Aurelia Butler

PALMERDALE, Ala. (Reuters) – North of Birmingham, a gravel road bed slices through a series of steep ridges, part of a stalled effort to carve a 52-mile freeway around the rural fringes of Alabama’s largest city.Construction stopped five years ago on the road, dubbed the Birmingham Northern Beltline, after federal funding ran out. Critics have labeled the project a “dinosaur,” a “zombie” and a “black hole”. Barely a mile of it has been started, and Alabama officials haven’t provided the billions it would take to finish it.But the bulldozers could soon be moving again, thanks to U.S. taxpayers. At least $369 million in federal funding for the Beltline is headed Alabama’s way from a massive infrastructure package approved by Congress in November. That $1 trillion deal – the Infrastructure Investment and Jobs Act – allowed Democratic President Joe Biden to fulfill a campaign promise to fix the nation’s crumbling bridges, roads and airports.It’s also a big win for Alabama’s senior U.S. senator, Richard Shelby, a Republican who has worked for decades to carve out Washington dollars for the Beltline. Shelby voted “no” on Biden’s infrastructure package, arguing that it should have included military projects. The Beltline will get its funding all the same.Shelby declined to comment for this story.Other Beltline supporters portray the federal support as money still owed to Alabama from Democratic President Lyndon Johnson’s 1960s War on Poverty, which promised to help impoverished residents of the Appalachian mountains. At the southern end of that range lie the blue-collar exurbs and rural hamlets north of Birmingham.”This is the continuation of a promise made,” said Ron Kitchens, chief executive officer of the Birmingham Business Alliance, an economic development group.Opponents of the Beltline, meanwhile, are incensed that a gusher of cash is set to revive a dormant project that even local planning officials once ranked as a middling priority. Environmentalists say the Beltline would encourage sprawl and threaten wild areas – the antithesis of Biden’s green agenda.”It’s a true dinosaur of a pork barrel project,” said Nelson Brooke of Black Warrior Riverkeeper, a local environmental group. “It’s a perfect example of what shouldn’t be happening with this new money.”Biden’s administration is writing the check, but it has little control over Alabama’s project. “It is up to state departments of transportation to make decisions to move projects forward,” said Nancy Singer, a spokesperson for the Federal Highway Administration.PHANTOM FREEWAYThe Beltline isn’t the only controversial aspect of Biden’s infrastructure deal. Many Democrats groused that it favors freeways over transit, while some Republicans derided it as a wasteful grab bag of Democratic priorities.Alabama’s phantom freeway might never have made it past the blueprint stage if not for Shelby, a Birmingham native who has served in Congress since 1979. His name adorns government facilities across Alabama, a testament to his skill at steering federal dollars to a state where household income ranks 46th of the 50 U.S. states.Starting around the turn of the century, Shelby and other members of Alabama’s congressional delegation secured money for the Beltline through “earmarking,” a budget process that ensured the highway got dedicated funding without having to compete with other projects.But the real breakthrough came in 2003, when Shelby got the Beltline added to the Appalachian Development Highway System, a road network aimed at reducing isolation in the mountainous region stretching from northern Alabama to western New York. The system was largely complete at that point, so Shelby’s move ensured Alabama would get a larger share of the dollars going to that network.Then came a series of corruption scandals that spurred federal lawmakers to crack down on what many saw as wasteful spending nationwide. Congress banned earmarks in 2010. Two years later, it eliminated funding for the Appalachian highway system amid criticism by legislators such as Representative Jared Polis, a Democrat who now serves as governor of Colorado, who called the Beltline a “zombie highway” and the “Alabama Porkway.”With those two funding streams cut, the Beltline had to compete for money on its own merits. But the highway was not deemed particularly urgent by the Regional Planning Commission of Greater Birmingham. In a 2006 report, it ranked the Beltline 36th out of 54 transportation proposals, concluding it would do little to ease traffic congestion.Beltline proponents say the road could help the thinly populated northern exurbs draw the sorts of shopping malls and housing developments that have proliferated to the south of the city since the 1970s. But the Alabama Department of Transportation in 2012 estimated that, once completed, the Beltline would boost the population in nearby towns by just 1.5%.Environmental groups in 2011 sued unsuccessfully to stop the project, saying the Beltline would harm wildlife like the vermilion darter fish, which is found nowhere else in the world. The highway would cross 125 streams and require construction teams to level more than 4,000 acres (1,619 hectares) of forest.But business groups and dozens of local politicians continued to advocate for the road. By the time it broke ground in 2014, Federal Highway Administration figures indicated that, at a cost of $5.4 billion, it would be the priciest highway project in the country on a per-mile basis, though subsequent estimates have been lower. State officials estimated at the time it would take 40 years to complete.Two years later, construction ground to a halt when federal money ran out. At that point, $162 million had been spent to produce a partially built, 1.3-mile (2 km) stretch of roadway.Most U.S. highways are built with a mix of federal and state money. But Alabama chose not to tap state accounts for the Beltline, instead focusing on maintaining existing roads and expanding capacity elsewhere. No work has been done since.”People are tired of dribbling money into a black hole,” said Sarah Stokes, a lawyer with the Southern Environmental Law Center, which opposes the project.On a recent weekday afternoon, signs of decay were evident at the construction site near Palmerdale, a hamlet of 5,400 residents 17 miles (27 kilometers) northeast of Birmingham. Rainstorms had etched gullies into the gravel roadbed, and a 20-foot-tall (6 meters) chinaberry tree sprouted from a concrete retaining wall at the top of a ridge. Tire tracks, trash and a bullet-riddled tin can littered the site.BACK ON TRACKBut patience – and seniority – pay off in Washington. Shelby got funding renewed for the Appalachian highway network in 2019, when he headed the powerful Senate committee that handles spending.Then came the bipartisan infrastructure package. Lawmakers from Appalachian states, led by Democratic Senator Joe Manchin of West Virginia, inserted $1.25 billion for the highway network into the deal. Alabama is due to get $369 million, the largest share.Much more will be needed. The Appalachian Regional Commission, a government body, estimated last year that it would cost $3.1 billion to finish the Beltline, and the state said in 2019 that it would take until 2045 to complete just one-third of the road. Experts say such estimates can fluctuate widely due to changing labor costs, interest rates and other factors.As before, Alabama does not plan to put its own money into the project. Budget experts say that is telling.”It’s not that critical of a project,” said Steve Ellis, president of Taxpayers for Common Sense, a Washington watchdog group. “Otherwise the state and local interests would have found a way to fund this.”Birmingham-area officials say they are negotiating for the state and local governments to chip in. Stan Hogeland, mayor of Gardendale, a city of 16,000 residents along the Beltline’s path, believes the road could speed commute times and attract manufacturers serving the state’s auto industry.”I hope it hurries up and gets through,” Hogeland said.Others see it as yet another highway designed to steer investment away from Black-majority cities such as Birmingham.Anna Brown, an activist who sits on an advisory board for the planning commission, said it would be better to send the money back to Washington.”Everything free ain’t always good for you,” Brown said of the federal funds. “Just because it’s free doesn’t mean it’s going to be beneficial.” More

Russia’s war in Ukraine is delivering a “supply shock” to the eurozone economy that will push up prices, slash growth and drain consumer and business confidence, says Christine Lagarde, president of the European Central Bank.Presenting her gloomiest assessment yet of how the invasion will hit the bloc’s economy, Lagarde said Europe was “entering a difficult phase” as she outlined how the soaring price of energy, food and manufactured goods would squeeze consumers’ purchasing power. The conflict was “starting to drain confidence”, she added.“Clearly, the longer the war lasts, the higher the economic costs will be and the greater the likelihood we end up in more adverse scenarios,” she said, specifying that higher energy prices had already cut eurozone income by 1.2 per cent in the fourth quarter of 2021. “That figure would imply a loss of about €150bn in one year,” she added during a speech in Cyprus.Her comments came as the German government on Wednesday took the first formal step towards gas rationing as it prepared for a potential halt in deliveries from Russia due to a dispute over payments, which could plunge the industrial heartland of Europe into crisis.The group of economists that advises Germany’s government warned of a “substantial” risk of recession if Russian energy imports were cut off, which could drive inflation in Europe’s largest economy as high as 9 per cent. The council of economic advisers also slashed its 2022 growth forecast for Germany from 4.6 per cent to 1.8 per cent and raised its inflation prediction from 2.6 per cent to 6.1 per cent. An EU survey published on Wednesday showed European consumers and businesses have turned much more pessimistic since the Russian invasion last month, fearing it would reduce spending, increase unemployment and raise prices faster.Meanwhile, Spanish inflation soared to 9.8 per cent in March, its highest level since 1985, rising from 7.6 per cent last month and well above expectations, the country’s statistics office said on Wednesday. Early regional figures indicated German inflation was set to rise above 7 per cent in March, which would be the highest level since the early 1980s. Economists also expect eurozone price growth to set a new record of 6.6 per cent in March, when those figures are published on Friday.Investors are betting the ECB will raise rates several times and lift them back up to zero by the end of the year. They increased those bets on Wednesday, sending the German 10-year bond yield up to 0.68 per cent.The ECB this month responded to soaring inflation by outlining plans to stop net bond purchases by September, setting the stage for it to raise rates this year if inflation stays high. Lagarde said on Wednesday: “The best way that monetary policy can navigate this uncertainty is to emphasise the principles of optionality, gradualism and flexibility.” But the ECB president also signalled EU governments could do more to support the economy, saying: “Europe needs a plan to ensure that the necessary investment comes online as quickly and smoothly as possible, with public and private finance reinforcing each other.”The European Commission said its economic sentiment indicator fell 5.4 points to minus 108.5 this month, its lowest level for 12 months, “mainly due to plummeting consumer confidence”. Confidence fell among companies in industry and retail trade but was steady in services, the commission said. Inflationary pressures intensified as companies’ selling price expectations rose to a record high.The outlook for the labour market also worsened as consumer unemployment expectations rose sharply and employment expectations dipped in most sectors except for services. More

LONDON (Reuters) – Euro zone bond yields rose on Wednesday, keeping multi-year highs in sight as inflation data from Germany and Spain kept alive expectations that the European Central Bank may have to hike rates sooner rather than later to curb price pressures.A day after rising above 0% for the first time since 2014, Germany’s two-year bond yield was up six basis points at 0.01% — keeping the previous day’s highs in sight. Across the single currency bloc, benchmark 10-year bond yields too were 5-6 bps higher on the day, as inflation numbers raised rate-hike prospects.Spanish consumer prices rose 9.8% year-on-year in March, their fastest pace since May 1985, while regional data from five states suggested German inflation is likely running above 7% in March.”We have huge numbers for inflation from Spain and parts of Germany, which is not something people would have forecast two or three months ago,” said Ludovic Colin, a senior portfolio manager at Swiss asset manager Vontobel. “It’s hard to forecast things in the short-term and that’s why we have a panic in yields and it’s hard to say where yields are going and when they will stop.”Bond markets across major economies have had their worst sell off in years. Two-year German bond yields are up 53 bps in March and set for this biggest monthly jump since 2008. And while ECB chief Christine Lagarde on Wednesday said food and energy prices in the bloc should stop rising, others pushed the case for higher rates. ECB policymaker Peter Kazimir said the first ECB rate hike could come this year, while it would be possible under the ECB’s forward guidance for it to raise rates in September and December as long as it stops its bond purchases before then, fellow policymaker Robert Holzmann said.Euro zone money markets price in almost 70 basis points of ECB tightening this year.Chris Scicluna, head of research at Daiwa Capital Markets, said the ECB was likely to hike in 25 bps instead of 10 bps increments as it has done in the past.”We don’t see the need to move in smaller increments this time around,” he said, adding: “I think there’s a desire to get at least up to a zero deposit rate.”The ECB’s depo rate is at -0.5%, the ECB last hiked rates in 2011.Germany’s 10-year Bund yield was 5 bps higher on the day at 0.68%, near four-year highs hit on Tuesday.U.S. bond markets were also in focus a day after the closely watched U.S. 2-year/10-year Treasury yield curve briefly inverted for the first time since September 2019 in a sign that recession risks are rising. That spread was last at around 8 bps. More

LONDON/ZURICH/NEW YORK (Reuters) – Yevgeny Chichvarkin, a telecoms tycoon who fled Russia in 2008 and became a high-profile London restaurateur, has long been a vocal supporter of Ukraine.Together with wife Tatiana Fokina, the multimillionaire says he has sent four truckloads of medical and protective equipment to Poland to help Ukrainians since the Russian invasion on Feb. 24. Chichvarkin, a burly man with a waxed moustache, said he drove the first load himself.But the 48-year-old entrepreneur, a long-time critic of Russian President Vladimir Putin, said he has just unexpectedly had one of his Swiss bank accounts frozen. He declined to say by which bank.Chichvarkin is one of a growing number of Russians living abroad who are finding issues accessing their money, even when they are not the direct targets of Western sanctions.Reuters interviews with nine Russians living overseas – as well as their wealth managers, lawyers, tax advisers, real estate and art brokers – suggest that Western sanctions meant to punish Putin’s inner circle are also broadly ensnaring Russian passport holders.Four Russians living overseas with dual citizenship described banks freezing their accounts or payments in London, Zurich and Paris. One wealthy émigré in London said he had switched to cash to make purchases and was keeping a low profile. Two wealth advisors and a lawyer described applications for bank accounts by Russian clients being rejected. Banks said they were taking extra precautions with Russian money. And three brokers said some real estate and art deals had stalled. A Canadian-American lawyer said his Russian clients were afraid to take international trips for fear of being stopped at customs as Western banks cast a wide blanket of suspicion on Russian money – even donations to charities. Dual passports no longer provide escape routes as they once did. “I am dealing with Russians who can’t get out of hotels, students who have no money because credit cards are valueless,” said Bob Amsterdam, a founding partner of Washington- and London-based law firm Amsterdam & Partners. “Banks … are refusing Russians bank accounts: they are closing their doors to Russians on nationality,” said Amsterdam, who is based in London. “Leading law firms in the City have closed their doors to Russians in terms of nationality.” ‘YOU NEED TO BE VERY QUIET’Several lawyers representing wealthy Russians in Europe spoke about a pervasive climate of distrust. One tax and wealth planning expert, who asked not to be named due to a climate that she said penalized association with Russia, said that Russians were being scrutinized regardless of their place of residence or wealth. “Currently, everything that is Russian is toxic, which means that everyone is trying to be extremely, extremely careful in terms of what to do with Russian clients,” said the lawyer, a dual Russian and British citizen, who runs a law firm in Zurich. Journalist Elena Servettaz, a dual citizen who has lived in France since 2005, said French bank Crédit Mutuel rejected a transfer of less than 1,000 euros to her account — money sent to her from London to support Ukrainian refugee aid efforts. When Servettaz called the bank, she was told the transaction had been flagged due to her Russian nationality. Servettaz received the money more than a week later.”It’s so unfair when you are part of the Russian opposition, you’re helping Ukrainian refugees, and they’re saying you’re Russian so you can’t have your money,” Servettaz said. Crédit Mutuel said that European banks were obliged to apply “the greatest prudence” in scrutinising transactions that could be affected by E.U. sanctions, and that additional checks required to ensure compliance could lead to delays, though it was doing its best to limit the effects on customers.A Crédit Mutuel spokesperson said in an emailed statement that the situation relating to Servetta “was quickly resolved once the customer sent us the requested information.” Reuters reported this month that European Union regulators have told some banks to scrutinise transactions by all Russian and Belarusian clients, including EU residents.Some wealth managers in Europe have sought to distance themselves from economic and political fallout. Switzerland’s Julius Baer this month began blocking new business with Russian clients, two sources familiar with the operations said. UBS CEO Ralph Hamers said all Russian passport holders have effectively become semi-sanctioned.Julius Baer said it was not accepting new Russian clients with a Russian domicile but continued to serve existing Russian clients “in compliance with all applicable laws, regulations or sanctions.”Russian writer Grigory Chkhartishvili, who lives in London and whose last name is Georgian, successfully transferred a sum of money through British bank Barclays (LON:BARC) to support his Ukrainian refugee assistance charity, True Russia. But his wife, whose last name is Russian, was blocked by Barclays when attempting to send money to the same charity, he said. The bank requested a face-to-face interview with her. “My sum was ten times bigger, but it was no problem,” Chkhartishvili said. “It shows the atmosphere.”Chkhartishvili said his wife, who declined to be interviewed by Reuters and asked for her name not to be made public, had told him she was able to transfer the money the next day after she called the bank and explained that she was helping Ukrainian refugees. Barclays did not respond to a request for comment.A wealthy Russian oil and banking magnate, who asked not to be identified so he could speak freely about his financial situation, said he felt he had become “collateral damage” from Russia’s invasion – which Moscow calls a “special operation”. Based in London for three decades, he said he still had businesses in Russia and was anxious about greater financial restrictions, despite not being on a sanctions list.”I have some savings,” he said, adding he was considering selling European assets. “You need to live out of cash … You need to be very quiet.”‘RUSSOPHOBIA’ In the basement of one of his newest ventures, The White Horse pub in London’s upmarket Mayfair district, Chichvarkin says he is confident his lawyers will be able to unfreeze his Swiss bank account. It is the only account of his that has been frozen, he said. He believes that is because it is the only one he opened with a Russian passport. At the same time, Chichvarkin believes his and his wife’s opposition to Putin and the war, as well as their vocal support for Ukraine, has helped protect their businesses from anti-Russian hostility by customers and the public, stirred by what Fokina calls “Putin’s war”.Still, their Michelin-starred restaurant Hide – which they own alongside wine boutique Hedonism Wines, where a bottle can cost 124,000 pounds ($163,500) – received a one-star Google (NASDAQ:GOOGL) review about two weeks into the war, Fokina’s assistant said.The rare poor review, among 1,767 others that give the restaurant an average 4.5-star rating, said simply: “Russian owned”. It has since been removed.”You read about people cancelling Tchaikovsky concerts, people vandalising Russian food shops,” said Fokina. “This is London 2022. How did we get here so quickly?” More