Budget

October 26, 2016

EU faces €1.8 billion budget shortfall

The European Union is facing a funding shortfall of €1.8 billion in this year’s budget following the dramatic fall of the British pound since the Brexit referendum. An EU official told Chief-Exec.com…

Biden agrees to give Ukraine anti-personnel mines
A US defence official has told the BBC that President Joe Biden has agreed to give Ukraine anti-personnel land mines. The official, who was speaking on condition of anonymity, said such mines would be delivered soon and Washington expected that they would be used on Ukraine's territory. It follows Sunday's news that Washington had agreed to allow Ukraine to fire US-supplied longer-range missiles at Russian territory. Overnight, both Ukraine and Russia reported major drone attacks on their respective territories. Separately, the US embassy in Kyiv said it would be temporarily closed after it "received specific information of a potential significant air attack on 20 November". BBC news, November 20

Ukraine fires US-made missiles into Russia
Early yesterday morning, Ukraine’s military launched a volley of American-made ballistic missiles into Russia for the first time. The attack came on the 1,000th day of the war and less than a week after President Biden gave the Ukrainians permission to do so in a major shift of American policy. The strike targeted an ammunition depot in the Bryansk region of southwestern Russia, causing explosions, Ukrainian officials said. Russian officials claimed to have shot down five of the six missiles. The use of long-range American weapons was a show of force that demonstrated how continued western support could help Ukraine more easily degrade Russian forces. The attack came on the same day President Vladimir Putin lowered Russia’s threshold for the use of nuclear weapons. He declared that Russia could use nuclear weapons if its sovereignty is threatened, even against a nonnuclear state so long as that state is backed by a nuclear power. The timing of the long-planned move was clearly meant to send a message to Europe and the US. New York Times, November 20

Los Angeles passes 'sanctuary city' ordinance to protect migrants from deportation under Trump
The Los Angeles City Council on Tuesday unanimously passed a “sanctuary city” ordinance to protect immigrants living in the city, a policy that would prohibit the use of city resources and personnel to carry out federal immigration enforcement. The move by the Southern California city, the second most populated city in the US after New York City, follows President-elect Donald Trump’s vow to carry out mass deportations of immigrants. The ordinance codifies the protection of migrants in municipal law. Council member Paul Krekorian said the measure addresses “the need to ensure that our immigrant community here in Los Angeles understands that we understand their fear”. France 24, November 20

ECB warns low growth and high debt risk Eurozone crisis
The Eurozone risks another debt crisis if the bloc cannot boost growth, lower public debt and fix “policy uncertainty”, the European Central Bank has warned. In its annual Financial Stability Review, published on Wednesday, the ECB sounded the alarm over a potential return of “market concerns over sovereign debt sustainability”. It pointed to “elevated debt levels and high budget deficits” as well as tepid growth and uncertainties caused by recent “election outcomes at the European and national levels, notably in France”. Luis de Guindos, ECB vice-president, also pointed to “poor historical compliance with EU fiscal rules” by some EU governments. The borrowing costs of countries such as Italy and Spain, which were at the centre of the Eurozone crisis, remain far below the peaks they reached in the market turmoil more than a decade ago. But investor worries have recently risen over debt in countries such as France. Financial Times, November 20

MPs to summon Elon Musk to testify about X’s role in UK summer riots
MPs are to summon Elon Musk to testify about X’s role in spreading disinformation, in a parliamentary inquiry into the UK riots and the rise of false and harmful AI content, the Guardian has learned. Senior executives from Meta, which runs Facebook and Instagram, and TikTok are also expected to be called for questioning as part of a Commons science and technology select committee social media inquiry. The first hearings will take place in the new year, amid rising concern that UK online safety laws risk being outpaced by rapidly advancing technology and the politicisation of platforms such as X. The MPs will investigate the consequences of generative AI, which was used in widely shared images posted on Facebook and X inciting people to join Islamophobic protests after the killing of three schoolgirls in Southport in August. They will also investigate Silicon Valley business models that “encourage the spread of content that can mislead and harm”. The Guardian, November 20

UK water sector is riskiest in Europe for investors, survey finds
The British water industry is now the riskiest sector for investors of any utilities across Europe. A survey of 46 interested parties by analysts at Barclays found that “overall there has been a deterioration in investor sentiment … following the publication of the draft determination [Ofwat’s interim price settlement for companies for the next five years], Thames [Water’s] travails, government policy intervention and credit downgrades.” The Barclays note concluded: “UK water came in - very clearly - as the riskiest European regulated utility.” It added that this appeared to be an Ofwat regulation issue rather than British economy problem: “UK power actually topped the list as most preferred”. The Barclays analysts warn that the high-profile problems at Thames, the UK’s largest water company, is risking the spread of contagion across the sector. Abandoned by all nine of its shareholders who have declared the company in its present state as “uninvestible” and written off their investments, Thames Water is in negotiations with competing groups of creditors standing behind the group’s £18 billion of debt to arrange £3 billion in bridging loans to see it through to the end of the year. The Times, November 19

European troops in Ukraine would secure Trump peace deal, says Estonia
European leaders should be prepared to send military forces to Ukraine to underpin any peace deal engineered by Donald Trump between Kyiv and Moscow, Estonia’s foreign minister has said. Margus Tsahkna told the FT that the best security guarantee for Ukraine was Nato membership, as requested by Ukrainian President Volodymyr Zelenskyy. But if the US was opposed to inviting Kyiv to join the military alliance, Europe would have to step in with troop deployments once the fighting was over to deter further Russian aggression. “If we are talking about real security guarantees, it means that there will be a just peace. Then we are talking about Nato membership,” said Tsahkna. “But without the US it is impossible. And then we are talking about any form [of guarantee] in the meaning of boots on the ground.” Trump has vowed to bring a swift end to the war in Ukraine once he takes office, prompting fears he could impose an unfair deal on Kyiv by threatening to withdraw US military support or abandon Ukraine altogether. Several Trump allies have called for Europe to take on the burden of propping up Ukraine. Financial Ti m es, November 19

Ukraine’s shrinking window to strike inside Russia
For at least the next two months, Ukraine will be able to try long-range strikes inside Russia using missiles provided by the US. President Biden this week relented after months of pleas from Kyiv saying that it needed to fire deeper inside Russia to more effectively degrade Moscow’s forces. Ukrainian politicians have suggested that the first launches were imminent. But hanging over that newfound freedom is the impending ascent of Trump to the White House in January. It is unclear how much of the Biden administration’s approach to Ukraine will survive once Donald Trump takes office. The president-elect has said he wants to bring about a quick resolution to the war - without saying how. American officials said the weapon, known as the Army Tactical Missile System, was likely to be deployed, at least initially, against Russian and North Korean troops in the Kursk region of western Russia. New York Times, November 19

Almost 100 Gaza food aid lorries violently looted, UN agency says
A convoy of 109 UN aid lorries carrying food was violently looted in Gaza on Saturday, the UN agency for Palestinian refugees (Unrwa) says. Ninety-seven of the lorries were lost and their drivers were forced at gunpoint to unload their aid after passing through the Israeli-controlled Kerem Shalom crossing with southern Gaza, in what is believed to have been one of the worst incidents of its kind. Eyewitnesses said the convoy was attacked by masked men who threw grenades. Unrwa commissioner general Philippe Lazzarini did not identify the perpetrators, but he said the “total breakdown of civil order” in Gaza meant it had “become an impossible environment to operate in”. Without immediate intervention, severe food shortages are set to worsen for the two million people depending on humanitarian aid to survive, according to Unrwa. BBC news, November 18

Tesla shares surge on reports that Trump will change self-driving car rules
Tesla shares surged ahead of the New York market open following reports that Donald Trump’s incoming administration would seek to amend regulations governing self-driving cars. Tesla rose 8 per cent in pre-market trade on Monday. Analysts at JPMorgan attributed the move to a Bloomberg article that cited sources saying the Trump team hoped to push forward with a new framework to regulate self-driving vehicles. In October, Tesla chief executive Elon Musk - who was last week named alongside Vivek Ramaswamy to head up a project with a mandate to “dismantle government bureaucracy” - unveiled Tesla’s autonomous Cybercab prototype. At the time, investors appeared underwhelmed: Tesla shares fell almost 9 per cent as the Cybercab was unveiled. Financial Times, November 18