Aurelia Butler

Addressing Russia’s business elite in person for the first time since the day he sent his troops into Ukraine on Feb. 24 last year, Putin told them their role was not just to make money but to support society.Companies should not hide their assets offshore but should invest more at home, he said.He hailed the “high mission” of entrepreneurs who looked after their workers and directed their talents not just towards extracting profit but also for the public good.Billionaires Oleg Deripaska, Vladimir Potanin, Alexei Mordashov, German Khan, Viktor Vekselberg, Viktor Rashnikov, Andrei Melnichenko and Dmitry Mazepin – whose interests range from metals and banking to fertilisers – were among those in attendance.”I look forward to hearing your opinion on how to make the development of the domestic economy at a new stage more dynamic, more successful, so that it leads to a noticeable improvement in the quality of life of people across the country,” Putin told them.Though welcomed with a standing ovation, he was delivering a tough message to Russia’s richest people: that they need to think more about the needs of the country and less about their own bottom line. When he met with them at the start of the war, Putin told them he had been left with no choice but to launch his “special military operation” – in effect forcing them into a public display of consent.ECONOMY RESISTS SANCTIONSMany of the tycoons, known as oligarchs, were subsequently placed under sanctions by the West, but Putin said the attempt to destroy Russia’s economy had failed.He said those Western firms that had decided to stay in Russia rather than flee in a corporate exodus last year had made a smart decision.In the clearest sign of rising demands on big business, the government – faced with a widening budget deficit – plans to raise around 300 billion roubles ($3.9 billion) in a windfall tax, though this will not affect oil, gas and coal firms. Finance Minister Anton Siluanov said the tax would be set at around 5% of excess profits, TASS news agency reported. The levy will come into force legally from 2024, but the finance ministry expects companies to make payments this year as well, he said.Russia is hoping to bring about economic growth this year, after a 2.1% slide in 2022. Economy Minister Maxim Reshetnikov told the congress that GDP and investment would grow this year, but stopped short of giving estimates.The economy proved unexpectedly resilient in the face of sanctions last year, but a return to pre-conflict levels of prosperity may be far off as more government spending is directed towards the military.Putin has effectively placed large parts of the economy on a war footing, with defence factories working round the clock to churn out weapons, ammunition and equipment.The president last month urged business elites to invest in Russia rather than “begging” for money in the West, telling them that ordinary Russians had no sympathy for the yachts and palaces they had lost due to sanctions. More

There is perturbation among green campaigners. The Financial Times revealed this week that the UK is planning to eliminate its tariffs on Malaysian palm oil as the price of entering the Comprehensive and Progressive Trans-Pacific Partnership, the jewel in Britain’s otherwise unimpressive post-Brexit crown of trade agreements.Palm oil, which is used as a biofuel and the World Wildlife Fund estimates is also found in about half of all rich-world supermarket packaged products, has become a test for rewriting the world trading regime to protect the environment. The experiment is not producing encouraging results. Rich-world governments, particularly the EU, are struggling to create green trade-related regulations that are predictable, effective and comply with international law.Palm oil shot to fame, or notoriety, when it featured in a viral Greenpeace campaign starring Rang-tan, a cartoon orangutan whose forest habitat was destroyed by palm oil plantations. The oil and its derivative products now encounter multiple rich-world consumer and corporate boycotts and official restrictions. The EU has already in effect prevented imports of palm oil for biofuels under its renewable energy directive, and is bringing in a tough new deforestation law targeting the product along with cattle, soy, coffee, cocoa, timber and rubber.For Indonesia and Malaysia, the world’s two main palm oil producers and both former European imperial possessions, this is rich-world neocolonialism destroying the livelihoods of smallholders. The videoed annual statement of the Indonesian ministry of foreign affairs featured a brief scene of a jackboot marked “EU” trampling a palm oil plantation. Jakarta and Kuala Lumpur have already launched World Trade Organization cases against Brussels over the renewable energy directive, and the issue has jeopardised trade deals the EU is trying to sign in south-east Asia.Some of the producers’ arguments are reasonable. Blanket bans on palm oil imports make little sense. The WWF points out that palm plantations have impressively heavy yields. Replacing them with soya bean, coconut or sunflower would require between four and ten times as much land, leading to environmental degradation elsewhere. Criticisms of the UK’s cut in tariffs similarly miss the point. You can make a strong case in principle for placing green conditions on trade if you’re protecting a public good (carbon-sink forests and wildlife habitats), and they are equivalent to domestic environmental regulations. But tariffs are a bad way to do it. They do not discriminate between destructive and sustainable producers within each country, thus failing to create an incentive for individual growers to improve their practices.The EU says it is trying to address the latter issue through its new rules on deforestation, which apply to a much wider range of palm oil derivatives, not just biofuel. They set precise criteria for products being allowed into the EU single market, including banning those grown on land that was deforested after December 31 2020. This will require detailed technical efforts involving geolocation and record-keeping to prove compliance, and is much tougher than the UK’s anti-deforestation regime, which merely requires that producers follow local laws.Seen from Kuala Lumpur and Jakarta, the EU always has some kind of trade restriction in place — it’s just the rationales and instruments that change. There’s always a strong suspicion that its actions are driven by lobbying from European oilseeds producers. As well as the renewable energy directive, Brussels has also put antidumping duties on Indonesian biodiesel (which were later declared illegal by a WTO panel), and more recently on other products made from palm oil including fatty acids.On the related issue of logging, Indonesia spent five years between 2011 and 2016 agreeing a “voluntary partnership arrangement” with the EU to certify that its timber exports were from sustainably managed forests. Now the EU deforestation initiative, which involves onerous customs inspections of consignments, means starting a whole new process.Here too, the complainants have a point. Uncertain, onerous and ever-changing regulations act as an unfair trade barrier, whether or not the secret intent is nefarious protectionism. The European Commission is bracing itself for an onslaught of WTO cases over the deforestation rules, not least because Brazil, which has a record of successful litigation, is also affected. Future WTO rulings may at least sort out whether the EU regulations are proportionate and targeted. But WTO dispute settlement is a slow and painful process — the cases against the EU on biofuels are yet to produce rulings after years of litigation — and in the meantime millions of livelihoods are affected.The EU and other rich economies are failing to address concerns that their actions are arbitrary and lacking in good faith. There’s a case for environmental regulations on trade, but Brussels is making it poorly at the moment, and bringing the whole idea into [email protected] More

ZURICH/LONDON (Reuters) -Credit Suisse shares jumped over 20% on Thursday after the company secured a lifeline from the Swiss central bank to shore up investor confidence, though some analysts said the market relief could be shortlived. The Swiss bank’s announcement that it would make use of a $54-billion loan from the Swiss National Bank helped stem heavy selling in financial markets in Asia on Thursday and prompted a modest rally in European equities.While many in the market cheered the news, others were cautious. JPMorgan (NYSE:JPM) analysts said the loan from the SNB would not be enough to soothe investor concerns and the “status quo was no longer an option”, leaving a takeover of Credit Suisse as the most likely outcome.The collapse of two regional U.S. lenders in the last week has raised concern among investors and bank customers about the resilience of the financial system in the face of rising global interest rates.Credit Suisse has seen a steady stream of withdrawals from wealthy clients, which Luis Arenzana, founder of Shelter Island Capital Management, told Reuters was not “necessarily a panicky reaction to recent events in the U.S. alone”.”CS has not earned its cost of equity since 2013. The bank has lost a cumulative 2.5 francs per share since. This is not the result of just one or two big one offs as the bank reported a loss for five out of nine of those years,” Arenzana said. Credit Suisse shares surged by as much as 32% in the first few minutes of trade on news of the lifeline, and were last up 24% in heavy volume, reversing some of the losses that stripped off a quarter of its market value the day before. Shares were changing hands at a rate of 33.27 million per hour, the fastest on record, according to Refinitiv data.The bank’s shares fell 24% on Wednesday after its biggest backer said it could not offer any more financial assistance for regulatory reasons.In its statement early on Thursday, Credit Suisse said it would exercise an option to borrow from the central bank up to 50 billion Swiss francs ($54 billion). That followed assurances from Swiss authorities on Wednesday that Credit Suisse met “the capital and liquidity requirements imposed on systemically important banks” and that it could access central bank liquidity if needed. “Following yesterday’s extreme share price volatility, Swiss authorities offered their support. This is a strong and important signal. We hope the measures will calm down markets and break the negative spiral,” Bank Vontobel equity strategist Andreas Venditti said.”However, it will take time to fully regain trust in the franchise,” Venditti said.The Swiss franc was last up 0.5% against the U.S. dollar on Thursday, having fallen by 2.2% on Wednesday, marking its biggest one-day drop since the central bank loosened its currency peg in early 2015.TURBULENT WEEKThe cost of insuring against the risk of default on Credit Suisse bonds, which on Wednesday blew out to distressed levels, fell sharply on Thursday.Analysts at JPMorgan said in a note that a takeover was the most likely scenario for Credit Suisse, especially by rival UBS. “We see SNB liquidity support as indicated last night as not enough and believe CSG’s situation is about ongoing market confidence issues with its IB strategy and ongoing franchise erosion,” JPMorgan said.”In our view, the status quo is no longer an option as counterparty concerns are starting to emerge as reflected by credit/equity market weakness,” they said. The value of Credit Suisse’s bonds rose sharply. The bank’s additional tier 1 dollar-denominated bonds were up around 8.4 cents, having plummeted below 50 cents on the dollar the day before.”Credit Suisse is the first major bank, deemed too big to fail, to take up the offer of an emergency lifeline,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.”The $54 billion rescue wad is staunching worries about a bigger run on Credit Suisse and the repercussions for other institutions around the world exposed to its operations,” she added.Shares in other major European banks were mixed, with France’s BNP Paribas (OTC:BNPQY) up 0.9% while those in Societe Generale (OTC:SCGLY) and Germany’s Deutsche Bank (ETR:DBKGn) fell 1.2% and 0.3%, respectively. French bank shares, in particular, were hit hard on Wednesday, posting their largest one-day drops since the depths of the COVID crisis three years ago.($1 = 0.9276 Swiss francs) More

ROME (Reuters) – Italy’s government will approve a bill on Thursday to cut income and corporate taxes, a draft seen by Reuters showed, while also reducing penalties for tax dodgers who come clean and agree to pay the overdue sums.Tax evasion is an chronic problem in Italy, costing state coffers some 90 billion euros ($95.54 billion) per year, according to the most recent Treasury data.The draft shows the government intends to eliminate the risk of criminal convictions for those who settle with the authorities and catch up on missed payments, betting on a cooperative approach with taxpayers.It also offers small firms and the self-employed the chance to agree in advance how much they should pay to the state in taxes over the coming two years, without fear of inspections.In its EU-funded post-COVID recovery plan, Italy promised the European Commission to cut the so-called “tax gap” — the difference between potential tax liabilities and the amount of taxes actually paid — to 15.7% in 2024 from 18.5% in 2019.This implies recouping around 7-8 billion euros over the period.In Rome’s 2023 budget Prime Minister Giorgia Meloni, who took office in October last year, raised a limit on cash payments to 5,000 euros from a previous limit of 1,000, drawing criticism from some economists who warned of fuelling evasion.The cabinet is scheduled to meet at 1530 GMT to discuss and approve the bill, Meloni’s office said in a statement.Looking to overhaul the fiscal system, Meloni aims to reduce current income tax bands from four to three within two years, with the final aim of achieving a single tax rate before national elections in 2027.The cabinet will consider setting the three bands at 23%, 33% and 43% in the short term, government officials said, adding that a more expensive solution being studied would lower the second band to 27%.The current income tax levy, named IRPEF, is based on rates running from a minimum of 23% on annual income up to 15,000 euros, to a top rate of 43% on income above 50,000 euros.In addition, Meloni wants to split the current 24% corporate income tax rate into two by introducing a second lower band at 15% to reward entrepreneurs who create jobs and invest in innovation to boost productivity.($1 = 0.9421 euros) (editing by Gavin Jones) More

The operational halt is expected to continue until March 21, said Virgin Orbit, which has furloughed nearly all its employees, a source familiar with the matter said on Wednesday.The furlough is intended to buy the company time to finalize a new investment plan, Chief Executive Dan Hart said in a staff meeting, according to the source.Shares sank 45% in premarket trading on Thursday, leaving Virgin Orbit with a market capitalization of just around $200 million. That’s a far cry from the more than $3 billion valuation the company fetched in 2021 when it went public through a blank-check deal. The stark drop reflects a downturn in investor appetite for space startups such as Virgin Orbit and Rocket Lab USA, which saw its stock fall about 70% last year, as well as the challenges faced by these companies in efforts to send their rockets to orbit. Virgin Orbit in November cut its target for mission launches in 2022. Its rocket LauncherOne in January failed a mission to deploy nine small satellites into lower Earth orbit due to an anomaly during its flight through space. The company booked a loss of nearly $44 million in the third quarter ended Sept. 30 and had cash reserves of about $71 million at the time, a sharp drop from $122.1 million as of June-end. It has not announced a date for its fourth-quarter results.It has since made efforts to boost its cash position; about$10 million was raised last month and a $25 million investment in November from Branson’s Virgin Investments – its majority shareholder with a stake of about 75%. More