Aurelia Butler

The German economy ministry plans to subsidise 80 per cent of the electricity cost for energy-intensive companies, in a proposal likely to fuel divisions inside the governing coalition and further alienate European nations who cannot afford such measures.Under a long-awaited and highly contentious proposal published by Green economy minister Robert Habeck, a large part of German industry would be offered electricity at a subsidised price of €0.06 per kilowatt hour (kWh) until 2030. The plan, which would cost an estimated €25-30bn, is aimed at bolstering German manufacturers in sectors such as chemicals, steel, metal and glass, as well as encouraging European investment in industries seen as crucial to reducing EU dependence on China, such as the production of solar panels and semiconductors. The economy ministry said that Germany needed to respond to “tough international competition” in these sectors that was “not taking place on a level playing field” due to huge subsidies in China and, more recently, in the US due to Joe Biden’s Inflation Reduction Act (IRA).Habeck’s proposal argues that energy intensive industries are facing an “existential threat” as they struggle with the surge in electricity prices triggered by Vladimir Putin’s invasion of Ukraine while also seeking to rapidly decarbonise — a process that often leads to higher electricity consumption. But the plan has already faced strong opposition from within chancellor Olaf Scholz’s deeply divided three-way coalition. Germany’s liberal finance minister, Christian Lindner, who this week warned that “extremely expensive subsidies” were the “wrong approach”, describing them as unfair and inefficient. Lindner, who has also locked horns with Habeck on a plan to ban new gas and oil heating from next year, explicitly rejected the vice-chancellor’s proposal to use funds from the €200bn “protective shield” earmarked to shield German households and industry from the impact of Putin’s invasion of Ukraine on energy prices.A spokesman for Scholz said that the chancellor believed in “electricity prices that industry and consumers can afford without being permanently subsidised.” He added: “We now have to discuss exactly how to get there.”The proposed subsidy also risks exacerbating tensions within the EU, where many member states are concerned Germany’s economy, which is the largest in the EU, is in danger of exploiting a shift in thinking on European industrial policy and its huge financial heft to offer help to industry that other nations cannot afford to replicate. National decisions on subsidies are subject to approval by the European Commission, but the bloc’s state aid rule book has been weakened in recent years due to the Covid-19 pandemic and the energy crisis, further aggravating the grievances of lower-income countries. German manufacturers have long complained about high industrial electricity prices, especially after they jumped following the war in Ukraine. Among the companies that have since been reconsidering plans to build factories in Germany is Swedish battery maker Northvolt, which has been weighing whether to set up shop in the US instead. Volkswagen has similarly put a planned battery factory in eastern Europe on hold, instead prioritising a similar facility in Canada, which will allow it to tap into IRA subsidies and incentives.Oliver Blume, VW’s chief executive, has since called for politicians to intervene in the European electricity market, arguing that prices must stay below 7 cent per kilowatt hour for the region to remain competitive. The average price of electricity for business consumers in Germany was just over 0.25 per kWh including taxes in the second half of 2022, according to data from the European statistics agency Eurostat — almost exactly the average level for the EU overall.The economy ministry’s plan says that, in the long term, industry should be guaranteed cheap electricity produced from renewable sources through fixed-term contracts. The proposed subsidised price of €0.06 per kWh would only be available to certain industries, and would be capped at 80 per cent of a business’s consumption in a bid to incentivise energy saving. The plan was met with mixed reaction from German industry, winning the backing of the German Steel Federation and Germany’s largest union, IG Metall, but drawing scepticism from the German Chamber of Industry. Marcel Fratzscher, head of the German Institute for Economic Research, also voiced doubts. “The aim should not be to keep energy-intensive production in Germany, but to keep innovative processes and good jobs here,” he said. “It’s also not good from a social perspective. Industry gets the subsidies while consumers are left with high energy costs.”Fratzscher said that if companies such as the German chemicals giant BASF moved energy-intensive production to the US or China, as the company has suggested, it could actually be beneficial for Germany because it would boost the business’s global competitiveness. More

British retailers, pubs, hotels and restaurants are all hoping for a boost in sales prompted by the coronation of King Charles III on Saturday after three years of subdued consumer demand.The Centre for Retail Research estimates that total spending on coronation-related street parties, souvenirs and from foreign tourists will amount to more than £1.4bn this weekend, compared with a little over £400mn during the late Queen’s platinum jubilee in June last year.But consumers are also feeling the squeeze from the soaring cost of living. Just a third of Britons will spend on activities during the coronation bank holiday weekend, with one in 10 consumers planning to purchase food and drink for hosting friends or family and only 8 per cent planning to spend money on drinks out at bars and pubs, according to recent research from Barclays.“People don’t have a lot of discretionary spend, so they can’t afford to be spending on non-essentials,” said Tash Van Boxel, a retail analyst at GlobalData. More than half of respondents to a GlobalData survey said the cost of living would affect their celebrations. While the coronation weekend is expected to boost annual footfall by 4 per cent across all UK retail destinations, it is still forecast to be 8 per cent lower than last weekend, another UK bank holiday, when “consumers enjoyed the warmer weather and the longer daylight hours”, said Diane Wehrle, director at MRI Springboard, a provider of retail shopper traffic data. The weather this weekend is forecast to be more stereotypical for a British bank holiday: damp and dull. Union jack bunting outside a pub in Spitalfields, London © Jose Sarmento Matos/BloombergThe food and grocery sector is the most likely to benefit from the coronation, according to Van Boxel. Both Simon Roberts, chief executive of J Sainsbury, and Kathryn Turner, food product development director at Marks and Spencer, are planning for customers to buy more than normal. “Across Christmas and Easter, we saw that despite cost of living pressures, families were looking for a reason to celebrate and to make occasions special. We’re seeing that same sentiment with the coronation so far,” said Turner, who added that M&S had sold more than half a million tins of commemorative shortbread and coronation tea caddies in total so far.Sainsbury’s has sold 143.3 miles of bunting, which would be enough to stretch from Buckingham Palace to Sheffield. Fizz sales are up 128 per cent year on year, with prosecco and crémant being particular favourites. Sales of Nyetimber, an English sparkling wine, are up 600 per cent year on year as customers buy British for the coronation weekend, according to the supermarket chain. Meanwhile, Tesco opened its own pub in London in honour of the coronation, serving customers for two days only.Pubs that made it through the pandemic have suffered from supply-chain disruption and surging food inflation following the war in Ukraine. They now face high energy bills that threaten to eradicate all their profits.Emma McClarkin, chief executive of the British Beer and Pub Association, warned of impending pub closures “in the thousands”. That means the forecast boost of £71mn, or 17mn extra pints, for pubs this weekend cannot come soon enough.“I hope everybody uses this moment to support their local pub because we’re in a very difficult and precarious situation,” said McClarkin.Staff prepare Tesco’s pub in Farringdon for its two-day opening on Thursday and Friday this week © Tolga Akmen/EPA-EFEGoing to the pub still represents an affordable way to celebrate. “People still see the importance of the pub, for socialising and for community,” said Nick Mackenzie, chief executive of Greene King, a pub group that is marking the occasion with its Coronation Golden Ale. The company expects to sell a quarter of a million pints of the new beer, which is on sale until May 14.Mackenzie added: “By no means do I think it’s going to be a very quick return to normal. I think it’s going to be a little bit of time before things get easier for the customer.”Hotel chains are also capitalising on the celebrations. Premier Inn expects 17 per cent of Britons to head to London. Simon Ewins, the hotel chain’s managing director, reported some of its hotels near the coronation route “selling out in minutes”.A coronation-themed display at a supermarket in London © Daniel Leal/AFP via Getty ImagesThe Lanesborough, one of London’s most prestigious hotels, which is only a stone’s throw from the coronation procession route, is welcoming delegations, royal families and some heads of state for the event. The hotel is also hosting a photo exhibition of the royal family.“With Covid not too far behind us and Chinese tourists starting to branch out [to Europe] only a little while ago, the coronation is a great advertisement for London,” said Stuart Geddes, managing director of The Lanesborough.Average hotel room rates in London for Saturday are £277, up 10 per cent from the actualised price for the same date last year. That is still cheaper than recent royal events: the average actualised pricing for hotel rooms during the platinum jubilee weekend in June 2022 was £280, and £344 during September’s state funeral of Queen Elizabeth II, data from OTA Insight shows.One hotel data provider executive said: “The Queen was a global figure and her popularity will never be rivalled by anyone, probably not even by the King,”Additional reporting by Laura Onita and Oliver Barnes in London More

BIRMINGHAM, England (Reuters) -HSBC faced down opposition to its strategy and climate policy at a fractious annual investor meeting in Birmingham in England on Friday, including a shareholder proposal to spin-off its lucrative Asia business backed by major investor Ping An.Europe’s biggest bank is expected to defeat a proposal submitted by Hong Kong-based individual investor Ken Lui and backed by its biggest Asian shareholder Ping An, which calls for the lender to consider spinning off its Asia business.Shareholder Lui questioned HSBC’s board directly at the meeting on Friday, prompting the bank’s chairman Mark Tucker to say criticism of the bank’s performance showed “a fundamental misunderstanding of HSBC’s business.”Investors will vote on Lui’s proposals at the meeting, but Ping An and its supporters face an uphill battle to secure the 75% of votes cast needed to succeed.The proposed resolutions call on HSBC to boost dividend payouts, and to regularly review strategy including the possibility of carving out the Asia business that generates most of the bank’s profit.HSBC’s Tucker told the meeting that any break-up of the bank would undermine its global strategy and dent its revenue, repeating the bank’s argument that it would be risky and costly.”So it would not be in shareholders’ interests to split the bank,” Tucker said.Like Barclays (LON:BARC)’ investor meeting earlier this week, HSBC’s event was repeatedly interrupted by climate campaigners singing songs, while one protester stood up at the front of the hall with a banner reading ‘No more dirty coal’.Another protester underwent a symbolic “greenwashing” in a bathtub placed outside the conference venue.Major banks have long been targeted by green campaigners who say lenders have not done enough to curb financing of polluting companies and industries.Barclays’ annual meeting on Wednesday was disrupted by campaigners singing a song inspired by the Spice Girls’ ‘Stop’, calling on the bank to end funding for oil and gas.PUBLIC SPATSo far no other big institutional investors have signalled they are in favour of the Asia spinoff.On the contrary, Norway’s state investment fund, HSBC’s fourth-biggest investor, has said it will back the bank’s board and proxy advisory firms including Glass Lewis and ISS have urged support for the bank.Lui told CNBC News in an interview broadcast ahead of the meeting that he had emailed all of HSBC’s top 50 investors and eight had replied, who he had met either over video calls or in person to discuss his resolutions. Lui said he was only able to disclose he had met with Ping An and that they were supportive. HSBC tripled its profit in the first quarter as rising interest rates boosted its income, paying its first quarterly dividend since 2019.HSBC’s Tucker also told investors that the bank still planned to sell its French retail business and that negotiations for a sale were ongoing, after warning last month the deal could be in jeopardy. More

Investors turned to the company’s proprietary products, such as options linked to the VIX volatility index and the S&P 500, as they rejigged portfolios to hedge against risks of an economic uncertainty.Revenue from its options segment grew 28% to $280.7 million.The Chicago-based company, which provides trading platforms for equities, foreign exchange and derivative products across markets in different regions, saw a 13% rise in net revenue to $471.4 million.The company reported a net income of $172.6 million, or $1.63 per share, for the quarter ended March 31, compared with $109.2 million, or $1.02, a year earlier.Cboe’s results wrapped up a strong quarter for exchange operators. Earlier this week, New York Stock Exchange-parent Intercontinental Exchange (NYSE:ICE) Inc reported upbeat results.Last month, both Nasdaq Inc and CME Group Inc (NASDAQ:CME) also beat profit estimates. More