, but fell short of the 2018 record.

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The UK economy has been hit hardest among its European peers by shipping disruptions in the Red Sea, an S&P Global PMI survey released this week shows.

According to the findings, 12% of UK manufacturers report that delivery times have been affected due to Houthi rebel attacks on ships traversing the waterway, which have forced shipping companies to reroute vessels around the southern tip of Africa. Slightly fewer companies have been impacted in Greece (9%), France, and Germany (both 8%).

“Analysis of the reasons cited by PMI panel member companies reveals that the Red Sea crisis had an especially marked impact on European companies in January... Out of the European countries monitored, UK producers were the worst impacted by the Red Sea crisis,” S&P analysts said.

UK businesses taking part in the survey noted that delivery times have been pushed back by an estimated 12 to 18 days, “disrupting production schedules and raising inflationary pressures.”

Re-routing vessels away from the Red Sea also led to higher delivery prices, which caused UK manufacturers’ input costs to rise in January for the first time since last April, the survey found. Supplier price increases were reported in chemicals, electronics, energy, food stuffs, metals, packaging, and timber. Output costs also surged by the most since September, as manufacturers were forced to pass on the increased costs to customers. New orders, meanwhile, have been falling due to weaker demand both domestically and from abroad, the survey noted.

The purchasing managers’ index (PMI) for UK manufacturing rose to 47.0 in January, but did not meet prior expectations and stayed below the threshold of 50, signaling a persistent deterioration in operating conditions.

According to the S&P survey, shipping in the Red Sea will likely continue to suffer at least into the second quarter of 2024.

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The Russian economy outpaced its European peers in terms of growth last year, expanding by 4%, Prime Minister Mikhail Mishustin stated on Friday, citing the latest calculations. He said the main driver behind the above-average growth was the rapid introduction of digital technologies within a broad range of economic sectors.

“The economic effect [from the introduction of artificial intelligence technologies] is about one trillion rubles ($11 billion), and by the end of the decade it will top ten trillion,” Mishustin said at a plenary session of the Digital Almaty 2024 forum in Kazakhstan, adding that this would eventually add some 6% to the country’s gross domestic product (GDP).

According to the prime minister, the scope of AI technologies application in economic and administrative sectors has increased by an average of 1.5 times over the past two years, and he expects that trend to continue.

“As for digital solutions, we continue to work on their implementation in all areas, including those based on artificial intelligence… We are developing digital transportation corridors and using information platforms. And there are more and more such projects. We are taking global trends into account – they help us respond to very difficult internal and external challenges,” Mishustin stated.

He noted that Russia is currently among the top-three countries “with serious competencies” in digital technologies, adding that it is open to sharing its experience and developments in the sphere with foreign partners.

“We are now focused on further development – the launch of large projects in technological sovereignty, so-called megaprojects, as well as improving the training of engineering teams and the introduction of new digital technologies,” Mishustin explained.

In addition, he noted that Russia was building a network of world-class campuses to train IT specialists and which will be open to specialists from both Russia and its partners within the EEU bloc of post-Soviet nations. There are currently 17 such campuses, and it is planned to open eight more by 2030.

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The share of national currencies in mutual settlements among the countries of the Eurasian Economic Union (EAEU) has reached 90% and is still growing, Russian Prime Minister Mikhail Mishustin revealed on Friday.

The EAEU, which is based on the Customs Union of Russia, Kazakhstan, and Belarus, was established in 2015, and was later joined by Armenia and Kyrgyzstan. In 2016, Vietnam became a free trade partner of the EAEU. The union is designed to ensure the free movement of goods, services, capital and workers among member countries.

The Russian prime minister made the comments while addressing a meeting of the EAEU Intergovernmental Council. During his remarks, he highlighted that in the first 11 months of 2023, GDP of the EAEU grew by approximately 3.5%, while industrial production gained almost 4%, and retail turnover rose by more than 6%.

As trade within the EAEU continues to grow, member countries have been reducing the use of the dollar and euro and instead turning more to national currencies in mutual settlements. Russian President Vladimir Putin has called on the member states to create a common dollar-free payment system with the aim of “boosting economic sovereignty.”

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Austria has become a net energy exporter for the first time in twenty years as stable supplies of Russian natural gas allowed it to sell more electricity than it imported, Bloomberg reported this week.  

While most EU countries slashed imports of Russian gas over the Ukraine conflict, Austria, which covers about 80% of its domestic consumption with fuel from the sanctions-hit country, actually ramped up purchases.   

Austria’s imports of Russian gas hit pre-conflict levels last year, as it bought almost double the amount of gas its economy needed, the outlet said. Increased shipments allowed traders to sell more than 90 terawatt hours of electricity abroad.  

The numbers highlight the “uneven impact” of the energy crisis which, on one hand, forced companies and households to reduce power consumption, while on the other helped Austrian state-owned companies OMV and Verbund profit from electricity exports, Bloomberg noted.   

In 2023, the firms sold more energy to Austria’s neighbors for the first time since 2003, according to the state regulator for electricity and natural gas markets.   

According OMV, Russia's Gazprom supplied all of the agreed-upon volumes of gas under a long-term contract. OMV bought 5.3 terawatt hours a month in the fourth quarter of last year, data showed.  

Even though profits at both OMV and Verbund are subject to windfall taxes, OMV announced it would pay dividends that are more than 50% higher than expected, while Verbund, which is due to post its full-year earnings next month, raised its earnings forecast in November.

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German Finance Minister Christian Lindner, injecting some humor at the recent World Economic Forum in Davos, stated that Germany is not the “sick man” of Europe but rather “a tired man,” following the recent years of crisis, in need of a “good cup of coffee.”

However, the economic indicators point to something more than fatigue. Although Germany could be described as merely being in a mild recession – the GDP readings, after all, can hardly be called awful – in reality the economy finds itself in the uneasy place of having no clear prospects for an imminent recovery. 

Economic figures paint a darkening picture

Initial estimates suggest a 0.3% decline in GDP in 2023, positioning Germany as the only major industrialized nation in the red. Germany’s national debt saw an increase of about €48 billion, reaching almost €2.6 trillion. While this may appear alarming at first glance, it’s crucial to consider the broader economic context. Germany’s debt-to-GDP ratio, standing at approximately 65%, is relatively favorable compared to many Western countries. 

Moreover, Germany has implemented strict limits on deficits, demonstrating a commitment to financial prudence. In light of these measures, there is a counterargument that Germany could potentially consider taking on more debt.

Eurozone Q4-GDP out later today - Big4 already out. Growth in Spain & Italy (0.6%/0.2%), stagnation in France (0%), contraction in Germany (-0.3%). Germany stuck at pre-pandemic GDP-level. Poor performance! Partly due to gas dependecy & big industry #ecb #dkøko pic.twitter.com/cBsSS1r2Jm

— Frederik Engholm (@FrederikEngholm) January 30, 2024

Sentiment among businesses deteriorated further at the beginning of the year, as illustrated by the ifo Business Climate Index in January, which fell to 85.2 points. Both the current situation and expectations for the coming months were evaluated more pessimistically. The ifo Institute has reduced its growth forecast for 2024 to 0.7%, compared to the previously predicted 0.9%. This downgrade is partially attributable to additional cuts in the federal budget, which became necessary due to a ruling by the Federal Constitutional Court that prohibited leftover Covid-stimulus funds from being repurposed.

Deindustrialization in Germany: A growing concern

The German economy is on the brink of a crisis as deindustrialization firmly takes root. Companies, driven by economic considerations, are increasingly relocating their production overseas, posing a significant threat to a nation heavily reliant on industrial output. This trend has immediate and profound consequences that extend beyond the evident impact on industrial sectors. The offshoring of production could entail a surge in layoffs, further aggravating the economic challenges faced by the workforce.

While the primary focus is on the industrial landscape, it is crucial to acknowledge the interconnectedness of these shifts. A case in point is the German chemical industry, which finds itself in a deep and prolonged downturn, having lost approximately 23% of its production capacity. Furthermore, leading managers have expressed considerable skepticism about a swift recovery. The challenges are exacerbated by Germany’s struggle with high energy costs, particularly affecting industries engaged in global competition. Despite government attempts to counteract these challenges, such as a billion-dollar electricity price package, success has been limited.

Meanwhile, according to a report by Deloitte, an alarming two out of three German companies have partially relocated their operations abroad due to the country’s ongoing energy crisis. This trend is particularly pronounced in critical sectors, such as mechanical engineering, industrial goods, and automotive industries, where 69% of companies have relocated their operations to a moderate or large extent.

Key findings from the Deloitte report shed light on the reasons behind this significant shift. Most businesses attribute their decisions to move operations overseas to the combination of high energy prices and inflation. Notably, companies in these industries are planning to relocate not only low-skilled component production but also, to a lesser extent, high-skilled production processes.

🔴 Germany is tumbling towards recession as Greece enjoys a mini economic boom, in a reversal of fortunes from the crisis that pitted Berlin against Athens a decade ago.https://t.co/0dS16K0al1

— The Telegraph (@Telegraph) January 24, 2024

Germany’s attempts to shift toward green energy agenda have also contributed to the rise in electricity prices, further aggravating the situation. Deloitte partner Florian Ploner warns of widespread deindustrialization occurring on a significant scale, with the potential for more companies to follow suit if electricity prices remain high. The bleak outlook for Germany is compounded by skepticism among companies about the government’s ability to address their concerns. Despite companies saying that increased subsidies and reduced bureaucracy would encourage them to stay, there is little confidence that the current government will take the necessary actions to prevent further departures. 

Contrasting trajectories: US thrives while Germany struggles amid sanctions impact

As 2024 unfolds, a striking disparity in the economic trajectories of the US and Germany becomes evident. While the US has been surpassing expectations, Germany, entangled in the repercussions of Russian sanctions, faces a precarious descent into recession.

The resilience of the US economy is evident in the final quarter of 2023, which saw a growth rate of 3.3%, a performance that surpassed economists’ projections. Notably, inflation in the US has receded from its peak of 9% in June 2022 to a more manageable 3.4%.

In stark contrast, Germany stands at a critical crossroads. The situation is further complicated by warnings of a politically motivated shift, particularly towards green energy, posing additional hurdles for major companies and casting a shadow over the nation’s economic landscape. The reluctance of the German government to acknowledge the true costs of its industry, coupled with the decision to abandon Russian gas, appears to be a misstep that has inadvertently weakened its economic standing.

A significant aspect of Germany’s predicament lies in its steadfast alignment with the Washington agenda and the consequential impact of Russia sanctions. The sanctions have placed a considerable burden on Germany’s economic machinery while serving no national interest. Industries, especially those with strong ties to Russian markets, find themselves grappling with disrupted supply chains, reduced exports, and heightened uncertainty.

This alignment with Washington has exposed Germany to economic vulnerabilities that will not be easy to overcome. Recessions come and go, but what Germany is confronting is deeper than a mere downturn: the underpinnings of its prosperity have been ripped out, while there is no quick fix to restructure the economy. 

The Russian economy keeps growing and has already become the largest in Europe and the fifth largest in the world in terms of purchasing power parity (PPP), President Vladimir Putin said while speaking at the ‘Everything for Victory’ forum in the city of Tula on Friday. 

PPP is a metric popular with many economists that compares economic productivity and standards of living between countries by adjusting for the differences in the cost of goods and services.

According to the Russian leader, the country’s economy has demonstrated stability, unlike those of the US and the EU, which are currently in decline. “The fundamental principles of the US’ and EU’s economies are good, they [economies] will rise, but today they are at the bottom, while we are rising,” Putin said.

According to the World Bank, in 2022 China was ahead of the US in terms of PPP, while India and Japan were a respective third and fourth. Russia rounded out the top five, while Germany was in sixth place. Meanwhile, Putin’s top economic adviser, Maksim Oreshkin, said recently that Russia “is already breathing down Japan’s back in the race for fourth place.” 

The Russian Economy Ministry expects the country’s GDP to expand 2.3% this year, following 3.5% growth in 2023, according to the preliminary reading.

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Russia’s assets frozen by the West won’t be enough to cover the damage Ukraine has sustained due to Russia’s military operation, the Ukrainian president’s top economic adviser, Oleg Ustenko, said on Friday during a national telethon, as cited by RBK news outlet.

“We are not talking about the figure of $300–350 billion of their gold and foreign exchange reserves. According to estimates made in Kiev, we are talking about $750 billion in direct losses. If we add indirect losses, this could raise the figure to $1 trillion,” Ustenko was cited as saying.

In mid-2022, Ukrainian Prime Minister Denis Shmygal already named the amount that would be required to restore Ukraine, estimating it at $750 billion and saying at the time that the key source for the funds should come from the “confiscated assets that belong to Russia and Russian oligarchs.”

President Vladimir Zelensky later noted that the necessary reparations were estimated at $600–$800 billion. In late 2023, the Ukrainian Ministry of Justice ruled out the possibility of concluding a peace deal with Russia without receiving reparations for the damages sustained from the conflict.

Kiev and its Western allies have long been mulling ways to use Russian assets blocked abroad to restore Ukraine. On January 30, EU member states reached an agreement allowing Brussels to transfer the income generated by Russia’s frozen central bank reserves to Kiev, but have so far stopped short of tapping the assets themselves.

In total, the EU has frozen €207 billion (just over $231 billion) of Russian assets and reserves since the beginning of the Ukraine conflict.

Moscow has repeatedly warned that any actions related to its assets by the US and its allies would amount to “theft,” stressing that seizure of the funds or any similar move would violate international law and lead to a tit-for-tat response from Russia. Several Western officials, including European Central Bank President Christine Lagarde, have also warned that tapping frozen Russian funds would undermine trust in Western currencies and the economic system.

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The Russian economy appears to have performed even better than previously expected in 2023 as growth is now projected to reach up to 4%, outpacing European peers and exceeding the global average, Prime Minister Mikhail Mishustin stated on Friday.   

Preliminary estimates show that Russian GDP growth for 2023 could come in at 3.5% or even 4%, despite the pressure from Western sanctions, Mishustin said.  

“This is higher than the average for the world, developed countries and Europe, based on World Bank data published in January,” the prime minister declared at a plenary session of the Digital Almaty 2024 forum in Kazakhstan.  

Mishustin earlier said that Russia had managed to steer its economy toward sustainable growth as every industrial sector showed positive dynamics over the past year.   

The GDP projection voiced by the prime minister is above the latest forecast by the Russian central bank, which last month stated its expectation that the economy grew by around 2.7% in 2023, driven by strong domestic demand. 

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Germany’s automobile industry is in decline and the country needs assistance to salvage it, Russian President Vladimir Putin said during a visit to the All-Russia Exhibition Center in Moscow on Thursday.

“They are now destroying their auto industry. They need to be helped somehow,” Putin stated in response to reports about Russia’s contribution to the emergence of the automobile industry in Germany. When asked whether the current decline is related to Russian consumers increasingly opting for Chinese over German cars, Putin stated “not only that,” without elaborating further.

German industry – and its automotive sector in particular – has been plagued by mounting problems over the past year and a half. The competitiveness of German manufacturers has been damaged by higher energy prices after the country lost cheap gas supplies from Russia. Hildegard Muller, president of the German Automotive Industry Association (VDA), warned last year that soaring energy costs are contributing to a “dramatic loss in international competitiveness,” as many companies are considering relocating their businesses elsewhere.

According to VDA data, while output from German automobile plants did manage to rise by 18% year-on-year to 4.1 million cars in 2023, this was still 12% below the pre-Covid year of 2019. Meanwhile, orders received by German manufacturers fell by 5%, with domestic orders plunging by 18%.

In March 2022, amid Western sanctions on Moscow in light of the Ukraine conflict, many German car manufacturers, including Volkswagen and Daimler Truck, suspended trade with Russia and later exited the country, losing a lucrative market. The void left by German carmakers was quickly filled, however, by Chinese brands, which accounted for more than 90% of all Russian car imports in 2023.

Maksim Oreshkin, Putin’s top economic adviser, earlier warned that “companies like Mercedes and BMW may fade into history in ten years” as they now have “neither the market nor the technological advantage that they had five to ten years ago.”

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Major EU clearinghouse Euroclear has revealed that it accrued almost $5 billion in profit from frozen Russian assets last year.  

In its financial results for 2023 published on Thursday, the Belgium-based company reported that net interest earnings amounted to €5.5 billion ($5.9 billion), of which €4.4 billion “relate to interests linked to Russian sanctions.”  

The company explained that the profits were driven by factors such as the prevailing interest rates and the amount of cash balances that Euroclear is required to invest.  

It’s estimated that the clearing house is holding €196.6 billion (nearly $220 billion) worth of Russian assets, the vast majority of which belong to the country’s central bank. In total, the EU has frozen €207 billion (just over $231 billion) of Russian assets and reserves since the beginning of the Ukraine conflict.  

EU leaders have repeatedly called for using the funds “to rebuild Ukraine” and agreed last year to develop a scheme to use the windfall profits generated by the funds. However, a number of officials, including ECB President Christine Lagarde, have warned that a windfall tax could undermine the euro and cause concern among those keeping reserves in the currency.   

Underscoring the persisting uncertainties over attempts to implement profit-siphoning schemes, Euroclear said that it “considers it necessary to separate the estimated sanction-related earnings from the underlying financial results when assessing the company’s performance and resources.”   

“EU Ambassadors just agreed in principle on a proposal on the use of windfall profits related to immobilised assets to support Ukraine’s reconstruction,” the Belgian presidency said in a post on X (formerly Twitter).  

The Financial Times, meanwhile, reported that EU envoys had approved a plan to set aside the profits generated from the frozen assets with no dividends to be paid to shareholders until members of the bloc unanimously opt to set up a “financial contribution to the [EU] budget that shall be raised on these net profits to support Ukraine.”  

Moscow has repeatedly warned that any actions taken against its assets by the US or its allies would amount to “theft,” stressing that seizure of the funds or any similar move would violate international law and undermine reserve currencies, the global financial system, and the world economy.

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German retail sales saw a sharp drop in 2023, according to preliminary data released on Wednesday by Germany’s Federal Statistical Office (Destatis).

In price-adjusted terms, sales in the sector were down 3.3% from 2022 and 3.9% from 2021, a year in which retail revenues surged.

Particularly hard hit was the food sector, where sales fell by 3.9% compared to the previous year. Real non-food retail sales were down 3.1%, marking the first time they have declined since 2013. Sales generated by online and mail-order retailers, which had seen revenues boom during pandemic, fell by 3.9% last year.

Even the usually profitable Christmas season did not bring a turnaround for retailers. The figures show sales in December 2023 dropped 1.7% year-on-year and 1.6% month-on-month.

Analysts link the poor performance of the retail sector in the EU’s largest economy with persistently high inflation.

A recent survey conducted by the German Trade Association (HDE) revealed that only one in six retailers rated the current business situation as “good,” and only one in five predicted that sales in 2024 would be higher than last year. Among the major problems facing the sector, retailers cited consumers’ general reluctance to spend money, rising energy costs, inflation, labor shortages, and the effect of the conflicts in Ukraine and the Middle East on supply chains.

“The current year will most likely be better for retail than the last,” he said at a press-briefing on Wednesday, noting that “even if the purchasing power losses of the last two years cannot be compensated for,” there are still positive signals for the industry.

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Turkish banks have started closing Russian corporate accounts and tightening policies for individuals following threats of secondary sanctions from the US, business daily Vedomosti reported on Thursday, citing financial consultants and business owners.

The sources said that the situation had worsened after US President Joe Biden signed an executive order in December announcing that secondary sanctions could be placed on foreign banks suspected of supporting Russia.

Media reports emerged earlier this month that Turkish financial institutions had cut ties and suspended processing payments with almost all Russian banks to avoid the risk of sanctions.

According to the Vedomosti report, at least two Turkish banks have begun closing the accounts of a significant number of Russian companies and banks after Washington threatened to add them to its blacklist. Two other Turkish banks started issuing 30-day closure notices to Russian corporate clients that opened accounts following the start of Moscow’s military operation in Ukraine.

“This mainly applies to businesses that used Türkiye as a transit jurisdiction for settlements and deliveries, as well as oil and gas traders,” Iskander Mirgalimov, an international payment consultant for Russian businesses, told Vedomosti. He specified that individual clients also face tighter restrictions when opening accounts, including the requirement to maintain a high balance.

Kremlin spokesperson Dmitry Peskov said on Thursday that the Russian authorities were aware of the situation and confirmed that negotiations were underway, blaming “unprecedented, blatant and aggressive US pressure on Türkiye and Turkish companies.” 

The report indicated that Turkish state banks are still processing payments in national currencies for goods such as food and drugs. Meanwhile, some business owners pointed to the fact that the two countries are long-term trade partners and that mutual trade turnover has been growing in recent years.

US officials have repeatedly highlighted Türkiye as a potential hub of sanctions evasion, with some Western officials raising concerns about allegations of trade between Turkish firms and sanctioned Russian entities.

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A New York jury has ruled against Russian billionaire Dmitry Rybolovlev in a high-profile court case the businessman brought against art auction house Sotheby’s, which he accused of aiding and abetting fraud.

Rybolovlev claimed that Sotheby’s was involved in a scheme allegedly orchestrated by Swiss art dealer and adviser Yves Bouvier, whom the businessman accused of flipping art purchases to him at a high markup and pocketing the difference, despite his belief that Bouvier was acting as his agent and adviser. Rybolovlev claims that he overpaid by about $1 billion for various purchases of art.

The Russian billionaire’s battle with Bouvier started back in 2015, when he first accused the dealer of unlawfully overcharging him. Rybolovlev filed numerous lawsuits against Bouvier in various jurisdictions. In October 2018, two companies controlled by Rybolovlev went on to sue Sotheby’s, alleging that the auction house had “materially assisted” Bouvier in defrauding the businessmen.

The lawsuit had originally included 16 acquisitions of artwork from April 2011 to January 2015. Sotheby’s won dismissal of most of the claims in March of last year on grounds that the complaints were either filed too late or lacked proof.

The most recent trial focused on four transactions Rybolovlev carried out with Bouvier – a 2011 $43.5 million purchase of Rene Magritte’s ‘The Domain of Arnheim’; a 2012 $183.8 million acquisition of Gustav Klimt’s ‘Wasserschlangen II’; a 2013 $67.6 million purchase of ‘Tete’, a goddess head sculpture by Amedeo Modigliani; and a $127.5 million purchase of Leonardo da Vinci’s long-lost ‘Salvator Mundi’.

Rybolovlev was seeking more than $232.5 million in damages from the auction house for these deals, according to Bloomberg. However, a New York jury on Tuesday cleared Sotheby’s of allegations on all the claims. Following the ruling, Rybolovlev’s lawyer Daniel Kornstein said that money was not the first priority in the lawsuit.

Rybolovlev, who testified during the trial, had only a brief comment to the ruling, saying simply: “It’s life.” Sotheby’s, however, welcomed the jury’s decision, saying that it “vindicated” the auction house of any alleged misconduct.

According to earlier media reports, Rybolovlev and Bouvier opted for an out-of-court settlement of their separate legal battle last year, but the details of the deal have not been made public.

Rybolovlev previously owned Russian fertilizer giant Uralkali but divested of most of his major Russian assets back in 2017 and currently resides primarily in Monaco.

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The suspended sentence of US private-equity investor and Baring Vostok founder Michael Calvey has been reduced by two months after an appeal, Interfax reported on Thursday, citing a court ruling.  

Calvey was convicted in 2021 of embezzlement and given a 5.5-year suspended sentence, which in 2022 was reduced to 4.5 years. 

In light of his most recent appeal, meanwhile, his sentence was commuted by another two months to four years and four months, the outlet said, citing a statement from the Moscow appeals court that, in rendering the decision, mentioned mitigating circumstances and a full admission of guilt.  

However, shortly after the court’s decision, Calvey’s lawyer, Timophey Gridnev, denied the court’s statement about his client’s admission of guilt.  

“Michael Calvey never admitted his guilt. And he never will, because he is innocent,” the lawyer told Interfax.   

“The appeal did not touch upon the essence of the sentence, but raised the issue of reducing the punishment and probation in connection with the personality of Michael Calvey,” Gridnev noted.

In 2021, after spending almost two years under house arrest, Calvey was handed a 5.5-year suspended sentence for embezzlement, after a judge found that he and colleagues had conspired to embezzle 2.5 billion rubles ($27.6 million).  

The other figures in the case were also given suspended sentences, including Calvey’s French associate, Philippe Delpal, who received 4.5 years.  

The two were accused of running an embezzlement scheme related to loans issued by a bank owned by Calvey’s Baring Vostok fund in 2015.  

In early 2022, Calvey left Russia after travel restrictions were lifted by an appeals court.

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The family of Italy’s late former Prime Minister Silvio Berlusconi has put up for sale his luxurious Sardinian beach estate, Villa Certosa, the Financial Times reported on Wednesday, citing sources at real estate adviser Dils, which will be in charge of the sale.

According to the report, the price tag for the property has been set at €500 million ($540 million), nearly twice as much as its latest appraisal in 2021, which assessed the estate at €260 million.

Sources said the transaction will be private, and will not be advertised publicly. Several billionaires from the UAE, Saudi Arabia, India, and the US are reportedly among potential buyers, along with a number of international luxury hospitality companies. Viewings are due to begin later this month.

Neither Dils CEO Giuseppe Amitrano nor the spokesperson for the Berlusconi family holding company has so far commented on the report.

Villa Certosa is a 110-hectare estate on Sardinia’s northeastern coast. It has 68 rooms, along with direct access to the Mediterranean Sea, several swimming pools and tennis courts, four bungalows, a gym, a greenhouse, and an amphitheater.

Berlusconi, who died last June, acquired the property in the late 1980s and completely rebuilt and enlarged it. He went on to host many prominent politicians at the estate, including Russian President Vladimir Putin, former US President George Bush and ex-UK Prime Minister Tony Blair.

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The German government is preparing to sell part of its 99% stake in the country’s main gas importer Uniper, which was bailed out during the energy crisis of 2022, Bloomberg reported on Wednesday, citing people familiar with the matter.  

Uniper, which is reported to have suffered one of the biggest losses in German corporate history of a staggering €40 billion ($43 billion), was brought to the brink of bankruptcy in 2022 due to surging energy prices and the halt in gas flows from Russia, its major supplier.  The company was subsequently nationalized in December 2022.   

According to the outlet, the German government may offer the stake late this year or in 2025. The deal could happen via a stake sale or a so-called re-IPO, but the government would likely remain a majority shareholder, sources said.  

The sale of Uniper’s shares would provide Germany with a much needed influx of money after the country was plunged into a budget crisis triggered by the top court’s decision to block the use of funds left over after the pandemic.   

Citing a Uniper representative, the outlet noted that, in approving the bailout that included up to €34.5 billion in state aid to prevent the company from collapsing, the European Commission obliged Germany to reduce its stake to 25% or less by the end of 2028.  

Sources said that Berlin’s stake is currently worth around €23.7 billion but that the shares would probably be priced at a discount to the current price.

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The surge in global diesel prices to an almost three-month high amid shipping disruptions is threatening to test the resilience of EU economies, the Financial Times reported on Wednesday.   

The rising prices reflect concerns among traders that the turbulence in the Red Sea will lift fuel costs for consumers and disrupt vital supplies from Asia to the EU, one of the world’s largest importers of refined petroleum products.   

Gasoil futures, the global benchmark for diesel prices, have soared by 15% in just over a month to $845 per metric ton, the FT said, citing trading data.   

Since Western sanctions on Russian crude and refined products went into effect in 2022, the EU has relied heavily on imports from Asia and the US. However, with many tankers now avoiding the Red Sea route, shipping diesel to the EU from Asia has become more expensive, as freight and insurance rates have jumped and vessels are making longer trips around the Cape of Good Hope in Africa.    

Meanwhile, refinery maintenance in the US will further cut supplies across the Atlantic and drive futures and retail prices further up, experts warn.   

“We see tighter European diesel balances in the upcoming months…which will provide upside to time spreads and retail prices.”  

EU countries are largely powered by diesel, which is used in cargo transportation and aviation, and also for heating homes. A sharp rise in prices would add pressure to the bloc’s already struggling economies, which previously relied on Russian diesel imports until they were banned.  

“The prospect of more expensive diesel . . . exacerbates economic challenges, contributing to a burgeoning cost of living crisis,” said James Noel-Beswick, an analyst at Sparta Commodities.

Before the outbreak of the war in Gaza, the Middle East accounted for about 60% of the EU’s total diesel supplies, which have now slumped to about a third, the outlet said, citing data from S&P Global Commodity Insights.

The Red Sea crisis has coincided with a decline in diesel inventories in the Amsterdam-Rotterdam-Antwerp storage region (ARA), making Europe even more exposed to supply disruptions, the outlet said.

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Russia has unseated the US as the largest exporter of petroleum products to Brazil, the Financial Times reported on Tuesday, citing official government figures and data from the analytics firm Kpler.

As Russia has been focused on finding new outlets for its petroleum products in light of Western sanctions, one of the new buyers has been Brazil.

In 2023, the fellow BRICS member imported 6.1 million tons of Russian diesel fuel worth $4.5 billion in 2023, according to the report. This is up from just 101,000 tons, worth $95 million, in the previous year, a 6,000% increase in terms of volumes. 

Meanwhile, Russian shipments of fuel oil to Brazil in 2023 were worth $5.3 billion, up from only $1.1 billion recorded in 2022, marking year-on-year growth of 400%.

According to data tracked by Kpler, Brazil overtook Türkiye in October to become the largest buyer of Russian diesel, while the massive surge in diesel imports recorded in 2023 means Russia has overtaken the US as Brazil’s largest supplier of the fuel.

Brazil’s trade is “influenced by multiple factors” and the significant increase in fuel imports is “the result of decisions made by private agents and follows the logic of supply and demand,” according to the country’s Industry and Foreign Trade Ministry, as cited by FT.

Government officials also told the outlet that the sharp increase in purchases helped keep consumer prices reined in. Low domestic fuel prices also help the country’s massive agriculture sector. 

Russia started diversifying its energy supplies in 2022 after the EU, G7, and allies imposed an embargo on seaborne Russian oil along with a $60-per-barrel price cap for insuring and transporting crude in an effort to curb the country’s energy revenues. Similar restrictions were subsequently introduced for exports of petroleum products. As a result, Russian oil producers have rerouted supplies to Asia and Latin America.

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A judge in the US state of Delaware has voided Elon Musk’s $56 billion Tesla pay package, arguing that the company’s board of directors had failed to prove that the billionaire CEO deserved such a high compensation. Musk responded by publicly floating a move to Texas.

The 2018 pay deal was the highest in US corporate history, and made Musk the richest man in the world, with an estimated fortune of up to $220 billion as of last year. Under its terms, Musk was given stock options that would pay out if Tesla hit certain performance targets.

However, Tesla investor Richard Tornetta, who owned just nine shares in the electric automaker at the time, sued Musk and the company, arguing that the billionaire had misled shareholders by telling them that these targets would be more difficult to reach than they were.

The case was finally brought to trial in November, and Chancery Court Chancellor Kathaleen McCormick ruled in Tornetta’s favor on Tuesday. In her 200-page judgment, McCormick argued that Musk had “enormous influence over Tesla” and was therefore able to convince shareholders that such a pay deal was necessary. Even though Musk had excused himself from board meetings on the pay deal, McCormick claimed that five of the six directors who voted on it were “beholden to Musk or had compromising conflicts.”

The judge instructed Musk and Tornetta to confer and decide how Musk would go about handing back any of the pay package he has already received.

Not all US states allow corporate courts to override shareholder decisions. “Never incorporate your company in the state of Delaware,” Musk posted on X, which he owns, after the decision was announced. “I recommend incorporating in Nevada or Texas if you prefer shareholders to decide matters,” he added.

Musk then posted a poll asking his 170 million followers “should Tesla change its state of incorporation to Texas, home of its physical headquarters?” By Wednesday evening, 87% of respondents had answered “Yes.”

The European Commission has proposed extending the suspension of customs duties on agricultural goods from Ukraine and Moldova for another year, Vice President Margaritis Schinas told journalists on Wednesday.

The tariffs were originally dropped in 2022 in an attempt to provide support for Kiev in the wake of the Russian military operation, particularly as Ukraine was largely cut off from making shipments via its traditional Black Sea route.

The current tariff-free regime expires on June 5 for Ukraine and July 24 for Moldova, while the renewal will keep it in place until June 2025.

The move comes despite farmers in several EU states protesting the flooding of local markets with cheaper produce from Ukraine. In May 2023, five Eastern European members of the EU – Poland, Hungary, Romania, Bulgaria and Slovakia – took the step of unilaterally banning imports of Ukrainian grain.

The European Commission has acknowledged the adverse impact the suspension of tariffs has had on a number of EU nations. To address the concerns, the Commission’s latest proposal provides for “quick remedial action... in case of significant disruptions to the EU market.”

The measure allows tariffs to be reimposed if imports of the above-listed goods exceed the volumes of previous years.

Separately, Brussels proposed another one-year exemption – albeit a partial one – from rules that require farmers to leave a share of their lands fallow. These measures are part of the EU’s common agricultural policy, one aim of which is to promote biodiversity. 

The latest proposals will now be reviewed by the European Parliament and member states with a view toward adopting the measures by June when the current tariff suspension expires.

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Any step towards confiscating frozen Russian assets must be done in strict accordance with international law, Britain’s investment minister, Dominic Johnson, said on Tuesday in an interview with Reuters.

Earlier this week, the EU Council reported that the bloc’s envoys had reached an agreement that is expected to allow Brussels to transfer the income generated by Russia’s frozen central bank reserves to Kiev. The G7 is planning to begin discussions on the legality of such a move at a meeting in February. 

“There’s a good amount of work to do,” Johnson told the news agency during a visit to Washington where he discussed the issue with US Deputy Treasury Secretary Wally Adeyemo “We’ve got to make sure that we get the detail right ... We’ve got to make sure these things are legally watertight.”

The UK needs to protect its reputation as a “safe and stable” place to invest, according to Johnson, who highlighted the acute need to make sure that the rest of the world feels reassured that London is “sticking to the rule of law and property rights.”

Shortly after the launch of Moscow’s military operation in Ukraine, the EU, US and allies froze around $300 billion of Russian central bank assets. Since then, the G7 nations have been debating seizing the assets and transferring them to Kiev. 

Only about $5-6 billion of the immobilized Russian reserves are being held in the US. Earlier this month, a US Senate committee approved legislation that would help set the stage for Washington to seize those assets.

The Kremlin has warned that any step related to Russian reserves by the Western allies would amount to “theft,” highlighting that confiscation of the funds or any similar move would violate international law.

Last year, President Vladimir Putin ordered the establishment of a mechanism to temporarily take over foreign assets in Russia in the event that other nations seize Russian private or government property in their jurisdictions, or threaten the national, energy, or economic security of the country.

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The dramatically upgraded forecast issued by the IMF for Russia’s GDP growth this year is “interesting,” Kremlin spokesperson Dmitry Peskov commented on Wednesday. 

The IMF significantly raised its growth projection for the Russian economy in 2024 in its latest World Economic Outlook update released this week. The Washington-based institution now expects Russian GDP to grow by 2.6% this year, a sharp increase from its October forecast of 1.1% growth. The forecast for 2025 was also increased by 0.1 percentage point from the October estimate, to 1.1%.

“This is very interesting information. You see there is a very big spread in the forecasts of our Ministry of Economic Development, and the central bank, as well as international financial institutions. Therefore, this suggests that, let’s say, the scope for forecasting has been somewhat narrowed,” Peskov said.

The IMF’s upward revision of the Russian GDP growth forecast shows the fund’s acknowledgement that the Russian economy is progressing steadily, Sergey Grishunin, the director of Russia’s National Rating Agency, said.

Earlier this month, the World Bank projected that Russia’s GDP would grow by 1.3% in 2024 and 0.9% in 2025. It added that the Russian economy outperformed expectations in 2023, expanding at 2.6% for the year.

The head of the Russian central bank, Elvira Nabiullina, said last month that GDP is expected to have grown by around 2.7% in 2023, driven by strong domestic demand. For 2024, the central bank’s current projection is of 0.5-1.5% growth. This estimate, however, will be reviewed in February, Nabiullina said, adding that it is important to make “timely decisions” to cool excess demand and reduce inflation.

President Vladimir Putin praised the country’s performance during his annual address in December, claiming the economy had shown strength and stability in the face of outside pressure.

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The IMF significantly has raised its growth forecast for the Russian economy in 2024 in its latest World Economic Outlook update released on Tuesday. 

The Washington-based institution now expects Russian GDP to grow by 2.6% this year, a sharp increase from its October forecast of 1.1% growth. The forecast for 2025 was also increased by 0.1 percentage point from the October estimate, to 1.1%. The upward revision of Russia’s economic growth forecast “[reflects] carryover from stronger-than-expected growth in 2023 on account of high military spending and private consumption, supported by wage growth in a tight labor market,” according to the IMF.

“It is definitely the case that the Russian economy has been doing better than we were expecting and many others were expecting,” the IMF’s chief economist, Pierre-Olivier Gourinchas, told the Financial Times, commenting on the report.

The IMF also projected growth in emerging and developing Europe to pick up from an estimated 2.7% in 2023 to 2.8% in 2024, before declining to 2.5% in 2025. “The forecast upgrade for 2024 of 0.6 percentage point over October 2023 projections is attributable to Russia’s economy,” said the report.

The Russian Economy Ministry expects the country’s GDP to expand 2.3% this year, following 3.5% growth in 2023, according to the preliminary reading.

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The International Monetary Fund (IMF) has revised down its economic outlook for Argentina, forecasting a second straight year of negative growth amid President Javier Milei’s push for what the IMF report calls a “significant policy adjustment” in his country.

In its latest World Economic Outlook update on Tuesday, the IMF said that Argentina’s gross domestic product will contract 2.8% this year, following a 1.1% decline in 2023. Back in October, the IMF had projected 2.8% growth for the economy in 2024.

According to the report, Argentina’s inflationary surge was the main driver pushing up the 2024 inflation outlook for emerging markets and developing economies, sending it to 8.1%.

“The [Latin America and Caribbean] forecast revision for 2024 reflects negative growth in Argentina in the context of a significant policy adjustment to restore macroeconomic stability,” the IMF stated.

Latin America’s third-largest economy, Argentina is bearing the brunt of a severe economic crisis after decades of debt and financial mismanagement. An estimated 40% of Argentinians are living in poverty. The nation’s annual inflation rate is among the highest in the world –at over 200%– and is expected to climb faster in the months ahead, after President Javier Milei’s government devalued the peso by over 50% as part of his so-called ‘shock therapy’ reforms to stabilize the ailing economy.

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The number of fake euro banknotes in circulation in Germany increased sharply last year compared to previous years, the country’s central bank revealed this week.

Police, retailers, and banks in Germany discovered almost 56,600 counterfeit notes in 2023 with a supposed value of over €5 million, which represents a 28% increase compared to 2022, according to the Bundesbank.

“The increase in the number of counterfeit notes is due to a few major cases of fraud, mainly involving counterfeit €200 ($217) and €500 ($541) banknotes,” explained Bundesbank board member Burkhard Balz.  

He noted, however, that the latest figures are “a far cry” from the all-time high recorded in 2015, when 95,400 fake euros were confiscated, and assured that the “risk for ordinary citizens of coming into contact with counterfeit money remains low.”

On average there are seven counterfeit banknotes circulating in Germany per 10,000 people, the Bundesbank estimates.

Cash is still used in the EU’s largest economy for nearly 60% of purchases, according to a recent study by the German central bank.

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The burgeoning US debt pile is akin to a “death spiral” that only a “miracle” could extract the country from, economist and 'Black Swan' author Nassim Taleb said at a business event on Monday, as quoted by Bloomberg.

Taleb defined the expanding US debt load as a “white swan,” meaning a risk event that is highly predictable and more probable than a “black swan” event, a metaphor describing an occurrence that comes as a complete surprise.

“So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” Taleb said. “And a debt spiral is like a death spiral.”

Earlier this week, US Treasury Secretary Janet Yellen said that the absolute level of US public debt looks like “a scary number.”

US government federal debt topped $34 trillion for the first time in history at the end of December. It now amounts to about $102,000 for an average American family of three. In 2023 alone, it grew by more than $4 trillion.

When asked how the US “debt spiral” could play out, Taleb said, “we need something to come in from the outside, or maybe some kind of miracle,” adding that this makes him “kind of gloomy about the entire political system in the Western world.”

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Global credit rating agency S&P warned on Monday that it could cut Israel’s sovereign credit rating if the war with the Palestinian militant group Hamas expands to other fronts.  

In October, S&P maintained Israel’s ‘AA-’ rating but lowered the country’s credit outlook from ‘stable’ to ‘negative’, citing risks that the Israel-Hamas war could spill over and have a more severe impact on the economy and broader humanitarian situation in the country. 

The potential further escalation of hostilities such as a direct confrontation with Hezbollah in Lebanon or Iran, could result in a rating downgrade, according to Maxim Rybnikov, director of EMEA sovereign and public finance ratings at S&P.  

“We could also lower the ratings if the impact of the conflict on Israel’s economic growth, fiscal position, and balance of payments proves more significant than we currently project,” Rybnikov said. 

S&P expects the Israeli economy to grow by just 0.5% this year with a cumulative budget deficit of 10.5% of GDP in 2023-2024 “but there are downside risks to these assumptions.”  

S&P, however, indicated it could restore Israel’s credit outlook to ‘stable’ if the conflict is resolved, as that would mean a reduction in regional and domestic security risks.

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More and more countries are looking for alternatives to the Belgium-based SWIFT financial messaging system, the head of the Russian central bank, Elvira Nabiullina, told RIA Novosti in an interview on Tuesday.  

She discussed the growing concerns among businesses and nations “interested in the development of economic, trade and investment relations” about how the existing dollar-based institutions work.   

“Risks of using the established international payment infrastructure have emerged, and many countries are thinking about alternatives such as their own options for cross-border payment mechanisms,” Nabiullina said.

The head of Russia’s central bank earlier identified restrictions on international payments as being among the most “painful” sanctions imposed by Western countries over the Ukraine conflict.   

Since Russia’s key banks were disconnected from SWIFT in 2022, Russia and many of its trading partners have intensified efforts to reduce exposure to the Western financial system. Banks and businesses have sought to use alternative financial and banking platforms, such as non-SWIFT money-messaging systems, and also to replace the dollar and euro with national currencies in trade settlements.   

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The share of Russia’s settlements in national currencies with fellow BRICS countries has increased to 85%, up from just 26% two years ago, the head of the Russian central bank, Elvira Nabiullina, told RIA Novosti on Tuesday.

Nabiullina added that the share of the group in Russia’s foreign trade has doubled over the past two years to reach 40%, up from 20% in 2021 and 30% 2022.

Moscow is currently discussing potential integration of national payment infrastructures with BRICS members, according to Nabiullina, who mentioned that 159 entities from 20 countries had already hooked up to the Russian alternative to SWIFT, which is called the System for Transmitting Financial Messages, or SPFS. 

BRICS, which previously comprised Brazil, Russia, India, China, and South Africa, saw a major expansion this year when Saudi Arabia, Iran, Ethiopia, Egypt, and the United Arab Emirates joined in January. According to Nabiullina, the group now accounts for 35% of the world’s GDP in PPP terms.

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EU member states have reached an agreement that is expected to allow Brussels to transfer the income generated by Russia’s frozen central bank reserves to Kiev, according to the Belgian presidency of the EU Council. 

“EU Ambassadors just agreed in principle on a proposal on the use of windfall profits related to immobilised assets to support Ukraine’s reconstruction,” the country's representatives announced in a post on X (formerly Twitter) on Monday.

The Financial Times, meanwhile, has reported that EU envoys had approved a plan aiming to set aside the billions of euros in profits generated by the frozen assets of Russia’s central bank. Some €191 billion ($206 billion) out of €260 billion ($291 billion) of Russia’s immobilized reserves are currently held by Belgium’s Euroclear, a central security depository, generating billions as securities reach maturity and are reinvested.

According to the draft seen by the FT, profits generated by Euroclear will be booked separately with no dividends to be paid to shareholders until members of the bloc unanimously opt to set up a “financial contribution to the [EU] budget that shall be raised on these net profits to support Ukraine.”

Last week, sources close to the discussions told Bloomberg that EU foreign ministers had backed applying a windfall tax on Russia’s frozen assets. At the same time, Reuters reported that the EU was unlikely to confiscate the funds despite G7 plans to discuss the legality of doing so at a meeting in February. 

Moscow has repeatedly warned that any actions related to its assets by the US and its allies would amount to “theft,” stressing that seizure of the funds or any similar move would violate international law and undermine reserve currencies, the global financial system, and the world economy.

In April, President Vladimir Putin signed a decree establishing a mechanism to temporarily take over foreign assets in Russia in the event that other countries seize Russian private or government property in their jurisdictions, or threaten the national, energy, or economic security of the country.

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The BRICS states have overtaken the G7 in terms of share in global GDP in PPP terms, the head of the Russian central bank, Elvira Nabiullina, told RIA Novosti in an interview on Tuesday.   

According to the central bank chief, with the addition of the new members, the group’s share in global output rose from 31% to 35% as of the end of 2023.

The metric that Nabiullina is using is called GDP in terms of PPP, or purchasing power parity. PPP is a metric popular with many economists that compares economic productivity and standards of living between countries by adjusting for the differences in the cost of goods and services.

“BRICS economies are developing quite quickly,” Nabiullina said, stressing that that the group is playing an important role in the world.

Last year saw a groundbreaking expansion of the group. Previously comprising Brazil, Russia, India, China, and South Africa, the economic bloc decided to admit Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates, while leaving the door open to accepting new members.

With the addition of five new nations, BRICS is poised to command more than 40% of global crude oil production, while its population will amount to nearly 3.6 billion – almost half of the world’s total.

Numerous other states have expressed interest in becoming members of BRICS, while some have already formally submitted applications. The latter group includes Venezuela, Thailand, Senegal, Cuba, Kazakhstan, Belarus, Bahrain, and Pakistan. 

According to data from the IMF, the G7’s share in global GDP in terms of PPP has been on a steady decline over the past several years, dropping from 50.42% in 1982 to 30.39% in 2022. The Washington-based institution expects the figure to edge lower to 29.44% this year.

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The EU plans to raise up to €10 billion ($10.8 billion) in investment to create a transport corridor to Central Asia through the South Caucasus and Türkiye that bypasses Russia, the European Commission announced on Monday at a forum devoted to developing the route.

According a statement released by the European Commission, Brussels is currently ready to allocate €2.97 billion for the purpose.

For additional funding, the European Investment Bank has reportedly signed memorandums of understanding totaling €1.47 billion with the governments of Kazakhstan, Kyrgyzstan and Uzbekistan, as well as the Development Bank of Kazakhstan. 

Meanwhile, the European Bank for Reconstruction and Development is expected to sign a memorandum of understanding with Kazakhstan regarding an investment pipeline worth €1.5 billion for projects already being prepared to develop transport connectivity in Central Asia. 

According to the statement, the bloc is urgently trying to find alternative trade routes between Europe and Asia that could bypass Russia.

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Most Russian companies are facing an acute shortage of workers as the country’s job market undergoes a transformation, news outlet Izvestia reported on Monday, citing recruiting agencies.   

Some 86% of enterprises and organizations have struggled to fill open positions since the beginning of the year, regardless of size and industry, according to headhunting agency SuperJob.    

“The larger the business is, the more often its representatives have complained about a lack of applicants,” Superjob said.   

Demand for labor has been most notable in the transport and logistics and retail and service sectors, recruiters say. Enterprises in the manufacturing and construction industries have reported a lack of skilled workers and engineers, while retailers said they have been short of sales staff, loaders, drivers, and warehouse workers.    

The areas seeing a major increase in vacancies include the financial sector, personnel management, IT, and administration, data showed.  

“62% of companies want to increase their headcount this year, and in the mechanical engineering industry this figure is even more impressive, amounting to 84%,” Natalya Danina, hh.ru’s chief labor market expert, told Izvestia.

The need to develop domestic high-tech enterprises has significantly changed the makeup of demand for labor, experts note, saying that specializations related to biology and bio-technologies will be most needed.

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Whether the EU can maintain the standards of living it is accustomed to depends on how quickly it restores relations with Russia, Deputy Prime Minister Aleksey Overchuk said in an interview with the magazine Expert published on Monday. 

Access to cheap energy from Russia allowed the bloc to develop its economy and ensure a high standard of living, according to Overchuk. However, the end of globalization, politicization of the EU’s decision-making process, and the severing of economic relations with Moscow “are stripping Europe of the competitive advantages that has underpinned its prosperity,” he said.

Overchuk pointed to the gradual slowdown in the EU’s economy since 2022 as industry shifts to regions with lower energy prices and agricultural production declines. “This is the decline of Europe, which is very clearly visible against the backdrop of economic growth in other regions of the world, including the EAEU [Eurasian Economic Union],” he said.

Moscow, Overchuk argued, realizes that restoring trade and economic ties with the EU in the medium term is impossible. “It was not Russia who broke economic ties with Europe, and it was not Russia who started imposing sanctions,” he said. “The sooner Europe recognizes the necessity of repairing relations with Russia, the better the odds that Europeans will be able to retain their standard of living.” 

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A Hong Kong court on Monday ordered the liquidation of property giant China Evergrande Group, the world’s most indebted developer, after an 18-month long hearing.  

Judge Linda Chan delivered the ruling, saying “it is time for the court to say enough is enough” after the troubled developer repeatedly failed to come up with a convincing plan to restructure its debts. The company had been given seven extensions since court proceedings began in 2022.  

The real estate firm, which first ran into trouble refinancing its debt in 2020, now faces 2.39 trillion yuan ($333 billion) of total liabilities, a figure that significantly outweigh its 1.74 trillion yuan ($240 billion) in assets. Most of the latter are in mainland China, which is a different jurisdiction than Hong Kong.  

The liquidation petition was lodged by Top Shine in June 2022, an investor in Evergrande unit Fangchebao, which claimed the developer had failed to honor an agreement to repurchase shares it had bought in the subsidiary.  

Evergrande sent China’s struggling property sector into a tailspin when it defaulted on its debt in 2021. The company’s troubles affected China’s entire real estate market, with companies accounting for 40% of home sales defaulting on their debt obligations since mid-2021, including Kaisa Group and Shimao Group Holdings. The liquidation ruling will likely further hit the country’s capital and property markets, experts say. 

Following Monday’s decision, the judge appointed Alvarez & Marsal as the liquidator, which is expected to take control of Evergrande’s assets, negotiate with creditors on debt restructuring, and take over management of the company.  

Evergrande had been working on a $23 billion debt revamp plan, but it fell apart in September when the company announced its founder, billionaire Hui Ka Yan, was under investigation for suspected crimes.  

“It is not an end but the beginning of the prolonged process of liquidation, which will make Evergrande’s daily operations even harder,” said Gary Ng, senior economist at Natixis. “As most of Evergrande’s assets are in mainland China, there are uncertainties about how the creditors can seize the assets and the repayment rank of offshore bondholders, and situation can be even worse for shareholders.”  

Evergrande acting CEO Siu Shawn told Chinese media that the company would ensure home-building projects will still be delivered despite the liquidation order. The ruling will not affect the operations of Evergrande’s onshore and offshore units, he added.

The company’s stock fell by more than 20% in Hong Kong after the liquidation ruling was announced. Trading in the shares has now been suspended.

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Replacing Russian gas with liquefied natural gas (LNG) from the US has exposed the EU’s energy system to major security risks, Bloomberg has reported, citing industry experts.

The US, which started exporting its shale gas only in 2016, is currently the second-biggest gas supplier to the EU after Norway. In 2023, the US became the world’s top LNG exporter. 

Many EU states dramatically increased LNG purchases in 2023 following the drop in pipeline gas flows from Russia due to Ukraine-related sanctions and the sabotage of the Nord Stream pipelines in September 2022, which rendered them inoperable. 

“European reliance on US LNG will only grow, if more Russian gas does not reappear and the Qataris decide not to engage in a price war for market share,” Ira Joseph, a senior research associate at the Center on Global Energy Policy at Columbia University, told the news agency. However, the analyst added that changes in US policy could pose a major risk. 

In fact, US President Joe Biden recently ordered a temporary pause on approving pending and future applications for LNG exports, citing concerns over climate change. The halt is expected to allow the Department of Energy to update the economic and environmental guidelines it uses when approving new export licenses.

Biden’s announcement “does not keep faith with that pledge,” according to Fred Hutchison, president and CEO of LNG Allies, as cited by Bloomberg.

Energy Aspects gas analyst David Seduski believes that the halt will “almost certainly be undone” if the Republicans retake the White House.

“This could be a pause for political purposes, to appease Biden’s base in the run-up to the general election,” he said. “Or it could be a longer halt to permitting that clamps down on the chances of these terminals being approved longer term.”

An unnamed senior EU official told the agency that the European Commission is not concerned about the bloc’s growing dependency on US LNG because there aren’t the same levels of political risks as with Russia.

However, analysts highlight potential challenges ahead. Jonty Shepard, vice president of global LNG trading and origination at BP, had previously warned that the growing reliance on US gas is creating a “concentration risk” for the entire sector.

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Global nuclear power generation is set to reach an all-time high in 2025 as more and more countries turn to the technology as part of plans to reduce emissions, according to the latest forecast from the International Energy Agency (IEA).  

Nuclear generation is in the midst of a resurgence and is expected to rise by nearly 3% annually on average through 2026, the IEA forecasts. The growth will be driven primarily by new plants in China and India, although South Korea and Europe are also set to see new nuclear facilities come online, according to the agency.   

France is expected to increase its nuclear power output after maintenance of its facilities is completed, while Japan is on course to restart some of its nuclear power plants.

The UK, Sweden, and Switzerland are also among the countries that are on track to ramp up domestic nuclear power generation by extending the operating lives of existing plants and building new ones in a bid to boost energy security as electricity demand soars.  

Growing renewable energy capacity and the global nuclear renaissance will provide more low-emission power generation over the next three years, according to the IEA.

In the wake of the 2022 energy crisis largely triggered by Western sanctions on Russia, which banned affordable Russian energy, many governments opted to revive their nuclear sector. A number of countries, most notably Japan and Germany, had pulled out of the industry following the Fukushima disaster in 2011.   

The IEA also noted that the influence of Russia and China in the nuclear sector is growing and that the two countries are providing the technology for 70% of the reactors currently under construction worldwide.

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A million more people were living in poverty in the UK in 2021-22 than in the previous 12-month period as the cost-of-living crisis worsened, new analysis by the Joseph Rowntree Foundation (JRF) has found. 

The charity’s report says 14.4 million people, including 4.2 million children, were in poverty in 2021-22, with an increasing number unable to afford food or pay their energy bills. This is up from a total of 13.4 million people – including 3.9 million children – the year before.

“It has been almost twenty years and six Prime Ministers since the last prolonged period of falling poverty in the UK. Instead, over the last two decades, we have seen poverty deepen, with more and more families falling further and further below the poverty line,” said Group Chief Executive of the JRF Paul Kissack.

Six million people had incomes far below the standard poverty line and were thus in ‘very deep’ poverty in 2021-22, according to the report. The poverty gap, or the amount of money needed to bring the incomes of the poorest people back to the poverty line, has grown wider. Those in this category would on average need to more than double their income to escape poverty, the JFR wrote. A couple with two children under the age of 14 is reportedly defined as being in ‘very deep’ poverty if their annual household income is below £14,600 ($18,519).

The JFR report also raised concerns about the future levels of hardship since inflation in the country is still running at twice the target level, benefits are taking time to catch up with rising prices, employment is starting to fall, earnings are still below their 2008 levels, and housing costs are increasing rapidly.

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The construction of the Power of Siberia 2 gas pipeline linking Russia to China via Mongolia is expected to be postponed, the Financial Times has reported, citing Mongolian Prime Minister Luvsannamsrain Oyun-Erdene.

Earlier this week, Russian Deputy Prime Minister Aleksandr Novak said the timing and cost of building the mega pipeline, which would deliver Russian natural gas to China, will be determined after Moscow and Beijing sign binding agreements.

Gazprom, which will operate Power of Siberia 2, has said it aims to begin gas deliveries by 2030.

The two sides need more time to conduct economic studies on the project, according to Oyun-Erdene, who previously said construction of the 3,550-kilometre long pipeline would start in 2024.

“The Chinese and Russian sides are still doing the calculations and estimations and they are working on the economic benefits,” he told the media outlet, adding that record global gas prices during the past two years have complicated the talks.

The PM added that Mongolia was willing to start construction work once Russia and China are ready.

The analyst said Chinese government payment data shows that Russia is paid significantly less than Turkmenistan or Uzbekistan, which also sell natural gas to China.

Russia has dramatically increased its fuel supplies to China, which is now ranked as the world’s second-largest oil consumer, since the EU slashed imports from Russia as part of Ukraine-related sanctions.

Power of Siberia 2, if completed, will deliver natural gas from Russia’s Yamal peninsula, which – prior to the Ukraine conflict – used to serve the EU market through several pipelines, including Nord Stream, which was sabotaged in September 2022.

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Freight through the Suez Canal has plummeted by 45% in the two months since Houthi rebel attacks on vessels in the Red Sea forced shipping companies to divert shipments, sending shockwaves through global supply chains, the UN Conference on Trade and Development (UNCTAD), reported this week.

Jan Hoffmann, chief of trade logistics at UNCTAD, warned that shipping costs have already surged and energy and food costs are being affected, raising inflation risks.

“We are very concerned,” he told reporters. “We are seeing delays, higher costs, higher greenhouse gas emissions.”

Major players in the shipping industry have temporarily stopped using the Suez Canal, a critical maritime trade route connecting the Mediterranean Sea to the Red Sea and a vital sea lane for energy and cargo between Asia and Europe.

Yemen-based Houthi rebels have carried out dozens of drone and missile attacks in the Red Sea since the beginning of the Israel-Hamas war in October.

Hoffmann warned that a number of crucial global trade routes are facing issues, not only due to the attacks in the Red Sea, but also because of the Ukraine conflict and low water levels in the Panama Canal.

“Maritime transport is really the lifeline of global trade,” he said. “These disruptions underline their vulnerability to geopolitics, tensions, and climate changes.” 

The Suez Canal handles up to 15% of global trade and about 20% of container traffic. Container ship transits through the canal are down 67% compared to a year ago. The impact on liquefied natural gas has been the largest, as shipments have stopped altogether via the key trade route since January 16, according to UNCTAD.

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Former US President Donald Trump has told advisers he wants to impose a 60% tariff on all imports from China if he wins this year’s election, the Washington Post reported on Saturday, citing three unnamed people familiar with the plan.

The measure would trigger major disruptions to the US and to economies around the world, which would far exceed the impact of the trade wars initiated by Trump during his first presidential term, economists from both the Democratic and Republican parties told the newspaper.

During his current presidential campaign, Trump has pledged to revoke China’s status as a “most favored nation” for trade. The designation is applied to almost all nations that do business with the US, and the White House can introduce any tariffs on imported goods from countries that do not have it.

According to the GOP front-runner, tariffs on foreign goods raise vital revenue for the US budget, and current import levies are among the world’s lowest.

China ranks third in the list of US trading partners, behind Mexico and Canada. In November, Beijing accounted for 11.7% of total US foreign trade.

“The 2018 to 2019 trade war was immensely damaging, and this would go so far beyond that it’s hard to even compare to that,” Erica York, senior economist at the Tax Foundation, a right-leaning think tank that opposes the tariffs, told the Washington Post. “This threatens to upend and fragment global trade to an extent we haven’t seen in centuries.”

“If a Trump administration were to put up much higher tariffs on imports from China, American companies would lose most of their market share in both China and many third countries,” Posen said, having called the trade proposals “lunacy.”

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Apple’s smartphone sales in China dropped by 2.1% year-on-year in the fourth quarter of last year owing to increased competition from local brands, led by Huawei, figures from research firm International Data Corporation (IDC) released this week showed.  

The decrease highlights the challenges Apple faces in its third-largest market, where some Chinese companies and government entities bar the use of its devices in retaliation for restrictions the US placed on Chinese apps for what it described as security reasons.  

Although Huawei’s smartphone sales were hit hard by US sanctions, the tech giant staged a comeback last year, with a 36.2% surge in the final quarter of 2023, the IDC figures showed.   

Huawei became the fourth-largest smartphone seller in China during that period, with a 13.9% market share, up from 10.3% in the same quarter the previous year.  

However, for the full year, Apple outperformed Vivo to become the top smartphone vendor in China, capturing a 17.3% market share.   

Earlier this month, analysts from Jefferies Financial Group predicted that iPhone sales in China could reach a double-digit drop this year, whereas Huawei is anticipated to strengthen its market presence with sales rising significantly to around 64 million units in 2024. This would mark a notable rise from the fewer than 35 million units estimated to have been sold in 2023.

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The US economy is heading towards disaster as the vast national debt continues to mount, JPMorgan CEO Jamie Dimon said in an interview with Fox News earlier this week.

According to the chief executive of the nation’s largest bank, the situation urgently needs to be tackled by the government before it causes a major economic crisis.

“It is a cliff, we see the cliff,” Dimon said. “It’s about 10 years out, we’re going 60 miles an hour [toward it].”

The top executive agreed with the view of former House Speaker Paul Ryan, who has called the snowballing debt “the most predictable crisis we’ve ever had.” The warnings were issued by Ryan and Dimon during a panel discussion at the Bipartisan Policy Center on Friday.

US government federal debt topped $34 trillion for the first time in history at the end of December. It now amounts to about $102,000 for an average American family of three. In 2023 alone, it grew by more than $4 trillion.

US total public debt is roughly equivalent to the economies of China, Germany, Japan, India, and the UK combined, as pointed out by the Peter G. Peterson Foundation, a nonpartisan fiscal policy group in New York.

“So far, that [the public debt] has been quite manageable,” she said, calling for steps “to make sure that our deficits come down and remain at manageable levels.”

The huge amount is comprised of what the federal government owes to creditors, including individuals, such as citizens and foreign investors, as well as states or large funds. Washington continues to borrow money to cover a budget deficit that has been running for more than 20 years.

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The number of tourists coming to Russia may rise significantly in 2024 thanks to the introduction last year of electronic visas and growing demand from Asia, according to Aleksandr Musikhin, the CEO of Intourist and committee head of the Association of Tour Operators of Russia (ATOR).

Musikhin told a press conference this week that nearly 430,000 foreign tourists visited Russia from January to September 2023. Organized tourist groups arrived mainly from China, Vietnam, India, Indonesia, Iran, and the UAE. Individual tourists came from Latin America, the Middle East, and Europe.

Among the factors driving the growth in foreign tourism in Russia, Musikhin named the electronic visa scheme and the weak ruble, which made pricing for hotels and services more appealing.

Electronic visas, which were launched in August, simplify travel to Russia for the citizens of 55 countries. The application process takes four days and is based on the use of an online portal or mobile app. It provides foreigners a single entry into Russia and allows them to stay up to two weeks. The cost is about $52. Such visas have proven to be particularly popular among tourists from India, Türkiye, China, Iran, Vietnam, Saudi Arabia, Singapore, the Netherlands, France, Italy, and Spain. Russia also launched reciprocal visa-free group tours with China and Iran, and offered the same to India.

The Russian Ministry of Economic Development is seeking to boost the incoming tourist flow to 16 million tourists by 2030. They are expected to come from 17 priority countries in the Middle East and Asia.

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Finland is preparing to completely prohibit Russian citizens from purchasing real estate in the country, Defense Minister Antti Hakkanen said in a statement published on Finland’s official government website on Friday.

The country amended its legislation on property transactions involving persons or companies outside the EU last year but now wants to further tighten controls by targeting Russians, citing “changes in the security situation.”

According to Hakkanen, the government has formed a cross-administrative working group tasked with assessing the possibility of a complete ban on real estate acquisition by Russians and preparing the final legislation.

“Russia, which is waging a war of aggression in Europe, has demonstrated its readiness to take advantage of the various soft spots it finds in Western societies. Border security, critical infrastructure, and real estate holdings must be protected in advance so that destabilization of society cannot be achieved through them,” the minister stated.

He speculated that Russia “can also try to use real estate holdings for some sort of influence campaigns.”

“It is difficult to control and assess in advance what kind of holdings can cause problems. That is why we plan to start with a complete ban, to which we can consider providing exceptions,” Hakkanen added. He also noted, however, that the legislation is a work in progress still far from being finalized.

Hakkanen said earlier that he expected the changes to cover not only the sales of property but also rentals. The working group is expected to devise the legislation by March 31, 2024. Moscow has not yet commented on this development.

Russian Foreign Ministry spokeswoman Maria Zakharova called these plans “another confirmation of the Russophobic nature of the policy of the current Finnish authorities, who disregard the rule of law.” She warned that such actions will not go unanswered.

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An ad campaign by IKEA in Portugal poking fun at the country’s recent corruption scandal has gone viral on social media this week.

IKEA released billboards in Lisbon promoting a bookcase with the following slogan: “Good for storing books. Or €75,800” in reference to the amount of cash found hidden in envelopes on a bookshelf during police raids at the office of Vitor Escaria, the ex-chief of staff to former Prime Minister Antonio Costa.

Costa subsequently fired Escaria and then resigned himself in November amid a corruption investigation.

In a statement quoted by local media, IKEA said that it likes to develop campaigns “that reflect their real lives” and that help relieve “the tension of a world with nerves increasingly on edge.” 

Apart from causing a stir on social media, the campaign prompted several other major retailers to issue similar ads.

An ad by French multinational FNAC reads: “There are many bookshelves, but nothing compares to the (cultural) richness of ours.”

Office supply giant Staples went for: “But does anyone keep that in their living room, IKEA?” 

Furniture and home decor retailer Gato Preto advertised a sofa with the caption: “At Gato Preto, there is a better hiding place.” 

An ad by publishing house Penguin Livros reads: “All we need is €75,800.” 

Furniture retailer Moviflor boasts that one of its wardrobes “fits much more than €75,800, but one can have it for a lot less.” 

IKEA, meanwhile, stressed that it had no intention of “contributing in any way to the party debate or to the current pre-election context in the country.” Snap legislative elections will take place in Portugal on March 10.

The Swedish furniture giant says it plans to circulate more billboards of a similar nature in Portuguese cities over the next few weeks.

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On a sunny day in August 1955 Boeing test pilot Alvin ‘Tex’ Johnston was to take the Dash-80, the prototype of the Boeing 707, out for a test flight at an annual hydroplane race over Lake Washington near Seattle. The large crowd gathered for the event included many of the top names in the aviation industry.

Rather than perform a simple flyover, the swaggering Tex, who got his start flying crazy loops on daredevil flights on a tri-motor plane across the dusty plains of Kansas, aimed to impress the gathered luminaries. Instead, he put the plane into a stunning barnstormer-like double barrel roll that left the crowd below astonished and his boss, Boeing CEO Bill Allen, mortified that the newly crafted jet was out of control and about to crash.

It was a fitting gesture for a plane whose very genesis was the result of a huge gamble. As the 1950s dawned, Boeing was at a crossroads. Having thus far thrived as a manufacturer of military aircraft whose modest forays into commercial aviation had met little success, the company needed direction as its defense contracts had mostly dried up with World War II over and the Korean War winding down.

It was at this time that CEO Bill Allen decided to bet the house – $16 million to be exact, a huge sum in those days – on building a jet transport prototype. It is hard to overstate how ambitious this project was. Not a single customer had committed to buying the plane, and it was hardly clear that such an aircraft would be viable in the market. “The only thing wrong with the jet planes of today,” said the head of TransWorld Airlines around that time, “is that they won’t make any money.”

Failure may very well have meant the end of the company. It was a resounding success. After a few lonely, uncertain years, an aircraft was built that would shrink the world and usher in the glittering jet age. A few short years later, the company would embark on another hugely expensive gamble that paid off when it undertook to build the six-story-high, 225-foot-long Boeing 747. 

In 1957, when the 707 made its maiden flight, fewer than one in ten American adults had ever traveled in an airplane. By 1990, more adult Americans had flown than owned a car.

For many decades, Boeing was a decidedly unpretentious, engineer-driven company with a culture emphasizing both dazzling innovation and the sober virtue of impeccable craftsmanship. It was a place where the top managers held patents and could talk shop with the floor workers.

Even as late as the mid-1990s, the company’s chief financial officer reportedly kept his distance from Wall Street and answered colleagues’ requests for basic financial data with a dismissive, “Tell them not to worry.”

In hindsight, this principled aloofness has a bit of Shakespearean “last of all the Romans” feel. The company would soon be transformed beyond recognition.

Great companies invariably embody some intangible quality of the nations that spawned and nurtured them. Boeing came to represent in distilled and mythologized form something that Americans had come to see as forming an essential part of their national identity: unpretentious and focused on the task at hand. But if Boeing was the quintessential American company on the way up, it came to embody many of the country’s ills on the way down. Few companies have traced an arc of ascendancy and decline that so closely mirrors the nation’s own trajectory.

The self-effacing and introspective Bill Allen, Boeing’s genteel CEO through the post-war era and the man behind the 707 gamble, described his company’s ethos as “to eat, breathe, and sleep the world of aeronautics.” But a new generation of leaders was emerging who brought new priorities and a new vocabulary. It was no longer about making great airplanes; it was about “moving up the value chain.” What it was really about was maximizing shareholder value.

Now looming like a colossus over Boeing was the figure of Harry Stonecipher, McDonnell’s CEO. The blunt, hard-nosed son of a coal miner, Stonecipher was known for vicious cost-cutting, emails written in all caps – and for jettisoning executives who didn’t hit financial targets. But Stonecipher was a ‘winner’: McDonnell’s stock price had risen fourfold under his tenure.

What predictably ensued was nothing short of a complete transformation of Boeing from being a company run by engineers to one that prized financial profit over all, and was willing to cut all manner of corners to reduce costs and boost returns. The quality of the product was, to put it mildly, severely compromised.

Downstream from these changes are the spectacular failures we all know about: the outrageous cost overruns, delays and production issues in making the Boeing 787, which ended up being temporarily grounded for battery fires that regulators attributed to flaws in manufacturing, insufficient testing and a poor understanding of an innovative battery; the abject failure of the jimmy-rigged 737 MAX, which saw two deadly crashes and, most recently, a harrowing incident in which a sealed-off emergency exit blew out mid-air in an Alaska Airlines flight, leaving a gaping hole in the fuselage. 

The writer David Foster Wallace once wrote that “America… is a country of many contradictions, and a big contradiction for a long time has been between a very aggressive form of capitalism and consumerism against what might be called a kind of moral or civic impulse.”

What is evident is that starting roughly in the 1970s, this “aggressive form of capitalism” became ascendant in the US and for a long time overwhelmed – and is arguably still overwhelming – the “moral and civic impulse.” However, to view this as simply a moral failing is to miss the greater economic pressures at work.

The ‘70s were, in the words of historian Judith Stein, the “pivotal decade” that “sealed a society-wide transition from industry to finance, factory floor to trading floor, [and] production to consumption.” America had emerged from World War II with unquestioned manufacturing supremacy, but within a few short decades, US companies had begun falling behind. Whereas Japan, Germany, and, later on, China invested heavily in their industrial bases in the post-war period, the US came to emphasize innovation at the expense of capital investment. The 1970s were when nascent industrial powerhouse Japan pulled off its so-called ‘revolution of quality,’ which went a long way toward putting American manufacturers on the back foot.

Bloated and increasingly uncompetitive American companies needed a way forward – and that way forward can most succinctly be summed up as a switch in resource-allocation strategies from value creation to value extraction. Whereas the highly vertically integrated American companies of old practiced a ‘retain-and-reinvest’ approach, the new regime was one of ‘downsize-and-distribute,’ to use a phrase coined by economist William Lazonick.

This can be described, depending on one’s point of view, as either maximizing the value of the company or asset-stripping it for the benefit of executives and shareholders – with a corresponding hemorrhaging of the workforce.

If, as Stein asserts, the US went from “factory floor to trading floor,” it necessarily meant a step up in prominence for Wall Street analysts and a step down for the factory managers – or, in Boeing’s case, the engineers. So what did the denizens of Wall Street want? They wanted to see the unwieldy industrial giants generate a better return on their assets – in finance lingo, they wanted a higher RONA (return on net assets). 

Now, a naive observer might assume that the path to achieving this lies in using one’s assets more efficiently to generate more money. But there’s another way to increase RONA that proved a lot easier: generate (roughly) the same amount of money with fewer assets and lower costs. A constant numerator divided by a lower denominator gives a higher number. Outsourcing does exactly that: it removes assets from the balance sheet and that is precisely the path Boeing and many others went down under the ‘downsize-and-distribute’ model. The problem in Boeing’s case was that the supply chain for building an airplane is so complex that it made it practically impossible for the company to maintain quality standards.

Boeing’s embrace of this new regime can be described as nothing short of whole-hearted. The figures are staggering. Over the past decade, it has directed an incredible 92% of its cashflow back to shareholders in the form of dividends and buybacks. 

Since 1998, the company has spent a staggering $63.5 billion on share buybacks. This, according to financial analyst Scott Hamilton, is equivalent to about four wide-body and five or six narrow-body airplane programs at today’s costs.

But Wall Street doesn’t need airplanes, it needs dividends. Hamilton recounts how at the company’s annual shareholder meeting in April 2020, CEO David Calhoun gave conflicting signals about a new airplane program and also about a return to a dividend policy. The following day, Melius Research gave the quintessential Wall Street view in a note for clients: “We struggle to see how the business case for a new airplane closes favorably these days.” It was a vote for dividends. In other words, today’s profits trump the company’s future.

Historians and economists will have to parse through the implications of a currency gaining in stature precisely at a time when a country’s manufacturing base recedes, but such a circumstance could hardly fail to push the entire system into the arms of Wall Street.

Harder to comprehend, meanwhile, is how the generation of leaders exemplified by the likes of Harry Stonecipher seemed to have completely embraced this transformation of the American economy.

In an interview with the Chicago Tribune in 2004, he said: “When people say I changed the culture of Boeing, that was the intent, so that it’s run like a business rather than a great engineering firm.”

What is startling about this is not so much Stonecipher’s actions at Boeing, but that he felt free to absolutely lay bare his motives. Had he been out of sync with the zeitgeist of the time, he may have still pursued the same aims out of whatever personal motives – such as greed – but, fearing opprobrium, would have done so much more furtively. That he felt he could unabashedly broadcast the destruction of Boeing’s finely hewn, decades-old culture says as much about the country as it does about the man.

US plans to confiscate Russian assets frozen abroad are forcing other countries to consider ditching the dollar, as the currency’s use as a political tool undermines its credibility, Russia’s ambassador to the US, Anatoly Antonov, has said.

Speaking at a press briefing in Washington on Saturday, the envoy stressed that Russia considers any attempts to tap its sovereign assets illegal.

“The White House’s ‘creative’ ideas motivated by selfish political goals, such as the confiscation of Russian state assets, not only contradict international law but also go against common sense,” Antonov stated. He added that these actions already “helped” drive bilateral relations between Moscow and Washington “into an impasse.”

“In addition, they force sensible national capitals to seriously consider abandoning the dollar. Once again, this confirms the urgent need for global transition towards multipolarity,” the diplomat emphasized. Antonov earlier warned that Russia would be forced to reciprocate if Western countries decide to confiscate its assets.

The EU, US, Japan, and Canada froze about $300 billion of Russian central bank assets in 2022 due to Ukraine-related sanctions against Moscow. Some $200 billion is held in the EU, largely in the Belgian clearing house Euroclear.

Brussels is currently working on plans to apply a windfall tax to the profits derived from these funds while opting not to confiscate the frozen money outright. Many in the bloc are worried that it could undermine the Eurozone’s economic stability.

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The cost of shipping fuel by sea has in some cases soared above $100,000 a day due to continued disruptions in the Suez Canal and Red Sea caused by attacks by the Houthi rebels, Bloomberg reported this week.

According to data from the Baltic Exchange in London, the price of shipping oil and refined products from the Middle East to Japan surged by 3% on Thursday alone, to $101,000 a day, the highest cost for that particular route since 2020.

The same trend has been observed for vessels carrying fuel from the Middle East to Europe. Tanker costs on this route have surged to within the range of $97,000-$117,000 per day, depending on the size of the ship.

The Houthis, an Islamist group that controls a large part of Yemen, have been attacking and hijacking ships crossing the vital waterway that handles about 15% of global trade in what they claim is a show of solidarity with the Palestinians. Despite the US and allies having deployed a naval taskforce to the area to safeguard shipping, many freight companies have halted travel through the waterway and instead make the far longer and more expensive journey around the Cape of Good Hope in Africa.

According to an earlier report by the Wall Street Journal, citing data from London-based Drewry Shipping Consultants, the average worldwide cost of shipping a 40-foot container jumped 23% to $3,777 in the week ending January 18, more than double what it cost only a month prior.

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A majority of Czechs are skeptical about transitioning to the euro, believing that adopting the single currency would carry inflationary risks and would not benefit the country, the media outlet iRozhlas reported this week, citing the latest poll.  

Some 68% of respondents consider shifting from the Czech crown to the single currency a disadvantage. A further 21% viewed adopting the euro positively, while 11% were ambivalent on the matter, the survey of over 1,000 respondents conducted last week by the Median agency for Czech Radio revealed. The commitment to eventually switching to the euro was a key condition for the Czech Republic to join the EU back in 2004. But after almost two decades, Prague is nowhere close.  

One of the authors of the survey, Ivan Cuker, attributed the public skepticism to concerns over possible price increases once the country adopts the euro.   

“Mainly students say that the euro is beneficial for them. Some 45% of them said so,” he noted.  

While some economists compared the Czech Republic’s membership in the EU without accepting the euro to being in the position of a “scantily clad princess,” others acknowledged inflationary risks and supported the idea of holding a referendum on the issue. Metropolitan University economist Dominik Stroukal described the Eurozone as a “non-optimal” currency union at the moment.  

“It makes no sense to get rid of monetary policy when the Czech one is working right now,” he said.  

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Gas production in Russia is expected to rise by 4% this year, according to the International Energy Agency’s (IEA) Gas Market Report published on Friday.

The Paris-based energy watchdog pegged Russian gas output in 2023 reaching 640 billion cubic meters (bcm), down 5% from 2022. For this year, however, the agency expects production to reach at least 664 bcm. It also expects the country’s domestic gas consumption to rise, by 2% to 503 bcm.

The IEA’s figures for 2023 correspond with Russia’s own calculations. Earlier this month, Russian Deputy Prime Minister Aleksandr Novak announced that gas production was down by 5.5% last year, to 636.7 bcm, while the country’s pipeline gas exports came in at 91.4 bcm.

The IEA expects Russia’s gas exports to remain close to their 2023 levels in 2024.

Meanwhile, according to the report, global gas production is likely to grow by roughly 3% this year, while supply will remain tight. Gas demand, which slumped by 1.5% in 2022, is expected to rise by 2.5%, or roughly 100 bcm, but stay below the pre-energy crisis levels of 2021.

“The global gas market is entering a new period as the world gradually emerges from an energy crisis that had profound impacts on both the supply and demand sides,” Keisuke Sadamori, director of energy markets and security at the IEA, said in the report.

“We expect to see solid growth in global gas demand this year as prices have come down to relatively manageable levels. But the speed at which this new demand can be met will be critical, particularly as supplies are tight and substantial new LNG capacity will only come online after 2024.” 

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A petroleum-products tanker operated on behalf of Trafigura was struck by a Houthi missile in the Gulf of Aden after transiting the Red Sea, several outlets reported on Friday, citing the commodities-trading giant. According to Marine Traffic, the Marshall Islands-flagged Marlin Luanda was traveling from Greece to Singapore. The vessel caught fire after the attack.

“Firefighting equipment on board is being deployed to suppress and control the fire caused in one cargo tank on the starboard side. We remain in contact with the vessel and are monitoring the situation carefully. Military ships in the region are [on their] way to provide assistance,” Trafigura stated on its website.

A company spokesperson told Bloomberg that the vessel is carrying Russian-origin naphtha – a light-end oil product primarily used to make plastics and petrochemicals. The tanker collected the cargo via a so-called ship-to-ship transfer near Lakonikos Bay in southern Greece, according to data from analytics firm Kpler.

Houthi rebels have claimed they carried out the strike on the ship. The Islamist group, which controls a large part of Yemen, has been attacking vessels crossing the vital waterway between the Red Sea and the Suez Canal since the escalation of the Israel-Palestine conflict, in what it claims is a show of solidarity with the Palestinians. Amid the attacks, many shipping companies have suspended travel in the region.

Last month, a US-led coalition deployed a naval taskforce to the area to safeguard shipping, and began striking Houthi targets in Yemen. In addition, the US and UK imposed sanctions against the group. The Houthis, in turn, started attacking ships linked with these countries.

“As for all other countries, including Russia and China, their shipping in the region is not threatened. Moreover, we are ready to ensure the safety of the passage of their ships in the Red Sea, because free navigation in the area is important for our country,” he emphasized.

Moscow has not yet commented on the latest strike. It has repeatedly called on the Houthis to stop attacks on ships traversing the waterway but has also condemned the US and UK attacks on targets in Yemen, saying these would only escalate hostilities in the region.

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Using the euro as a tool in sanctions wars and political disputes would harm the currency’s image and standing, Bank of Italy Governor Fabio Panetta warned on Friday. He was commenting on discussions in Brussels regarding frozen Russian assets.

The EU, US, Japan and Canada froze some $300 billion of Russian central bank assets in 2022 as part of Ukraine-related sanctions against Moscow. Some $200 billion of that is held in the EU, largely in the Belgian clearing house Euroclear.

Brussels is currently working on plans to apply a windfall tax to the profits Euroclear is making on the frozen funds, while opting not to seize the immobilized money outright. However, Italy is one of several EU member states, including Germany and France, that have been skeptical of moves involving the assets, arguing that using them could prompt investors from other countries to doubt the safety of their own holdings in the EU and quit the bloc’s market, ultimately weakening the euro.

“This power must be used wisely,” Panetta said, referring to euro’s standing as a global reserve currency.

“International relations are part of a ‘repeated game’: weaponizing a currency inevitably reduces its attractiveness and encourages the emergence of alternatives,” he warned at an event in Riga, marking the 10th anniversary of Latvia adopting the euro.

According to the official, the recent surge in the use of the yuan in trade between China and Russia is “instructive in this respect,” because it was Western sanctions that prompted the trend, as they made it difficult for Russia to use US dollars and euros in cross-border trade.

The official warned if the need to “be alert to the possibility that politics will have a greater impact on international currencies in the coming years.”

Western currencies have been largely phased out in Russia-China trade, as nearly 95% of all transactions between the countries are now carried out either in rubles or yuan. Russia is not the only major economy to use the Chinese currency for trade settlements, as more and more nations seek alternatives to the dollar and euro. These include Argentina, Saudi Arabia, Brazil and Iran.

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The UK purchased a record £3.5 billion ($4.4 billion) worth of electricity from EU countries last year as renewable energy failed to keep up with demand following shutdowns of coal and nuclear power plants, The Telegraph has reported this week, citing research from London Stock Exchange (LSEG) Power Research.

The electricity imports from France, Norway, Belgium, and the Netherlands accounted for 12% of net supply, according to the outlet. France accounted for about £1.5 billion of power sold to the UK in the year through November, while Norway was responsible for around £500 million, the data shows.

The electricity is brought to the UK via a growing network of interconnector cables designed to boost the collective resilience and energy security of neighboring countries, according to the outlet. “But closures of British power stations mean the traffic is increasingly one-way with the UK instead becoming dependent on its neighbors,” The Telegraph wrote.

Angus MacNeil, who heads up a parliamentary energy security committee, echoed these concerns, telling the outlet: “The French will be rubbing their hands – it’s easy money for them.” He added that “the ideal is for the flows to be neutral overall in terms of both the flows of power and of money.” 

The recent closures of coal-fired and nuclear power stations have seriously impacted Britain’s capacity to generate electricity. Meanwhile, energy generated by wind and solar farms has not been sufficient to meet the growing demand. Wind speeds last year were below the 20-year average for almost the entire year, according to Met Office data.

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Investors poured nearly $12 billion into Chinese equity funds in the week ending this past Wednesday, Reuters reported on Friday, citing data compiled by Bank of America. It was the largest weekly inflow since 2015 and the second largest on record, according to analysts.

The inflow is a good sign for struggling Chinese stocks, which have lost about $6 trillion over the past three years amid the country’s economic troubles – such as deflation, debt and a crippling real estate crisis – following the Covid-19 pandemic. According to data cited by Reuters, onshore Chinese blue-chip stocks are currently trading near their lowest level in five years, while the Hong Kong benchmark is at its lowest in more than a year.

The latest surge allocations to Chinese stocks follows Beijing’s recent efforts to support the country’s economy, which have included measures to prop up stocks. The central bank announced earlier this week that it would reduce reserve requirements for banks, a move that frees up more liquidity for lending to the economy. Beijing additionally announced measures to ease the liquidity crunch facing real estate developers by allocating 2 trillion yuan ($278 billion) to buy their shares. Operations were also carried out in the foreign exchange market aimed at supporting the yuan.

Buying Chinese shares is currently “the world’s most enticing contrarian long trade’,” Michael Hartnett, the chief strategist of Bank of America’s global research team, told Bloomberg. Earlier, Bridgewater Associates told investors it was “moderately bullish” on Chinese stocks, while Hong Kong-based financial services company Gavekal said Chinese stocks offered the best value in the world, according to its note to Bloomberg.

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US President Joe Biden has ordered a pause on liquefied natural gas (LNG) exports from new projects in the country, citing their potential contribution to climate change. Energy costs in Western Europe have skyrocketed since nations such as Germany switched from Russian gas to American LNG, but Biden insists the continent doesn’t currently need additional supplies. 

The pause will allow the US Department of Energy (DOE) to update the economic and environmental guidelines it uses when approving new export licenses, and will last for several months. 

“During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment,” Biden said in a statement on Friday. The president added that the pause “sees the climate crisis for what it is: the existential threat of our time.”

According to the White House, roughly half of American LNG exports went to Western Europe last year, and the US has exceeded its annual delivery targets to the EU for each of the last two years. “Today’s announcement will not impact our ability to continue supplying LNG to our allies in the near-term,” Biden claimed in his statement.

German industrial output fell by 2% last year, while the entire economy shrank by 0.3% in the same time period, the country’s Federal Statistical Office reported last week. The office blamed the decline on high inflation, soaring energy prices, and weak foreign demand.

LNG is transported on large tanker ships to regasification plants, where it is heated to return it to a gaseous state. Germany has rushed to bring three such offshore plants online since early 2022, and plans to open three more over the coming months. The US has also built out its LNG export infrastructure to cope with the demand, including the Calcasieu Pass 2 project in Louisiana, which once certified will be the nation’s largest export terminal.

The Calcasieu Pass 2 facility will likely come before the DOE for approval in the coming weeks, where it will be stalled indefinitely by Biden’s pause. With half of the terminal’s output set to go to Germany, a spokesman for the project’s developer, Venture Global, told Reuters last week that the pause would send a “devastating signal to our allies that they can no longer rely on the United States.”

Numerous major Western brands have shed customers and seen profits dented due to boycott campaigns in the Middle East targeting companies seen as supporting Israel in the war in Gaza, Bloomberg reported on Friday.

Israel declared war on Hamas after the latter’s October 7 surprise attack that killed an estimated 1,200 Israelis. An Israeli offensive that followed has resulted in the reported deaths of over 30,000 Palestinians in the enclave, and sparked a wave of anti-Israel boycott movements in majority-Muslim countries of the region.

According to Bloomberg, the shares of Americana Restaurants International, which operates KFC, Pizza Hut, Krispy Kreme, and Hardee’s franchises in the Middle East, have dropped by 27% on the Saudi stock exchange in the past three months. Analysts expect the companies’ first-quarter profits to plunge on account of the boycotts.

Coca-Cola’s Turkish distributor saw sales volumes drop by 22% in the fourth quarter of 2023 against the previous three months, after the country’s parliament joined the boycott movement in November and said it would remove the soft drink from its cafeterias.

McDonald’s franchises in the region have experienced a “meaningful business impact” from boycotts, according to the fast-food giant’s CEO Chris Kempczinski, although he did not disclose the exact scope of the losses. The company has been in hot water among Middle Eastern customers since mid-October, when its franchisee in Israel boasted on social media that it was giving free meals to Israeli soldiers. Other Western corporations, including Starbucks, IBM and Nestle, have also faced boycotts.

“So far, whether McDonald’s or Starbucks, they’re hurting. [The perception that Washington favors Israel] really affects these corporations because America is implicated,” Fawaz Gerges, professor of Middle Eastern politics at the London School of Economics, told Bloomberg, commenting on the trend.

“Suddenly we were bombarded with orders from supermarkets, restaurants, we were trying hard to cope with the demand. Clients would go to restaurants and either ask for our brand or at least refuse to drink those on the boycott list,” he stated.

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The US has extended its lead over China in the race for the globe’s largest economy, Bloomberg reported on Friday.   

The American economy defied forecasts in outperforming China’s last year, according to the media outlet. Many analysts had expected the US to fall into a recession following a series of interest rate hikes by the Federal Reserve, whereas China was expected to post a vibrant and rapid recovery from its Covid lockdowns.  

However, the US managed to avoid a recession, while Beijing has struggled to pull itself out of nearly three years of stringent “zero-Covid” pandemic restrictions, the outlet said.   

“It is a striking turn of fortunes,” said Eswar Prasad, a former head of the International Monetary Fund’s China division. “The strong performance of the US economy, in tandem with all the short-term and long-term headwinds the Chinese economy is facing, renders it a less obvious proposition that China’s GDP will someday overtake that of the US.”  

The US has even managed to widen its advantage, with GDP climbing 6.3% in nominal terms last year, outpacing China’s 4.6% growth.  

Many Western analysts expect China’s growth to slow in the long term due to high debt and a housing crisis that has undermined consumer confidence. For 2024, Chinese GDP growth is widely forecast to come in at 4.5% or below. Such a trend may endure for many years in what economists call secular stagnation.   

Prices are gradually falling to an extent that China hadn’t experienced since the global financial crisis in 2009, a phenomenon known as deflation that could bankrupt heavily indebted households and companies.  

Meanwhile, long-term headwinds for the US economy remain amid its record high budget deficit, which has already topped half a trillion dollars, while the Federal Reserve’s inflation target of 2% is yet to be reached. There are also concerns that the Federal Reserve could stick to its tight monetary policy for too long, which could trigger a downturn, Bloomberg said.   

According to former Federal Reserve economist Julia Coronado, as quoted by the outlet, the risks of a recession in the US are higher now than at the start of 2023.

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Higher freight costs and delays in cargo deliveries amid the Red Sea crisis could drive up global inflation, according to an OilPrice report this week, citing analysts. 

The disruptions to global trade caused by continued Houthi attacks on vessels in the Red Sea have sent shockwaves through global supply chains. Analysts say the repercussions for traffic on the key trade route could continue for months, and ultimately result in a shortage of container ships, which are now using longer routes around the Cape of Good Hope in southern Africa.

“This will strain supply chains and could lead to higher end-product prices, which would fuel inflation just as central banks started to signal rate cuts are in the cards,” OilPrice wrote. Inflation and high interest rates remain a big concern as major economies, which defied predictions of a recession in 2023, could be hit with a downturn this year, experts say.

Central banks could maintain high interest rates for a longer period than currently expected amid the cost-of-living crisis faced by millions of households, according to OilPrice. Europe could be particularly vulnerable to inflation, considering that the Suez Canal is its key maritime trade route from Asia, it noted.

Maritime traffic through the vital sea route, which normally accounts for 15% of global commercial shipping, is down 37% so far in 2024 from a year ago, according to figures from the IMF.

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The UK has insured around a third of all Russian seaborne oil shipments since the start of the Ukraine conflict despite sanctions, according to a report by the Centre for Research on Energy and Clean Air (CREA).   

British firms have covered over £102 billion ($130 billion) worth of Russian oil between March 2022 and November 2023, the CREA revealed in its analysis published last week.  

“Despite the EU/G7 countries’ sanctions on Russian oil, a majority of vessels carrying Russian oil and oil products are owned and/or insured in the EU and G7 countries,” the report reads.  

The price cap on Russian seaborne oil exports was introduced by the EU and G7 countries in December 2022 and was followed by similar restrictions on exports of Russian petroleum products. Under the measure, Western firms are banned from providing insurance and other services on shipments of Russian crude, unless the cargo is purchased at or below $60 per barrel, a level below the current market price.  

The report found that around 33% of all seaborne exports of Russian oil and petroleum products have been transported on tankers insured in the UK since the sanctions took effect until early November 2023.    

It is not illegal to transport or insure Russian oil as long as it is sold below the price cap, Alun Cairns, Conservative MP, said, adding firms must be aware of the possibility that the price ceiling could be breached.  

“I’m concerned that the same focus isn’t there from the international community when it comes to the Russian oil exports,” he said. 

“Russia’s reliance on UK insurance to transport their oil provides the UK with significant leverage which they can use to lower the price cap, and implement better monitoring and enforcement that would considerably lower Russia’s oil export revenues,” the authors of the report noted.   

“It also shows the somewhat posturing nature of the support and aid that the UK provides to Ukraine, while at the same time supporting Russia’s ability” to pursue its “oil trade easily and globally,” the CREA stated.  

The West of England P&I Club covered Russian oil products worth the most at over £17.1 billion ($21.7 billion), followed by NorthStandard, which covered £14.5 billion ($18.5 billion), the data showed.

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Russia raked in record earnings from agricultural exports last year, Agriculture Minister Dmitry Patrushev has announced, citing preliminary estimates.

Speaking at a ministerial meeting on Wednesday, Patrushev said that cross-border sales of agricultural goods brought Moscow more than $45 billion in 2023. He noted that the figure is likely to rise once final calculations are made.

“The production indicators have allowed Russia to reaffirm its status as a net exporter of agricultural products,” the ministry’s press service cited Patrushev as saying.

The minister noted that Russia’s grain harvest amounted to 147 million tons last year, just short of the 157 million record reached in 2022. Milk production increased by 500,000 tons, and meat production surged by 300,000 tons. Fish production was the highest in 30 years, at 5.3 million tons. Output of salmon was particularly high at over 600,000 tons, making Russia the world's top salmon producer, according to the minister.

The Agriculture Ministry earlier estimated that Russia’s grain for export this growing season totaled 60 million tons. The country has been the world’s largest exporter of grain in recent years thanks to bumper harvests and attractive pricing, despite Western sanctions that have hampered the country’s foreign trade. Russia has also been supplying free grain to a number of African countries that are facing food insecurity.

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Microsoft is cutting around 1,900 employees in its gaming unit Activision Blizzard and Xbox this week, CNBC reported on Thursday, citing an internal memo from Microsoft Gaming CEO Phil Spencer.  

The layoffs, which will eliminate around 8% of Microsoft Gaming’s 22,000 staff, are part of a larger “execution plan” that will reduce “areas of overlap,” shortly after the US software giant closed on its $69 billion purchase of Activision Blizzard, its largest ever acquisition, the head of the company’s gaming division said.  

“It’s been a little over three months since the Activision, Blizzard, and King teams joined Microsoft. As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business,” Spencer wrote in a note.  

Microsoft closed its deal for Activision Blizzard, the publisher and developer of several best-selling gaming franchises, in October 2023. The deal boosted the company’s weight in the video-gaming market with popular titles including Call of Duty and Diablo. Experts say the acquisition will help Microsoft compete with industry leader Sony.  

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The timing and cost of the construction of the new mega pipeline Power of Siberia 2, which will deliver Russian natural gas to China, will be determined after Moscow and Beijing sign binding agreements, Deputy Prime Minister Aleksandr Novak announced on Thursday.  

He also revealed that technical and economic analysis had already been carried out and that the resource base and preliminary technological parameters for the new pipeline had been assessed.    

Power of Siberia 2 is expected to allow for up to 50 billion cubic meters (bcm) of gas to be delivered annually from Yamal Region in northern Russia to China via Mongolia. This is nearly as much as the now idle Nord Stream 1 pipeline under the Baltic Sea, which was damaged by explosions in September 2022.  

The deputy prime minister also highlighted soaring gas exports to China via the existing mega pipeline, the Power of Siberia.    

“Russia’s diversification of gas exports to new markets continues with a focus on deeper cooperation with countries in the Asia-Pacific region. We are rapidly increasing gas exports to China via the Power of Siberia pipeline, and a Far Eastern route project with a capacity of 10 bcm is being implemented,” Novak noted.   

Gazprom has reported hitting record daily gas exports to China nine times since the beginning of 2023 and forecasts that gas supplies to Russia’s leading trading partner will grow further thanks to soaring demand.     

Once all the pipelines are fully operational, the volume of Russian gas supplies to China could reach nearly 100 bcm annually.

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German train workers have begun a six-day strike, set to be their longest ever, which analysts warn could end up costing the country’s economy as much as €1 billion ($1.09 billion).

The strike called by the country’s railway union, known as the GDL, began on Tuesday and will last through Monday. The action has brought most passenger and freight rail traffic to a standstill nationwide. Both long-distance and suburban train services are affected by the labor action.

The strike stems from an ongoing dispute between the GDL and rail operator Deutsche Bahn over pay and working hours. The union has been calling for a reduction of working hours from 38 to 35 per week and a wage increase of €555 per month, on top of a one-off payment of €3,000 to compensate for inflation. The walkout is the fourth carried out by the GDL since November.

While Deutsche Bahn made several concessions in its latest offer to the GDL, including pay rises of up to 13% and the chance to reduce the work week by one hour starting in 2026, the union said the proposals were insufficient.

Deutsche Bahn, meanwhile, slammed the new walkout. Company spokesperson Anja Broeker called the action “a strike against the German economy,” as cargo handled by the company includes supplies for power plants, refineries, and other industrial enterprises.

According to Deutsche Bahn, each strike day costs the German economy “a low two-digit million figure.” However, industry experts have warned that the actual losses could be much higher. Michael Groemling of Cologne’s Institute for Economic Research estimates the work stoppage could cost up to €100 million a day, a figure that could rise to as high as €1 billion in the worst-case scenario.

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Electric vehicles (EVs) will never dominate the market and consumers should not be forced to buy them, Toyota Chairman Akio Toyoda stated in comments published on the company’s website on Tuesday.  

Battery-powered vehicles will only ever reach 30% of the global market, while the rest will comprise hybrids, hydrogen fuel-cell, and fuel-burning cars, according to the head of the Japanese carmaker.  

Toyoda believes that EVs should not be developed to the exclusion of other technologies at a time when a billion people worldwide still live without electricity, while battery-powered EVs are expensive and need charging infrastructure.   

Speaking at a business event earlier this month, Toyoda, whose grandfather founded Toyota in Japan in 1937, called for a “multi-pathway approach.” He added that the shift towards EVs will not happen as quickly as many think and that “customers – not regulations or politics – should make that decision,” referring to the net-zero emission targets many Western governments are pushing for.   

Toyoda’s comments come after electric car sales in both the UK and EU weakened toward the end of last year. According to the Society of Motor Manufacturers and Traders, the market share of electric cars in the UK decreased last year as some drivers were reluctant to buy them over fears about their high cost and the lack of charging points.

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Ukraine may allow Russian natural gas to be piped through its territory beyond 2024 when the current deal governing transit is due to expire, Slovak Prime Minister Robert Fico has said.

In a video posted on Facebook after a meeting with his Ukrainian counterpart Denis Shmigal on Wednesday, Fico said a new deal would benefit both Ukraine and Slovakia, as well as a number of other EU countries that still rely on Russian energy.

“Ukraine is open to the transit of Russian gas to Europe after 2024. Work on the details of the agreement may be completed in the near future. The very fact that the transit can continue is excellent news… That means that we in Slovakia will also be able to continue the transit of this gas, which will also benefit Austria and Italy,” Fico said.

Kiev has been reluctant to renew the deal and said on Thursday that it does “not intend to negotiate with the Russians” for an extension. However, the Ukrainian government admitted that it “can negotiate with a European country on the use of its gas transportation network” for further deliveries, Interfax-Ukraine quoted the government’s press service as saying.

The transit line through Ukraine and the European arm of the TurkStream pipeline are now the only two remaining conduits for piped Russian gas to reach Central and Western Europe. The current five-year transit contract between Russia and Ukraine was signed in 2019. Under the deal, Russian energy giant Gazprom agreed to deliver 65 billion cubic meters (bcm) of gas to the EU through Ukraine in 2020, and 40 bcm annually between 2021 and 2024.

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Saudi Arabia has opened its first liquor store in over 70 years, several news outlets reported on Wednesday, citing diplomats. The store is reportedly located in the Diplomatic Quarter in the capital of Riyadh.

The shop will exclusively serve non-Muslim diplomats, who will be required to register to buy alcohol in advance via a mobile app and get a clearance code from the Foreign Ministry, according to a document cited by Reuters. Monthly limits for liquor purchases will also be in place. It is unclear if non-Muslim expatriates outside of diplomatic circles will have access to the store.

Local residents, however, will not be served, and the alcohol ban that has been in place since 1951 in Saudi Arabia is not being rescinded.

Meanwhile, Riyadh on Wednesday confirmed earlier reports that it is preparing new restrictions on alcohol imports within diplomatic circles. According to the Center of International Communication (CIC), the new laws aim to combat the black-market liquor trade.

“This new process will continue to grant and ensure that all diplomats of non-Muslim embassies have access to these products in specified quotas,” the CIC said in a statement to Reuters. CIC did not mention the new store in its statement, however.

Saudi Arabia is not the only nation that has an alcohol ban. Others include Kuwait, Iran, the UAE, Pakistan, Oman, Qatar, and several other Muslim-majority countries, though most of them allow non-citizens and non-Muslims to buy and consume liquor.

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Russia’s exports of dairy products increased by 18% year-on-year in 2023, the head of the National Union of Dairy Producers, Artyom Belov, said on Monday, as cited by TASS.

”The growth of consumption and exports has become a major driver for the domestic market over the past several years, particularly in 2023,” Belov said, adding that “consumption rose by nearly 5% versus 2022.”

He added that Russia had begun exporting the types of dairy products for which demand is high globally, including those considering dairy commodities. “For example, exports of powdered skim milk saw a nearly fivefold growth, while suppliers of powdered whey almost tripled,” Belov explained.

Meanwhile, Vladimir Skvortsov, the head of food and processing at the Russian Agriculture Ministry, said that Russian dairy products are now sold to around 60 countries and that almost three-quarters of domestic enterprises export their output.

”Traditionally, Russia sells dairy products to the CIS states and former Soviet countries,” Skvortsov said, adding that the latter category has seen a strong expansion.   

Agriculture Minister Dmitry Patrushev recently noted that raw milk production in the country has been growing over the past five years, adding that it reached 33.5 million metric tons in 2023, nearly 0.5 million metric tons more than during the previous year.

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More than 1.4 million people in the UK have been disconnected from the energy grid since November as consumers struggle to pay their bills this winter, according to new research by state-funded Citizens Advice.

Published on Tuesday, the study shows that over 3 million people have been cut off from energy in the last year because they could not afford to top up their prepayment meter. The average energy debt had increased to £1,835 ($2,332) by the end of 2023, up from £1,579 a year earlier. As the total energy debt pile – currently at £2.9 billion – continues to rise, it is weighing down millions of consumers and risks becoming unsustainable for the sector, the researchers warned.

Data shows that over 5 million people live in homes with an energy debt, and are at greater risk as a result of actions to reduce costs, including turning off the heating or skipping meals.

“The rest of winter looks set to be even worse, with prices rising 5% this month and colder weather seeing typical household energy usage reach its highest point,” Citizens Advice wrote. “We estimate that over 2 million people will disconnect because they can’t afford to top up by the end of winter.” 

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EU member states are preparing to introduce additional sanctions against Russia as the second anniversary of the Ukraine conflict approaches, the Financial Times reported on Wednesday, citing people familiar with the discussions.

The 13th package of restrictions will reportedly involve new travel bans and asset freezes targeting Russian businesses and individuals allegedly linked to Moscow’s military operation in Ukraine. However, it will likely also include a long-delayed agreement on a €50 billion ($54.5 billion) support package for Kiev, along with another €5 billion in annual military assistance. Sources told the news outlet that a decision to set aside the income generated by Russia’s frozen assets in the EU may also be included in the package.

”It’s money, weapons and sanctions at a time when we recognize [the Ukrainians] need encouragement. But two years in, there are limits to what we can do,” an unnamed EU diplomat told the FT.

The new sanctions, however, are unlikely to include a ban on Russian aluminum imports, nor target Russia’s nuclear fuel and liquefied natural gas (LNG) exports, due to a lack of consensus among the member states regarding these measures, sources claimed.

The EU has imposed 12 rounds of sanctions on Russia since the outset of the Russia-Ukraine conflict in February 2022. The measures have been aimed at weakening the country’s economy and making it unable to fund its military operation. However, despite Russia suffering a downturn in the first year of the hostilities, its economy has since stabilized, largely due to timely fiscal policy changes and the re-direction of most of the country’s trade to Asia.

”We need to be aware that the illegal sanctions pressure on our country will not disappear – it will last for a long time. For every success of ours, for every achievement, our opponents will try to respond with new restrictions, bans, even acting to their own detriment… But everyone already understands that their main goal, their dream – to inflict a strategic defeat on Russia – is not destined to come true,” Matvienko said at a parliamentary meeting on Wednesday.

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Major European trade unions are raising the alarm due to the major downturn in the EU’s industrial sectors. The relentless surge in energy prices is dealing a severe blow to a cornerstone of the bloc’s economy and is prompting profound concerns among influential labor organizations. Despite a retreat in energy prices from their 2022 peak, the European Commission forecasts that both gas and electricity prices will remain elevated, posing long-term threats to the EU’s competitiveness.

The grim industrial production data and looming de-industrialization

A recently released Eurostat study presents disconcerting data: Industrial production in the EU dipped by 0.2% month-on-month in November, the third consecutive monthly decline. In year-on-year terms, the figure shows a 5.8% decline.

The production of capital goods, a key indicator of long-term investment, witnessed a substantial 0.8% drop across the EU in November. According to Ludovic Voet, confederal secretary of the European Trade Union Confederation, “these figures are a canary in a coal mine: the biggest hit is in long-term investments in buildings and equipment.” 

Judith Kirton-Darling, deputy general secretary of industriALL Europe, launched a sharp critique of EU policies. She shared with Euractiv her view that stringent debt rules exacerbate the problem in industry and further impede development. Advocating for a more flexible fiscal policy, Kirton-Darling emphasizes the need to promote investments and create high-quality jobs.

Companies seek compensation from EU for losses due to sanctions on Russia

Amid Europe’s industrial woes, a corresponding crisis is developing as major German corporations, including Wintershall Dea, Siemens Mobility, and Volkswagen Bank, pivot to seek compensation from the German government. These claims arise from substantial losses incurred in their Russian operations, a consequence of the sanctions placed on Moscow. Wintershall Dea’s proactive pursuit of compensation for its significant losses set a precedent for other firms grappling with similar adversities. Siemens Mobility and Volkswagen Bank, contending with the repercussions of the Russia sanctions, have now formally petitioned for redress. This convergence of corporate imperatives and geopolitical tremors underscores the intricate dynamics shaping European industries.

The compensation requests underscore the financial strain these businesses have encountered due to political developments. As of mid-November, a total of 16 applications had been submitted by eight companies, totaling €2.8 billion. Siemens and Volkswagen subsequently halted their business activities in Russia, reflecting the broader challenges faced by German companies in the region.

An appeal to European politicians 

Both unions and experts align in their call for a reevaluation of policies to strengthen the EU’s industrial position. Instead of imposing austerity measures, they are being encouraged to actively promote resilient industries and social cohesion. European industry is facing a potentially “irreversible” decline, according to energy market experts. Despite a decrease in energy consumption, analysts argue that this is not indicative of a more energy-efficient future but rather a consequence of widespread de-industrialization. While energy prices have fallen from their record highs in 2022, the impact of this respite on Europe’s industrial activity has been minimal.

The lack of investment and the EU’s restrictive fiscal policy have placed the industry in a precarious situation. Current developments could lead to further division and disillusionment among European workers.

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Burger King Russia will stop selling Twix ice-cream at its restaurants following a recent highly publicized incident where a pet cat with the same name died after being thrown off a train, the news outlet Federal Press reported on Tuesday, citing the company’s marketing director Ivan Shestov.

According to Shestov, the fast-food chain’s decision is aimed at drawing attention to the problem of animal abuse.

“The story of Twix the cat shocked a huge number of Russians. We believe it would be unethical and inhumane to sell Twix ice-cream in such a situation,” he told the news outlet.

The incident with the cat occurred on January 11 when the pet was traveling from Yekaterinburg to St. Petersburg with the stepfather of its owner. During a scheduled stop in Kirov, a train attendant found the animal wandering the carriage after escaping its crate and, apparently thinking it was a stray, threw it off the train.

Twix’s story, including the CCTV footage from the railway station cameras that showed the attendant carrying the cat and throwing it out of the train and into the snow, received broad coverage in the Russian media and has been widely discussed online. It even prompted a mass search in Kirov over a week after Twix’s disappearance. However, the cat was eventually found dead on January 20.

Russian Railways apologized for the incident and announced a review of its rules on transporting animals.

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Argentina’s labor unions have called for a mass strike on Wednesday to protest the economic reforms introduced by President Javier Milei. 

Labor unions representing workers in various industries, including transportation, construction, and the public sector, are set to march in Buenos Aires.

“There will be at least 200,000 marching [in Buenos Aires] and I believe the strike will be total,” Gerardo Martinez, leader of Argentina’s Construction Workers Union, told the Financial Times ahead of the protest. He believes that the government is “breaking the social contract” with its new reforms and that the strike might convince lawmakers to block the measures and start negotiating alternative ways to support the economy.

“We did not choose this path, but unfortunately they gave us no alternative… We are aware that inflation [needs to come down.] We are embarrassed to have a country with this level of poverty. But we can’t accept that the cost of reaching economic stability falls solely on the backs of workers and the middle class,” he stated.

Shortly after Milei took office in December, his government unveiled a series of some 300 “shock therapy” measures aiming at overhauling the country’s economy and reining in public spending. The reforms slashed worker protections, deregulated industries and cut energy and transportation subsidies, among other things. The austerity program is aimed at lifting the country out of a severe economic crisis during which annual inflation has surpassed 200% and more than 40% of Argentinians are now living in poverty.

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Shares of companies linked to Donald Trump have continued to rally this week as the former US president comes closer to securing the Republican Party’s nomination in the 2024 presidential race.

Digital World Acquisition Corp. (DWAC) soared 88% on Monday, hitting its highest level since June 2022, after one of Trump’s main rivals, Florida Governor Ron DeSantis, quit the race on Sunday and threw his support behind the former president. The company’s shares are now up 168% since the start of the year.

Set up as a special purpose acquisition vehicle, also known as a blank check company, DWAC’s purpose is to go public in order to raise money to finance a future merger – in this case with the operator of Trump’s social media platform Truth Social. The merger has seen multiple delays since its IPO in late 2021.

Shares of video-sharing platform Rumble, which cooperates with Trump Media and is popular with conservatives, surged by 36% on Monday and another 33% on Tuesday. In this case, however, the sharp surge is attributable less to Trump’s campaign success and more to the company having inked a video deal with Barstool Sports on Monday.

Software developer Phunware, hired by Trump’s 2020 presidential re-election campaign to build a phone app, jumped 20% on Tuesday.

“Now that Trump appears to be the de facto Republican candidate, that momentum is naturally going to carry over,” Kristi Marvin, a former investment banker and founder of SPACInsider, which collects data on the SPAC market, was quoted as saying by the New York Times. “In a way, it’s a barometer for how he’s doing in the race,” she claimed.

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The number of UK businesses on the brink of bankruptcy skyrocketed by more than a quarter at the end of last year amid a “debt storm” triggered by a series of interest rate hikes, a report from a group of insolvency specialists revealed on Monday.  

The latest ‘Red Flag Alert’ released by Begbies Traynor Group found that 47,477 firms in Britain were in “critical” financial distress in the final quarter of last year, as more companies struggled with inflation and borrowing costs. The figure was a 26% increase compared to the 37,772 firms that reported a “critical” level of distress in the previous three months.   

The surge marked the second consecutive quarter-on-quarter period in which critical financial distress has risen by 25%, the report noted. A significant percentage of businesses facing these conditions are expected to enter insolvency over the course of the next year.  

According to Julie Palmer, a partner at Begbies Traynor, soaring interest rates, “rampant” inflation and weak consumer confidence amid rising and “unpredictable” input costs have created a “perfect storm” for British businesses.  

The Bank of England has steadily raised interest rates from 0.1% at the end of 2021 to the current 5.25% in an effort to tame inflation.

Macroeconomic turmoil is impacting “every corner” of the UK economy, Palmer said, noting that the most serious concerns are in the construction and real estate sectors. They represent nearly 30% of all businesses in critical financial distress, according to Begbies. Researchers pointed out that all of the 22 sectors assessed saw an increase in “critical” financial distress last year.  

The report also showed that almost 540,000 British companies were in “significant” distress in the final quarter of last year, up 12.9% from the third quarter. Begbies Traynor warned that insolvency rates in the UK are likely to speed up in 2024.

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Exports of Russian coal to countries in Southeast Asia surged last year after supplies to the EU stopped amid Western sanctions on Moscow, Vedomosti business daily reported on Monday, citing data from energy analytics firm Kpler.

South East Asia-bound deliveries of Russian coal, excluding China, jumped by 47% in 2023 and reached 13.1 million tons, the outlet said.

Countries that ramped up Russian coal imports included Sri Lanka, which boosted purchases by 4.5 times to 1.6 million tons. Vietnam nearly doubled imports to 3.9 million tons, Malaysia, by 18% to 3.8 million tons, and Indonesia, by 1.7 times to 3.4 million tons. Deliveries to Myanmar increased by 10%, reaching 41,000 tons last year, while Bangladesh bought 48,000 tons of coal from Russia, data shows.

Meanwhile, Beijing, currently Moscow’s largest Asian trade partner, has imported 40% of all Russian coal exports since 2022, followed by India (20%) and South Korea (13%), data shows.

According to Chinese customs data, coal imports in December hit a record high of 47.3 million tons following the third-highest volume seen in November, sending total imports in 2023 to an all-time high.

The boost in Russian coal exports to Asian markets comes as Moscow has diverted its trade flow following the EU’s import ban on the country’s coal imposed in December 2022.

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A Russian court has ordered Apple to pay an 800,000 ruble ($8,915) fine for refusing to remove Adolf Hitler’s ‘Mein Kampf’ from its Apple Books application, Russia’s TASS news agency reported on Tuesday.

The verdict was handed down after a closed-door hearing at the Tagansky District Court of Moscow. Apple requested that the case be heard in private in order to safeguard trade secrets, TASS noted.

Written in 1924 while the future Nazi dictator was imprisoned in Bavaria, ‘Mein Kampf’ chronicles Hitler’s experience of the First World War and his disillusionment with the postwar Weimar Republic. In the book, Hitler outlines his belief in the supremacy of the Germanic race and attributes Europe’s ills to the Jewish people. 

The distribution of ‘Mein Kampf’ was outlawed in Russia in 2010, after a court deemed it extremist. However, it was still available to Russian readers via Apple Books. 

According to the FAS, Apple broke these laws in July 2022 by banning app developers from informing customers about purchase options outside its App Store. 

Apple also found itself before the Tagansky District Court last August, when it was fined 400,000 rubles ($4,200) for failing to remove podcasts that contained false information on Russia’s military operation in Ukraine, as well as information that was “aimed at involving minors in illegal activities in order to destabilize the political situation in the Russian Federation.”

The EU is moving forward with plans to impose a windfall tax on the income generated by frozen Russian assets, Bloomberg reported on Tuesday, citing sources.

Bloc members' foreign ministers approved the tax on Monday and their ambassadors will discuss the step later this week, the outlet claimed, citing people familiar with the matter.

The report comes after EU foreign policy chief Josep Borrell said on Monday that member states had reached an agreement on the windfall tax, and that the bloc's ambassadors were expected to greenlight the decision to first accumulate the funds on a separate account and then use them in Ukraine.

The report comes ahead of an EU summit scheduled for next week where the bloc’s leaders plan to discuss new financial aid to Kiev. A four-year package worth €50 billion and financed from the EU budget was vetoed by Hungary last month. The country’s prime minister, Viktor Orban, spoke against committing money for years in advance and warned that supporting Kiev must not “harm” the bloc’s finances.

A number of countries have spoken out against seizing the assets outright over legal concerns. The idea of taxing the profits instead was first circulated last year. However, according to Bloomberg, it has progressed slowly as several EU member states and the European Central Bank are concerned about the potential impact the move could have on the stability of the euro.

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The District Court of Hamburg in Germany has banned Forbes magazine from disseminating statements to the effect that Russian billionaire Alisher Usmanov “fronted for” President Vladimir Putin and “solved his business problems,” RBK reported on Tuesday.

According to the ruling seen by the business daily, Forbes failed to substantiate the information presented in its article titled ‘Meet Putin’s Oligarchs Most Likely To Get Slapped With Sanctions By Biden Over Ukraine’, published on February 2, 2022.

The court ruled that the claims made by Forbes were untrue and defamatory, given that the magazine refused to disclose the anonymous “expert” source to whom the disputed statement was attributed.

According to Usmanov’s attorneys, the unsupported claims made in the text of the article ended up being cited verbatim by the EU as justification for introducing sanctions against the billionaire in February 2022. 

The ruling marks the second milestone victory for Usmanov after a Hamburg regional court sided with him in a dispute with the Austrian newspaper Kurier in August 2023 over a claim the outlet made that Usmanov was “one of Putin’s favorite oligarchs.” The statement was also found to be defamatory.

Usmanov holds a major stake in USM, a Russian investment group with holdings in Metalloinvest, one of the world’s largest iron ore producers, and telecom company MegaFon. Usmanov’s net worth reportedly totals $14.4 billion. The 70-year-old was placed under UK, EU, and US sanctions shortly after the beginning of the Ukraine conflict.

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The financial landscape of 2024 presents a mixed bag – a potentially bullish year for emerging markets with the US Federal Reserve contemplating three interest rate cuts, yet the potential for this being overshadowed by high volatility. In this milieu of uncertainties, one unexpected frontrunner takes center stage: Turkish bonds.

Despite the recent record underperformance of the Turkish currency against the dollar, the nation seems poised for a soft landing, hinting at a potential market recovery in the latter part of the year. 

While Türkiye’s inflationary struggles persist, the real action is unfolding in the country’s bond market, which offers a unique discount bonanza for discerning investors. There’s growing buzz about a bounce-back in this market in 2024.

Recent adjustments in Türkiye’s central bank monetary policy have spawned newfound interest in Turkish government bonds. Policy rates and local deposit rates have been adjusted to provide positive real rates compared to inflation expectations. The central bank has impressively raised the policy rate from 8.5% to 40%, reflecting a commitment to a sustained positive real-rate environment.

The Turkish lira continues to collapse: 10 years ago, One dollar would net you just over 2;
now, One dollar is worth over 28...

🇹🇷 Turkish Lira per US Dollar

1st January, 2020: 5.9
1st January, 2021: 7.4
1st January, 2022: 13.1
Now: 29.2 pic.twitter.com/cFkmlMOOcq

— Russian Market (@runews) January 10, 2024

Despite Türkiye’s significant fiscal financing needs, the healthy cash balance in the country’s treasury and improved fiscal performance mitigate risks of oversupply. Projections indicate a potential influx of nearly $75 billion in investment if Türkiye gradually returns to historical ownership averages. This optimistic outlook aligns with Finance Minister Mehmet Simsek’s positive expectations, suggesting that Türkiye’s domestic sovereign bonds are likely to an attractive investment in 2024.

In the realm of emerging market bonds denominated in the local currency, Turkish lira-denominated bonds, often underestimated, are poised for a turnaround and could emerge as a top investment in the coming year.

⚠️BREAKING:

*TURKEY'S CENTRAL BANK DELIVERS ITS SEVENTH STRAIGHT RATE HIKE, RAISING RATES TO 42.5% FROM 40%

🇹🇷🇹🇷 pic.twitter.com/GOqUv1ko4P

— Investing.com (@Investingcom) December 21, 2023

It should be noted that inflationary pressures, high issuance volumes, and an anticipated additional 500 basis points in monetary tightening could entail Turkish bonds experiencing further volatility.

However, the Turkish central bank’s recent actions underscore its commitment to addressing economic challenges, eliciting a positive response from international investors cautiously re-entering the country’s domestic bond market. Sweeping economic reforms and a surge in yields have attracted approximately $860 million in lira-denominated government bonds. This renewed interest follows an economic policy overhaul initiated after President Recep Tayyip Erdogan’s re-election in May. Led by former Goldman Sachs banker Hafize Gaye Erkan, the central bank has raised interest rates six times since June, reaching a policy rate of 40%. This is aimed at curbing inflation that has exceeded 60%. This shift has led to a downturn in Türkiye’s local-currency bonds, but with yields now aligning with expected price growth levels, opportunities may arise for investors.

As 2024 begins, Türkiye’s debt capital markets are showing a remarkable recovery, in contrast to the cautious stance of international investors six months ago. The surge in interest is prompting Turkish borrowers in sovereign and corporate markets to expedite issuances. Exemplifying this newfound enthusiasm was a successful $2.5 billion five-year sukuk issued on November 7 for which demand reached over $7 billion, three times the issue amount. As high-quality asset managers and buy-and-hold investors re-engage, the question arises: how long can this positive momentum in Turkish markets be sustained into 2024?

Recognizing the inevitable nominal depreciation due to high inflation, experts anticipate a less pronounced depreciation in the coming years and view Türkiye’s recent 500 basis-point interest rate hike as a positive move, expressing confidence in the country’s commitment to tackling inflation.

The country’s central bank actively encourages foreign investors to explore lira-denominated bonds, emphasizing the attractive high yields they offer. As the country approaches the final stages of its monetary tightening phase, the bank predicts a more moderate economic environment by the same time in 2024, with lower yields expected thereafter.

Despite the over 30 percentage points worth of rate hikes since June, putting the policy rate at 40%, Erkan sees this as an opportune moment for foreign investors. Acknowledging the increased interest from US investors in Turkish government bonds, she expressed a preference for direct investments over swap contracts, citing the limited impact on the country’s reserves. The governor’s comments align with signals from the Monetary Policy Committee suggesting a slowdown and the imminent conclusion of the ongoing monetary tightening cycle. While Erkan observed a decline in price increases across sectors such as the automotive and electronics segments, she highlighted persistent high inflation in education and housing, emphasizing the impact of supply shortages on the housing market.

In conclusion, as we anticipate economic shifts in 2024, the Turkish bond market emerges as a potential sleeper hit. Despite challenges, signs of resilience and strategic policy adjustments could position Türkiye for a market resurgence, making its corporate bonds a noteworthy investment opportunity in the months ahead. The year 2024 will be the year of Turkish bonds.

DISCLAIMER: NOT INVESTMENT ADVICE

The average cost of a container has more than doubled globally in the past month, according to an article in the Wall Street Journal published on Sunday. 

The disruptions caused by the continued Houthi attacks on cargo vessels in the Red Sea are sending shockwaves across global supply chains, delaying shipments and raising transportation costs, the article states.

The data cited by the outlet, which is from London-based Drewry Shipping Consultants, shows that the average worldwide cost of shipping a 40-foot container jumped 23% to $3,777 just in the week ending January 18. That puts the current rate at more than double what was being charged a month ago.

“The increases are being felt far beyond the disrupted trade routes that link China with Europe and the US East Coast,” the WSJ wrote, noting that spot rates to ship a container from China to Los Angeles had soared by 38% in the week through January 18, to $3,860.

“Volatility is back, big time in international container shipping,” Philip Damas, managing director of Drewry, said, as quoted by the WSJ.

Damas explained that many big companies that have longer-term contracts with ocean carriers are paying surcharges of 20% or more on top of contract rates to compensate for higher costs, such as on fuel and insurance.

The increased risk of attack in the Red Sea has forced major shipping firms to avoid the Suez Canal, which is the fastest route for moving cargo between Asia and Europe. Maritime traffic through the vital route, which normally accounts for 15% of global commercial shipping, is down 37% so far in 2024 from a year ago, according to figures from the IMF.

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The confiscation of Russia’s assets, currently frozen in the West, could lead to massive financial losses on part of the US and its allies, the news agency RIA Novosti reported over the weekend. A number of nations, including the US, UK, France, and Germany, still have significant investments in Russia that could be lost.

Total foreign direct investments (FDI) in the Russian economy by the EU, G7, Australia, and Switzerland amounted to $288 billion at the end of 2022, the news agency said, citing statistics gathered from the countries themselves. This roughly equals the size of the Russian funds that are frozen and that Western nations are now considering confiscating.

Some $300 billion in Russian reserves remain frozen in the West, more than $200 billion of which are held by the EU, while the rest are in the US. The bulk of the assets the US and its allies might lose if they go on with the confiscation plan are also held by EU nations, the data cited by RIA shows.

In total, the bloc’s members had $223.3 billion of assets in Russia as of late 2022, the news agency said. More than $98 billion was formally held by Cyprus, with the Netherlands coming in second with $50.1 billion in assets.

Germany had $17.3 billion invested in the Russian economy, while France and Italy had $16.6 billion and $12.9 billion, respectively, the news agency said. As of the end of 2021, the UK’s investments in Russia amounted to $18.9 billion.

Switzerland appeared to be another major investor in the Russian economy with $28.5 billion, while the US itself had $9.6 billion worth of Russian assets, according to the news agency. RIA did not disclose how it derived its estimates.

The bank also put Ireland’s investments at $34 billion, and said that the UK had more than $53 billion invested in Russia as of that date. It estimated US investments at $6 billion.

Moscow has warned the West about potential retaliation over any confiscation of its frozen reserves. “Of course, we analyzed possible retaliatory steps in advance,” Kremlin spokesman Dmitry Peskov said in late December. He added, however, that the confiscation of foreign assets in Russia could only be considered in theoretical terms at that time.

Russia has repeatedly warned that a seizure of its assets by the US and its allies would amount to “theft” and that it would violate international law and undermine reserve currencies, the global financial system, and the world economy.

The US and other Western nations slapped Russia with unprecedented sanctions over the conflict with Ukraine but had largely balked at the idea of seizing Moscow’s substantial reserve holdings that were frozen in Belgium and other EU countries soon after the start of the conflict.

In December, the Financial Times reported that Washington had proposed that working groups from the G7 explore ways to confiscate the $300 billion in frozen Russian assets on February 24, 2024, the second anniversary of the start of hostilities between Russia and Ukraine. Earlier this month, meanwhile, Bloomberg also reported that the idea had received the support of the administration of US President Joe Biden.

Apple has paid the Russian government a 1.2 billion ruble ($13.5 million) antitrust fine following a ruling by the Federal Anti-Monopoly Service (FAS) in November, the watchdog said on Monday.

The company has not publicly commented on the payment.   

According to the FAS, Apple violated Russia’s anti-monopoly legislation in July 2022 by banning app developers from informing customers about purchase options outside its App Store. Apple's policies entail use of the company’s own payment system.

The tech giant had previously paid a fine of 906 million rubles ($10.1 million) in Russia as part of a 2020 lawsuit filed by the Russian cybersecurity company Kaspersky Lab. The company was found guilty of restricting competition in its App Store after it “unfairly” rejected Kaspersky Lab’s parental control program.

In 2022, the FAS made similar rulings in relation to Google, which was also accused of violating antitrust laws with the billing system for its Google Play service. However, the tech giant ultimately adhered to the regulator’s demands and tweaked its policies to be in line with Russian legislation.

In late 2022, the multinational gave up its office in downtown Moscow, though two of its legal entities are still working in the country. The corporation has removed the apps of several Russian media outlets along with sanctioned Russian banks from App Store. 

Also, in 2022, Russia’s Trade Ministry gave permission for Apple products to be brought into the country through parallel import schemes. As a result, consumers in Russia can easily access the latest smartphones, tablets, and laptops imported via third countries such as Türkiye, the UAE, and former Soviet states.

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Ukraine is experiencing a “surprising boom” in electric vehicles that has seen purchases surge almost tenfold compared to pre-conflict levels, Le Figaro reported on Monday. Tesla vehicles are particularly popular among Ukrainians, the data shows.   

At the end of 2021, only 8,541 electric cars were registered in the country, whereas by January 2023 this figure had skyrocketed to 46,830, the outlet said, citing industry data. Despite the ongoing military operations, this “frantic” growth continued last year, as by November the number of EVs had nearly doubled, reaching 83,116, the outlet noted.   

“For the first time, we have experienced a significant increase in demand for loans for electric cars, amid a shortage in fuel supplies and rising fuel prices,” Anton Tiutiun, the deputy CEO at Ukraine’s state-run Oschadbank, said.   

The risk of power outages amid strikes on Ukraine’s energy infrastructure has not stopped Ukrainians from buying EVs. The country has a fairly well developed public charging network numbering up to 11,000 stations, according to Nissan Motor Ukraine, a figure higher than in the US state of New York and double that of Poland.  

“We thought that the export of electric vehicles to Ukraine would stop with the war, and that’s what happened. But, after six months, business was stronger than ever,” said Hans Eric Melin, director of Circular Energy Storage, a UK firm that tracks flows of used batteries worldwide.  

Whereas in 2021, Ukrainians bought just 454 Teslas, in 2023 this number surged to over 4,600 units, according to statistics from the country’s automobile association, Ukravtoprom. Two years ago, Ukraine was among the top three destinations for used American EVs sold abroad, behind Nigeria and the United Arab Emirates.  

However, most of the imported Tesla cars are damaged and were bought through auctions in the US and Canada, according to Le Figaro, which cited automobile expert Ivan Malakhovsky from the online media outlet Wired. According to Malakhovsky, some Ukrainians have turned repairing Teslas into a profitable business, fixing up to 100 vehicles a month.

Ukraine has long been plagued by rampant corruption, ranking 116th out of 180 in Transparency International’s Corruption Perceptions Index in 2022.

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Mari Vanna, a Russian restaurant that has been operating in Washington DC since 2013, has announced that it is shutting down. The restaurant is the last in the city that identifies as a Russian eatery. Others have either closed or rebranded in recent years.

According to a message posted on its Instagram account earlier this month, the restaurant’s “last pre-retirement day” would be Monday, January 29.

“And now we have come to the moment when it is time to close our doors with a creak in our hearts,” the restaurant said, providing no specific reason for the move. “Our Family extends deep gratitude to all of you, our precious Friends, for these warm years spent together.”

The farmhouse-chic restaurant, which is decorated with lace curtains, old books, framed photos and vintage plates, serves Russian classics such as cured herring, blinis, vareniki, borsch soup, and savory baked pies commonly called pirozhki. 

“The decision was definitely a tough one for our owners, but they are looking forward to a new direction,” the restaurant management told the local media outlet Eater Washington DC, adding that the company’s NYC sibling in the Flatiron District will remain open.

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A majority of European Central Bank (ECB) staff participating in an internal survey have given a negative assessment of President Christine Lagarde, the organization's head, Politico reported on Monday, citing the poll results.

Lagarde’s overall performance in the first half of her eight-year term was deemed “poor” or “very poor” by 50.6% of respondents. Meanwhile, only 20.3% of those polled assessed her performance as “good” or “very good.”

The ECB president wades too deeply into politics and uses the institution to boost her personal agenda, almost a third of those surveyed believe, that adding that her desire for public attention hasn’t helped the central bank’s reputation.

The mid-mandate survey, which was conducted over December 12-22 of last year, included responses from 1,089 of the ECB’s roughly 4,500 staff.

A similar poll carried out on Lagarde’s predecessor, Mario Draghi, at the end of his term showed an approval rating of 64%.

Furthermore, several respondents suggested that the former French finance minister wanted to use the bank as a springboard back into politics.

However, an ECB spokeswoman called the survey flawed.

“The President and the Board are fully focused on their mandate and have implemented policies to respond to unprecedented events in recent years such as the pandemic and wars,” she told Politico.

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Boeing shares dipped slightly in early trading on Monday following an advisory issued by the US Federal Aviation Administration (FAA) that airlines inspect an older version of the Boeing 737 due to concerns over mid-exit door plugs. This follows a recent incident involving an Alaska Airlines flight where a door detached mid-air.

The FAA’s statement, called a ‘Safety Alert for Operators’, advocates visual inspections of the door plugs on Boeing 737-900ER aircraft for an “added layer of safety.” The 737-900ER, an older aircraft that does not belong to the MAX family, boasts 505 units in service both in the US and abroad, according to Boeing’s data, although it is primarily used by domestic carriers United Airlines, Alaska Airlines, and Delta Air Lines. 

The FAA’s recommendation that the door plugs on Boeing 737-900ER jets be looked at was prompted by reports of unspecified bolt issues that had arisen during additional inspections conducted by some airlines in the wake of the MAX 9 incident.

Airlines are urged to promptly execute key portions of a fuselage plug assembly maintenance procedure related to the four bolts that secure the door plug to the airframe.

The US Federal Aviation Administration recommended airlines operating Boeing 737-900ER jets inspect door plugs to ensure they are properly secured after some operators reported unspecified issues with bolts upon inspections https://t.co/3TTd4ovZ7S pic.twitter.com/cVNP10g8CG

— Reuters (@Reuters) January 22, 2024

Boeing’s shares saw a 0.5% decline in early trading on Monday, contributing to a 17.5% drop since the start of the year. Although not part of the newer MAX fleet, the 737-900ER shares the same door plug design that enables the addition of an extra emergency exit door for increased seating.

A spokesman for Boeing expressed full support for the FAA’s action. The 737-900ER, introduced in 2007, has accumulated over 11 million hours of operation and 3.9 million flight cycles without issues related to the door plug, according to the FAA.

Meanwhile, the FAA has stated that MAX 9 aircraft will remain grounded until deemed safe for service. United extended the cancellation of MAX 9 flights through January 26, while Alaska Airlines, for which MAX 9’s constitute 20% of its fleet, is yet to confirm the duration of cancellations.

Four passengers are suing Alaska Airlines and Boeing for the "terror" they say they experienced after a door plug "blew off" during their flight earlier this month, according to a complaint filed Tuesday. https://t.co/yLbAkJK5lM pic.twitter.com/wOhthcan7D

— ABC News (@ABC) January 17, 2024

United, which operates 136 of the 737-900ER aircraft that are subject to the latest advisory, does not expect the inspections to result in disruptions to service. Alaska Airlines, which has already been carrying out such inspections for several days, has reported no findings.

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Huawei has unveiled its new in-house-developed operating system, HarmonyOS NEXT, which the Chinese tech giant expects to help it break with the Android ecosystem.   

The company last week announced plans to roll out a developer version of the platform in the second quarter of the current year followed by the full commercial version in the fourth quarter. The step comes as part of Huawei’s ambitious plan to bolster its own software ecosystem.

The Shenzhen-based corporation first unveiled its proprietary Harmony system back in 2019, and launched it on some smartphones a year later. However, shortly thereafter the US imposed restrictions aimed at cutting the Harmony system’s access to Google’s technical support.

As a result, unlike previous consumer versions of the HarmonyOS, the new version is not compatible with Android. The company has opened its first developer beta test to acquire testers and experience key features.

Last year, Huawei launched its Mate60 series of smartphones that, according to the company, will be powered by a domestically developed chip set. The release represented a remarkable comeback into the high-end smartphone market for Huawei, which has been struggling under US sanctions for years.

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