Economy

ANKARA (Reuters) – Turkey’s central bank stuck to its forecasts for a sharp drop in inflation on Thursday, saying the increasing predictability of the lira’s exchange rate plus financing support meant there was no longer the basis for large price rises.Presenting a quarterly economic report, the bank’s Governor Sahap Kavcioglu stood by previous year-end annual inflation forecasts for 2023 and 2024 of 22.3% and 8.8% respectively. While most mainstream economists expect Turkey’s inflation, which hit a 24-year high of 85% back in October and was 65% in December, to continue to cool in the coming months, they see it staying well above the central bank’s projections.The median estimate for inflation at end-2023 in the latest Reuters poll was 42.5%, for example, and 26.4% for 2024.Kavcioglu, who has slashed interest rates from 19% to 9% over the last year, said data were confirming the slowdown and monthly rates were getting closer to historical averages too. Pricing behaviour should follow, he added. “In an environment where cost shocks are fully reflected, predictability has increased in exchange rates, company profitability has improved and financing costs are supported, there is no basis for the continuation of high price increases,” he said.The central bank’s forecasts also show oil prices at $80.8 in 2023, slightly above its $79.3 forecast three months ago.”The fact they are continuing to show confidence that inflation will fall sharply does not surprise me,” said Cristian Maggio Head of Emerging Markets Strategy at TD Securities in London.”They are not trying to achieve their inflation target; they are trying to keep the lira stable and keep growth as buoyant as possible ahead of the elections in May,” he said, noting the bank’s 9% interest rate was still 55% below the current annual inflation rate. President Tayyip Erdogan signalled last week that Turkey will hold elections on May 14, a month earlier than he had earlier flagged, setting the clock ticking on perhaps the most consequential vote in the century-long history of the republic.Polls show the parliamentary and presidential elections will be tight, with an opposition alliance promising to roll back the country’s current unorthodox economic policies. GRAPHIC: Underestimating inflation Underestimating inflation – https://www.reuters.com/graphics/TURKEY-CENBANK/FORECASTS/egvbklknepq/chart.png More

TOKYO (Reuters) -Japan’s government debt will top 1,100 trillion yen ($8.47 trillion) for the first time at the fiscal year end in March 2027 as the country remains heavily dependent on borrowing, a draft estimate seen by Reuters on Thursday showed.Even assuming a rosy scenario in which the world’s third-largest economy grows an annual 3% in nominal terms, the debt would continue to grow to just shy of 1,200 trillion yen at the end of the forecast period ending in March 2033, it showed. The estimate highlights Japan’s dire fiscal state, which is forecast to worsen further as Prime Minister Fumio Kishida’s administration plans big increases in defence spending.In annual policy consultations with Japan, the International Monetary Fund (IMF) on Thursday urged the government to get its fiscal house in order by raising taxes and reducing spending.”Our overall message is that any increase in expenditures should be met with an increase in revenues. This is important given Japan’s very elevated level of debt-to-GDP,” IMF First Deputy Managing Director Gita Gopinath told a news briefing.Reflecting snowballing debt, interest payments would nearly double from 8.6 trillion yen for fiscal 2023 to 17.1 trillion yen by the end of the forecast period, the draft government estimate shows.The government will present the estimate to parliament as a reference for lawmakers’ debates on the next fiscal year’s budget.The Ministry of Finance, in separate projections issued earlier this month, said it could keep new bond issuance at some 32 trillion yen in the next few years.Rounds of COVID-19 stimulus spending have helped boost rolling-over bonds to 150 trillion yen, which will come down to 130 trillion yen in fiscal 2024, the projections showed.($1 = 129.9200 yen) More

Several colleagues have asked me about some curious recent news: the exodus of billionaires from Norway. As our Nordics correspondent Richard Milne has reported, what used to be a tiny trickle of very rich Norwegians moving to Switzerland has turned into a (relative) flood in the past year. And they blame Norway’s wealth tax, a levy paid annually in proportion to individuals’ net worth.Free Lunch readers know that I take a close interest in both wealth taxes and in Norway. So here, by popular request, is an attempt to make sense of the world’s least important migration crisis.Norway has had a net wealth tax for a very long time and remains one of few countries that still levy one. But it has recently gone up. The centre-left government that came into power in late 2021 has raised the rate from 0.85 per cent to 1.1 per cent on the largest fortunes, and reduced the valuation discount for stocks. They also raised the tax-free allowance, but for the richest the changes will have meant significantly more wealth tax.So is this what is driving the rich away, and if so, is it a bad thing? Above all, is it an argument against wealth taxes? First, a superficial puzzle. You would think that if the wealth tax is the reason for moving, you would not move to Switzerland, which is one of the few other countries that have one. But the rate is lower in Switzerland. (That rate varies by canton, from about 0.1 per cent in the lowest-taxing ones to a top marginal rate of about 1 per cent in Geneva, which is similar to the Norwegian rate. No prizes for guessing that Geneva is not where Norway’s tax exiles choose to go.) Not only that, Swiss cantons can, in practice, exempt foreigners with no Swiss income from a real wealth tax by applying it to a deemed wealth level that is unrelated to actual wealth.But that has been the case for some time. Yet, there was no billionaires’ exodus before now. A Norwegian government commission appointed to examine the tax system, including the wealth tax, delivered its report right before Christmas. Among its many findings was that emigrants with a net worth above NKr100m ($10mn) numbered 130 in the whole decade up to late 2022 — less than 5 per cent of the whole group with such wealth — and 115 immigrated. But much of that happened in the past two years, and judging from press reports, a lot more people will soon be registering as emigrants with the tax authorities.So it stands to reason that tax changes have something to do with it. And it is not just the wealth tax that has gone up. The government raised taxes on excess profit in high-rent industries such as power generation and fish farming. It has also proposed tightening the taxation of corporate owners’ use of the property their companies own, making it more expensive to hold luxury houses or boats, for example, through corporate structures. All this taken together has clearly made the very wealthy feel less loved than they think they deserve.But it is, above all, the wealth tax they complain about — at least those among the exiles willing to admit to newspapers to be motivated by tax at all. So let us take their word for it. It is not a good look, especially in contrast with another group of very rich people heading for the Swiss mountains recently: the campaigning group of “patriotic millionaires” who went to Davos not to complain about wealth taxation but to plead for more.The Norwegian tax exiles do not, of course, say that they just want to pay less. Rather, they pose as geese that lay golden eggs: they move because the wealth tax forces them to take capital out of their companies to pay it, and that, in turn, is bad for growth, business development and employment where their companies are based. We do it for the sake of the jobs we have created, in other words. Or perhaps: nice economy you’ve got there; it would be a shame if something happened to it. There are two problems with this argument, though. One is that even if wealthy owners did have to take out larger dividends from their companies in order to pay the wealth tax, there is little sign that Norwegian companies themselves suffer from a lack of access to capital. The difference is just that more capital will come from other sources than the original owners, and it may be precisely this dilution that rankles, especially for self-made entrepreneurs or family businesses. The other problem with the golden goose argument is that if owners’ liquidity really was an issue, the government could easily remedy this not by lowering the wealth tax but by allowing payments to be deferred — even to the point of sale, realisation, or bequest. And, in fact, deferral was allowed for a few years in the past decade, but hardly any wealth tax payer chose to use this liquidity facility for the very rich. That rather suggests that few of them struggled to find the cash to pay without raiding their companies’ coffers. One study found that seven out of eight wealth tax payers owned liquid assets (that is, apart from company ownership) worth more than 10 times their annual wealth tax liability.In short, I have little sympathy for the tax exiles’ complaints. It is an honest if unadmirable matter to want to pay less tax. But the golden goose defence is not credible. Norway’s economic growth has not suffered from the wealth tax before and it will not suffer now — in fact, there is a case to be made that taxing net wealth is better for productivity than other ways to tax capital. In any case, whatever capital drought was supposedly imposed on these people’s companies before has presumably been relieved by their self-sacrificing moves to Switzerland. The deferred payment facility should be permanently reintroduced and expanded, however, to remove any remaining possibility that the wealth tax starves companies of capital.This does not mean the government need not worry about the billionaires’ exodus. It will presumably lead the tax base to shrink modestly. And it is politically toxic — particularly for an advanced economy and welfare state based on high levels of mutual trust — to leave an impression that it is in practice optional for the very rich to pay certain taxes.So I find it astonishing that, to my knowledge, there has been no consideration in Norway of taking a leaf from the US book and tie the wealth tax to citizenship instead of just residence. The US shows the viability of worldwide taxation even if it does not have a wealth tax. Norway could aim for a similar system applied to its wealth tax, imposing it (with deductions for wealth tax paid elsewhere) on those with Norwegian citizenship or long-term residence permits. Citizenship-based wealth taxation is admittedly not entirely straightforward. It may require renegotiating some tax treaties (in particular with Switzerland), and it is possible, if much more costly, to relinquish citizenship as well. But if either complication arises — with tax treaties or with the rich queueing to hand in their passports — it is possible instead to impose a high exit tax on net wealth when someone abandons their tax residence or otherwise moves their wealth beyond jurisdictional reach.Given how longstanding the wealth tax is, it is striking that these policy tweaks have not been thoroughly analysed and readied for implementation. But better late than never. They would not, of course, address some rich people’s feeling that their tax burden is unfair and that the government fails to accord them their due respect and admiration as wealth creators. But they just may lead some to think Switzerland was not all it was cracked up to be.Other readablesSpeaking of patriotic millionaires, I interviewed one last year, and just this week one more has written in indignation at a former UK chancellor’s tax troubles. Adam Tooze’s Chartbook newsletter gives an excellent state of play of the European Central Bank’s approach to inflation.As the ECB and other central banks raise interest rates, they find themselves paying billions to banks with large reserve holdings. Paul De Grauwe and Yuemei Ji point out that there is no need for these subsidies if central banks include required reserve ratios in their monetary policy toolbox.David Pilling dives into Africa’s indomitable experiments with charter cities.And David Skilling observes that transitory (yes!) inflation is giving way to wartime inflation.Numbers newsThe EU now has to pay higher borrowing costs than the German and French governments.Read the story of Britishvolt’s demise, and weep at the feeble outlook for the UK’s battery production capacity.

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TOKYO (Reuters) -The Bank of Japan should let government bond yields move more flexibly and be ready to raise short-term interest rates swiftly if “significant” upside risks to inflation materialise, the International Monetary Fund (IMF) said on Thursday.In a proposal after an annual policy consultation with Japan, the IMF said the central bank’s ultra-loose monetary policy remains appropriate as inflation is likely to fall back below its 2% target by the end of 2024 unless wages rise significantly.But with upside risks to inflation becoming more prominent in the world’s third-biggest economy, the IMF said, the Bank of Japan (BOJ) should give long-term yields freer rein, such as by raising its 10-year bond yield target or widening the range it tolerates.”We don’t see this as really changing the (BOJ’s) accommodative stance. It’s more to balance some of the impact on the real economy against the impact on financial markets,” IMF Japan Mission Chief Ranil Salgado said on Thursday.”It also makes it easier to begin the transition towards an eventual raising of the short-term rate,” he told Reuters, adding the BOJ could consider steps to enhance flexibility in bond yields even before its inflation target is durably met.With Japan’s core consumer inflation at a 41-year high 4%, double the BOJ’s target, markets have been betting the central bank will phase out its aggressive stimulus after dovish Governor Haruhiko Kuroda retires in April.Unlike central banks worldwide that have aggressively raised interest rates, the BOJ has stuck with an ultra-low rate policy, called yield curve control (YCC), that applies a negative interest rate to some short-term funds and targets the 10-year yield around zero.The global lender’s proposals contrast with those it made last year, when it urged the central bank to maintain ultra-loose policy to support Japan’s recovery from the damage of the COVID-19 pandemic.”Given the two-sided risks to inflation, more flexibility in long-term yields would help to avoid abrupt changes later. This would help better manage inflation risks and also help address the side-effects of prolonged easing,” the IMF said in a statement issued after the policy consultation.EYING THE EXITThe IMF said the BOJ could also consider options such as targeting a shorter-term yield or the pace of its bond buying. Such steps, it said, would help mitigate the side effects of prolonged easing, such as distortions in the yield curve caused by the BOJ’s massive government bond purchases.If inflation risks heighten significantly, the BOJ must withdraw monetary support more forcefully, such as by raising short-term rates “much earlier and above the neutral rate” to anchor inflation back towards its 2% target, it said.A hike in short-term rates, however, is unlikely in the near-term and can be considered only when there is clear evidence that wages will keep rising and help the BOJ durably achieve its inflation target, Salgado said in the interview.The BOJ surprised markets in December by doubling its allowance band for the 10-year yield to 0.5% above or below zero. It beefed up a market operation tool in January to defend the new cap, aiming to extend YCC’s lifespan.Aside from increased side effects of prolonged easing, the BOJ’s ultra-low interest rates have drawn fire from critics for causing the yen to plunge, boosting the cost of raw material imports that put more pressure on companies and households.The dollar touched a 32-year high around 152 yen last year, prompting authorities to intervene in the currency market to prop up the Japanese currency, though it has since rebounded to around 130.The IMF said while currency intervention could tame excessive volatility and keep the pace of yen moves better aligned with fundamentals, its effects are likely temporary.Intervention, then, “should be limited to special circumstances such as disorderly market conditions, risks to financial stability” and concerns that foreign-exchange moves could de-anchor inflation expectations, the IMF said. More

When the pandemic first disrupted the U.S. economy — and economic data — in 2020, The New York Times changed the way it reported certain government statistics. Now, with the pandemic shock no longer producing exceptional economic gyrations, it is changing back.On Thursday, with coverage of the Commerce Department’s preliminary estimate of U.S. gross domestic product for the fourth quarter of 2022, The Times is again emphasizing the annualized rate of change from the prior quarter, rather than the simple percentage change from one period to the next.In the United States, G.D.P. figures have traditionally been reported at an annualized rate, meaning the amount the economy would have grown or shrunk if the quarter-to-quarter change had persisted for an entire year. Annual rates make it easier to compare data collected over different periods, allowing analysts to see quickly whether growth in a quarter was faster or slower than in 2010, for example, or in the 1990s as a whole. But annual rates can also be confusing, particularly during periods of rapid change. When shutdowns crippled the economy early in the pandemic, G.D.P. contracted at an annual rate of nearly 30 percent. To nonexperts, that might sound as if economic output had shrunk by nearly a third, when in reality the decline was less than 10 percent. As a result, The Times decided to emphasize the quarterly change in its coverage, a decision explained in detail at the time. (The Times continued to provide the annualized figures as well.) But now — despite ongoing disruptions tied to the pandemic and new challenges, like high inflation — economic data is beginning to look more normal. So The Times is returning to its practice of reporting G.D.P. and related statistics as annualized rates. More

The IMF has warned that an abrupt change in Japan’s ultra-loose monetary regime would have “meaningful spillover” effects on global financial markets, underscoring the need for the Bank of Japan to clearly communicate about its future policy. In an interview, Gita Gopinath, the IMF’s first deputy managing director, called on the BoJ to take a flexible approach to controlling yields on government bonds as she warned of “significant upside risks” to inflation in the near term. She added that Asia’s most advanced economy was at “a delicate juncture”. The BoJ, which will have a new governor in April, has come under increasing market pressure to shift away from its long-standing easing measures as Japan’s core inflation rate has risen to a 41-year high of 4 per cent. It faces the challenge of maintaining its accommodative monetary stance to achieve its inflation target while avoiding overshooting and turmoil in currency and bond markets.“We still believe that it’s important for monetary policy to remain highly accommodative at this point. Yield curve control is a part of that toolkit,” Gopinath said during her visit to assess Japan’s economy. “In the near term, we see significant upside risks to inflation. The increase in flexibility [in managing the yield curve] would help.” The central bank slightly raised the cap on yields on 10-year Japanese government bonds in December, but it has made no further changes to its massive easing measures, arguing that price increases have not led to a rise in wages that would enable it to durably achieve its 2 per cent inflation target. The IMF suggested the BoJ could consider three options to allow flexibility in long-term JGB yields: widen the 10-year band around the yield target and/or raise the 10-year target; shorten the yield curve target; or shift to a quantity target of JGB purchases. “In the scenario that significant upside inflation risks materialise, monetary stimulus withdrawal will have to be much stronger,” it said in a statement. Longer term, however, the IMF expects Japan’s core inflation, which excludes volatile food prices, to peak in the first quarter of this year and gradually decline to below 2 per cent by the end of 2024. It expects growth of 1.8 per cent in 2023 to slow to 0.9 per cent in 2024.“We still believe that there are not enough signs that this will lead to inflation being durably at the 2 per cent target,” Gopinath said.In December, the BoJ stunned investors by announcing it would allow 10-year government bond yields to fluctuate by 0.5 percentage points above or below its target of zero, replacing the previous band of 0.25 points. Last week, it introduced an expanded programme of loans to banks to stabilise the yield curve.

During a policy meeting last week, BoJ board members also said the central bank needed to continue with its current YCC policy, noting that it would take time to sustainably achieve its inflation target. “The bank should carefully explain that it needs to continue with monetary easing, that its accommodative policy stance has not been changed, and that it will take time to achieve the price stability target of 2 per cent in a sustainable and stable manner because wage increases have not yet become full-fledged,” board members said according to a summary of opinions at the meeting released on Thursday. More

The Philippines has recorded its strongest economic growth in 45 years, defying a global slowdown and rising inflation after lifting all pandemic restrictions at the end of last year.The south-east Asian economy grew at an annual rate of 7.2 per cent in the fourth quarter of 2022, beating economist expectations of about 6.5 per cent growth, according to Philippine Statistics Authority data. Full-year gross domestic product increased by 7.6 per cent, its strongest growth since 1976.The Philippines, which relies largely on remittances from overseas workers and business outsourcing activities such as call centres, alongside farming and fishing, suffered one of Asia’s sharpest contractions during the pandemic because of strict lockdowns.The government on Thursday attributed much of the growth to the country’s reopening in the final three months of the year, with the services industry, consumer and government spending, exports and imports all posting strong rises.Economic planning secretary Arsenio Balisacan predicted a further boost to the economy this year from the end of zero-Covid in China, saying it would “surely be a boon”.The upbeat outlook of the Philippines and many of its regional emerging market neighbours including Indonesia and Malaysia contrasts sharply with that of developed nations.Philippine president Ferdinand Marcos Jr, who attended the World Economic Forum in Davos last week, predicted the economy would keep growing at near 7 per cent this year.US and European central bankers speaking at the conference instead vowed to “stay the course” on interest rate increases to cool down their economies and tame high inflation.John Williams, president of the Federal Reserve Bank of New York, said he expected growth to slow to a “modest” pace of roughly 1 per cent in 2023, while Christine Lagarde, head of the European Central Bank, projected growth of 0.5 per cent.However, analysts cautioned the Philippines economy could be hit by inflation even as they revised up growth forecasts. “High inflation — the headline rate reached 8.1 per cent year on year in December — will drag on the purchasing power of consumers,” research company Capital Economics said in a note.“Government spending is also likely to remain subdued. Despite the government’s ambitious infrastructure drive, total spending this year is set to increase by just 4.9 per cent in nominal terms,” said Gareth Leather, senior Asia economist at Capital Economics.Even so, south-east Asia’s emerging market economies have been buoyed by the fading prospect of more aggressive interest rate rises by the US Federal Reserve, thanks to signs that consumer spending is starting to ebb, the labour market is cooling and price pressures have eased. Regional currencies have come under less pressure as net foreign outflows of bonds eased at the end of 2022, allowing governments to focus on supporting their economies.

The Association of Southeast Asian Nations, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, was among the fastest growing regions in the world last year. Economists expect the region’s economic growth to moderate this year but remain above 4 per cent — higher than the IMF’s latest global average forecast of 2.7 per cent.Last week, central bankers in Indonesia and Malaysia also signalled they would focus on growth and indicated they expected inflation to moderate.Bank Negara Malaysia unexpectedly held its interest rate, while Bank Indonesia raised its benchmark rate by only 25 basis points and suggested it could be nearing the end of its rate-rise cycle. More

Joe Biden’s multibillion-dollar Inflation Reduction Act has delivered a big green bonus for climate experts and US business while infuriating America’s trading partners.The bill, passed last summer by the US Congress, earmarked $369bn for clean energy and climate-related projects, provoking a litany of complaints from EU governments that claim it violates trade rules and distorts competition.But business leaders and US climate envoy John Kerry argue that instead of expecting major concessions from the US, the EU and other partners need to take urgent steps to make their own green investment conditions more attractive. The alternative could be lost business and slowed efforts to address climate change.European companies that are already drawing up plans to boost US spending include BMW, Italian energy group Enel and Norwegian battery group Freyr.“The basic issue is that the US has created a business case for investment in green technologies,” said Luisa Santos of BusinessEurope, a Brussels-based lobby group. The EU faces more complex regulation and higher energy costs, which “is a very substantial incentive to go to the US”. What is Biden’s act supposed to achieve?

The IRA is aimed at creating a new economy of “green jobs” in the US while reducing reliance on China. © EPA-EFE

By offering companies billions of dollars — largely through a system of tax credits — the law aims to jump-start investment in new and nascent clean energy technologies. It also rewards companies for setting up in the US, and for reorganising supply chains to be located either in the US or among allies and partners.The subsidies are intended to accelerate the pace at which new technologies become widely available and affordable, as well as create a new economy of “green jobs” in the US while reducing reliance on China. Aside from its ambition to scale up a domestic US green industry, Washington has one eye on its Paris Agreement climate commitments. An analysis by Rhodium Group, an independent research group, estimated the IRA could put the US on track to reduce greenhouse gas emissions by 31-44 per cent by 2030 against its 2005 levels, going some way towards the country’s 50-52 per cent Paris goal. This is compared with a much lower 24-35 per cent reduction without the legislation. The hope, says Paul Bledsoe, a former Clinton White House climate adviser, is that the tax incentives and public money will “unleash trillions of dollars in new private sector investment”. Why are companies excited? There are broadly two types of subsidy: for companies and for consumers. While most of the money is handed out through the US tax system, there are also some grants and loans in the mix. According to analysis by McKinsey, the bulk of the climate funding is slated for private companies, which will receive about $216bn of the tax credits.

David Richardson, the co-founder of Elephant Energy, leans on a condenser heat pump in Denver, US © AP

In addition, many of the consumer tax credits are increasing the potential customers for cleaner products. For example, a tax credit of up to $7,500 is available for buyers of electric or hydrogen-powered cars for anyone earning less than $150,000 a year. There are also tax credits available for making homes greener and upgrading appliances to more energy-efficient versions. One-off tax rebates of between $1,200 and $8,000 are available for homeowners to install energy-efficient heat pumps, and improve the insulation and electrification of their homes. Why the complaints from overseas?

Ford’s electric F-150 Lightning on the production line at its Rouge Electric Vehicle Center in Dearborn, Michigan © AFP/Getty Images

Washington is using the money to incentivise business to cut China out of the supply chain and boost US manufacturing. But that has implications elsewhere. For an electric car to be eligible for the full tax credit, it has to be made in North America, and specific percentages of its battery components and critical minerals have to be extracted or processed in the US or countries with a trade agreement with the US.The EU has set up a task force with the US to soften some of the impact of rules requiring North American sourcing. But a swath of electric vehicle and battery makers have already announced investments in the US as they anticipate demand for more affordable EVs from US buyers.Among them are large European companies. BMW announced a nearly $2bn investment in South Carolina late last year, for example, as it expands its existing plant and builds an additional battery plant nearby. Freyr announced a $1.7bn initial capital investment in Georgia late last year.Enel also announced it would build a solar photovoltaic cell and panel factory in the US.Since the IRA’s passage at least 20 new or expanded clean energy manufacturing plants have been announced in the US, according to the American Clean Power Association.How is Europe going to fight back?

Spain’s Prime Minister Pedro Sanchez, French President Emmanuel Macron, Portuguese Prime Minister Antonio Costa and President of the European Commission Ursula von der Leyen, at the Green Hydrogen Corridor Summit hosted by Barcelona and Marseille. © REUTERS

EU officials expect some concessions from the US in the area of EVs and batteries, but they accept the overall thrust of the US regime will not change. Accordingly, the EU is scrambling to make conditions on the continent more amenable to green investment. This will involve softening rules limiting public subsidies for green technologies, speeding up permits for new wind farms and solar panel arrays, and potentially mustering pools of cash to incentivise spending. European Commission officials contend that the union already has major sources of green investment on tap. EU capitals must devote some 37 per cent of their spending under the €800bn NextGenerationEU post-coronavirus pandemic recovery scheme to the green transition. In addition, about €100bn of the EU’s 2021-27 cohesion plan, which boosts regional development, is expected to be green spending. But business leaders complain that the EU programmes are laborious and time-consuming to access, especially compared with the simplicity of tapping into federal tax credits under the IRA. European Council President Charles Michel has called for existing EU funds to be deployed more quickly and for it to be easier to “rechannel” money to new priorities. But that is by no means easily achieved given the need to get buy-in from multiple institutions and nations. And while he and other EU officials vow to summon up fresh funding to counter the US handouts, they face opposition from frugal member states, among them Germany and the Netherlands. More