Aurelia Butler

JERUSALEM (Reuters) – Israeli Finance Minister Bezalel Smotrich said on Tuesday he expects parliament to hold its initial vote on a 2025 state budget delayed by wars in Gaza and Lebanon this Sunday.Smotrich, speaking to parliament’s finance committee, said he hoped to deliver the budget draft to lawmakers on Wednesday with the first of three votes on Dec. 8.A month ago, cabinet ministers approved a spending package that includes a raft of tax increases and spending cuts to pay for the war in Gaza against Palestinian Islamist group Hamas that has entered its second year with no immediate end in sight.Smotrich has come under pressure from the central bank and credit rating firms to quickly pass an austerity package for next year to rein in a wide budget deficit that has reached around 8% of gross domestic product.The budget includes a roughly 40-billion-shekel ($11 billion) package of tax hikes and spending cuts.Israel has had to boost military spending by tens of billions of shekels to meet the cost of wars that have resulted in thousands of troops deployed in Gaza and Lebanon while much of the economy has slowed drastically due to a lack of workers.One bright sign is a ceasefire accord in Lebanon, although it is deeply fragile and there are fears of a resumption of fighting between Israel and Hezbollah.Smotrich had initially hoped for final passage of the 2025 budget by the end of 2024 but he acknowledged that will not happen. As a result, the 2024 base budget will be divided into 12 parts with each allocated monthly next year until the 2025 budget is approved.”I don’t think it’s terrible that the economy will run on a budget of 1/12 in January,” Smotrich told the committee. In response to criticism of a delay in submitting the budget, Smotrich defended his decision and said lawmakers would have ample time for intensive discussions.”The reason I delayed (the budget) is the war. If I had brought the budget too early, we would not have known where the war in the north (Lebanon) was going. Today, we know much more about where we are going. Now the budget will be much more realistic.” All three of the main credit-rating agencies have cut their ratings on Israel this year due to worries that war could continue well into next year. Failure to approve the budget by the end of March would trigger new elections.($1 = 3.6322 shekels) More

This would form part of an overall 4.6 billion euros set aside from the EU’s Innovation Fund to boost net zero technologies and renewable hydrogen in the bloc, the Commission said.European electric vehicle makers face fierce competition from Asia in particular and demand has lagged expectations, which in turn has hit jobs in the region.”As promised, we’re already delivering for European citizens and businesses. We are investing 4.6 billion euros to back cutting-edge European projects in net-zero technologies, electric vehicles batteries and renewable hydrogen,” EU Commissioner Wopke Hoekstra said in a statement.European carmakers have been struggling with weak demand and a slower-than-expected shift over to electric vehicles, while also trying to fend off competition from China. The European Union has proposed raising tariffs on Chinese-built EVs to counter what it says are unfair Chinese subsidies.On Tuesday, Swiss automotive supplier Feintool said it would close one of its sites in Germany and cut its workforce by as many as 200 people due to weakness in demand for electric vehicles and uncertainty over the shift to renewable energy.($1 = 0.9506 euros) More

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BEIJING (Reuters) -China has banned exports to the U.S. of some goods containing critical minerals while tightening exports on others, after U.S. curbs a day earlier on the Chinese chip industry.Following is background on export controls and other steps that analysts say Chinese authorities might take to safeguard China and its companies’ interests.DUAL-USE On Dec. 3 China banned exports to the U.S. of items related to gallium, germanium, antimony and superhard materials, the latest escalation of trade tensions between the countries ahead of President-elect Donald Trump taking office.China had already on Dec. 1 enforced new regulations on exports of so-called dual-use products that have both civilian and military applications. That had seen it create a unified and simplified export control list while also requiring Chinese exporters of dual-use items to disclose details about end users. The move allows Beijing to better identify supply chain dependencies on China within the U.S. military-industrial complex. Critical minerals are among these items, as China dominates global mining and processing of rare earth materials. It already this year imposed export limits on antimony, a strategic metal used in military applications such as ammunition and infrared missiles, and in October 2023 put curbs on graphite products that go into electric vehicle batteries.In July 2023, China announced restrictions on the export of eight gallium and six germanium products, metals widely used in chipmaking, citing national security interests.In December 2023, China banned the export of technology to make rare earth magnets, which came on top of a ban already in place on exporting technology to extract and separate the critical materials.SECURITY REVIEWS Beijing’s announcement in May last year that it would block some government purchases from Micron (NASDAQ:MU) after the U.S. memory chip maker failed a security review is widely regarded as one of China’s first retaliatory moves in the U.S.-China chip war.Concern has grown that U.S. tech giant Intel (NASDAQ:INTC) could be a future target, after the Cybersecurity Association of China alleged the American firm had “constantly harmed” the country’s national security and interests and that its products sold in China should be subject to a security review.Intel is one of the largest providers of chips used in electronic devices including personal computers, and traditional servers in data centres in China. It received over a quarter of its total revenues from China last year.Retaliatory action could also happen via other channels. U.S. business chambers in China have in past years complained of U.S. firms facing increased issues such as slower customs clearance and more government inspections during times of escalated tensions such as the U.S.-China trade war. UNRELIABLE ENTITIES LIST AND ANTI-FOREIGN SANCTIONS LAWChina in September announced that it would probe U.S. firm PVH Corp (NYSE:PVH), which owns fashion brands Tommy Hilfiger and Calvin Klein, for “unjustly boycotting” Xinjiang cotton and other products under the unreliable entity list (UEL) framework. That was the first time Beijing had taken action against a company for removing Xinjiang cotton from its supply chain to comply with U.S. rules, and one of the few times it had used the UEL since the list’s creation.Beijing created the list during the first Trump presidency and threatened to ban U.S. companies from importing, exporting and investing in China. To date the list has included U.S. companies involved in the sale of arms to Taiwan such as Lockheed Martin (NYSE:LMT) and RTX’s Raytheon (NYSE:RTN) Missiles & Defense.China also has an anti-foreign sanctions law in effect since June 2021, which it uses to target foreign companies that it deems to have harmed the country’s national security or caused Chinese firms to be sanctioned.When U.S. drone manufacturer Skydio was sanctioned under the law in October, that quickly cut off the company’s supply of batteries, according to the Financial Times.”As containment (of China) intensifies, more U.S. industries, businesses and the entire economy will pay an increasingly heavy price,” state-owned outlet Global Times wrote in an opinion article about Skydio in November. More

LONDON (Reuters) – Monetary easing by central banks across developed and emerging economies trundled along in November with markets warily gearing up for a new year that could bring tectonic shifts to the global policy making backdrop.Four of the six central banks overseeing the 10 most heavily traded currencies that held meetings in November lowered their lending benchmarks. Central banks in New Zealand and Sweden each shaved 50 basis points off their interest rates while the U.S. Federal Reserve and the Bank of England delivered 25 bps cuts.Policy makers in Australia and Norway decided to leave interest rates unchanged, while their peers in Switzerland, Japan, Canada and at the European Central Bank held no rate setting meetings. The outcome of the U.S. election, which will see a return of Donald Trump to the White House on January 20, is expected to fuel fresh trade tensions that could boost U.S. inflation and curtail growth. The latest moves come ahead of some potentially sizeable shocks for the global economy, with politics set to become increasingly unpredictable, said James Rossiter, head of global macro strategy at TD Securities.”The name of the game in 2025 is now uncertainty, especially in the U.S. and Europe,” said Rossiter. “Central banks are going to have to adapt their strategies quickly.”The latest moves across G10 central banks brings the year-to-date tally of rate cuts to 650 bps, nearly matching the 2020 total of 655 bps, after major central banks delivered no cuts between 2021 and 2023. Across emerging markets, 12 of the Reuters sample of 18 central banks in developing economies held rate-setting meetings in November. South Korea, Mexico, South Africa and the Czech Republic delivered 25 bps cuts each while China, Indonesia, Turkey, Malaysia, Israel, Hungary and Poland kept rates unchanged. Brazil extended its rate hiking cycle, lifting its key interest rates by 50 bps.S&P Global Ratings emerging market chief economist Elijah Oliveros-Rosen said that a changing outlook of fewer rate cuts from the Fed in the wake of the U.S. election would shape policy making in developing economies. “We also expect greater caution among most major EM central banks, and we’ve therefore toned down our expectations for their interest rate cuts in 2025,” Oliveros-Rosen said in a note to clients. “On balance, we expect a stronger U.S. dollar against most EM currencies in 2025 than in 2024.”The latest moves in emerging markets took the tally of cuts since the start of the year to 1,810 bps across 46 moves – outstripping the total of 1,765 bps of easing in 2022, after 945 bps in 2023. Total (EPA:TTEF) hikes for emerging markets so far in 2024 stood at 1,350 bps.   More

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