Economy

Billionaire investor Ken Griffin has warned there will be a recession in the US and said the Federal Reserve needs to do more to bring down inflation, days after the central bank increased its benchmark rate by 0.75 percentage points for the third time in a row. “Everybody likes to forecast recessions and there will be one,” he said at CNBC’s Delivering Alpha conference in New York on Wednesday. “It’s just a question of when, and frankly, how hard.” A recession could happen as soon as next year, he added. The founder of hedge fund Citadel and market maker Citadel Securities said increasing interest rates was an “awkward tool” to cool the economy but acknowledged the Fed is limited in what it can do to curb inflation. Griffin joins a growing chorus of voices predicting pain for the US economy, including Fed chair Jay Powell who last week said there was not a “painless way” to bring inflation under control.Despite the gloomy outlook, Griffin said the Fed needed to stick with its campaign to tighten monetary policy. “We should continue on the path that we’re on to make sure that we re-anchor inflation expectations,” he said, so people do not start to treat inflation of 5 or 6 per cent as the norm. Earlier in the day, Stanley Druckenmiller, a veteran of the hedge fund industry, adopted an even gloomier stance. “We are in deep trouble,” he said, adding that he would be “stunned” if the US does not tip into a recession next year. Griffin drew a distinction between the US and Europe, which he believes could already be in a recession because of high gas prices. He said former president Donald Trump had tried to wean the continent off of its dependency on Russian oil. “Europe was willing to trust Russia as its fundamental provider of energy,” Griffin said. “In fact when it came to Nord Stream the whole point that president Trump had about ‘no to Nord Stream’ was trying to reduce European dependency upon the Russians for energy. And guess what? [He] was right.”Griffin’s hedge fund has been among the best performing in the industry this year, with the flagship multi-strategy Wellington fund up more than 28 per cent so far in 2022, according to a source familiar with the firm. More

Lebanon is to re-peg its currency for the first time in 25 years, slashing its value against the dollar, in an effort that will meet the IMF’s demand that the peg moves closer to the black market value and help restore confidence in the financial system.Lebanon’s currency has been pegged to the US dollar since 1997 at a rate fixed by the central bank of 1,507 Lebanese pounds to the dollar. The new rate of 15,000 to dollar will come into effect on November 1, a statement from the finance ministry said. The rate of the pound on the black market on Wednesday evening was 38,500 pounds to the dollar.Since the start of the country’s financial meltdown in October 2019, the currency has unravelled, losing more than 95 per cent of its value. Wednesday’s move is a step towards unifying the country’s various exchange rates, finance minister Youssef Khalil told Reuters.“Today, Lebanon has entered a new phase and is no longer using an official US dollar exchange that makes no sense. Now we have one that is useful, based on which you can steer the economy toward a better situation.”The crisis, which the World Bank has called one of the world’s worst economic crises of the past 150 years, has left the majority of people locked out of their deposits and more than three-quarters of the population in poverty.The collapse in the currency has badly affected depositors, most of whom have been unable to access their dollar savings or been forced to make withdrawals in pounds at punishingly low rates.Although the government reached a draft funding agreement with the IMF in April, the deal was contingent upon implementing divisive economic and political reforms, which have yet to be agreed. Unifying the exchange rates is one of the IMF’s key prerequisites to unlock the $3bn loan facility. Following a staff visit to Beirut last week, IMF officials said the Mediterranean nation’s leaders had been “very slow” to enact the changes.“Despite the urgency for action to address Lebanon’s deep economic and social crisis, progress in implementing the reforms agreed under the April [staff level agreement] remains very slow,” the fund said. “In particular, the majority of prior actions have not been implemented.”Authorities have resisted finalising a recovery plan that would go towards addressing the $72bn of losses in the financial system.Government officials are holding discussions with banks and depositors on over how the decision will be applied. The goal would be to help the private sector on an orderly transition to the new exchange rate, a statement from the ministry said.Many Lebanese blame the financial sector and the central bank for the crisis. Last month, the World Bank published a report accusing Lebanon’s authorities of operating a giant Ponzi scheme that had caused “unprecedented social and economic pain”.The report said public finances were used to capture the state’s resources for political patronage, creating a “deliberate” depression, adding that a significant portion of people’s savings had been “misused and misspent over the past 30 years”. More

Tens of thousands gathered in the Czech capital for the second such protest in a month, spurred by an energy crisis and rising prices that are affecting countries across Europe.PRAGUE — Thousands of protesters flocked into Prague’s Wenceslas Square on Wednesday, demanding the resignation of the government of the Czech Republic as an energy crisis stoked popular unrest that will be closely watched in other European capitals.Despite a rain-soaked start, demonstrators hoisting Czech flags and chanting, “Shame! Shame!” turned out for the second time in a month to rally under the slogan “Czech Republic First.” They were a hodgepodge of figures with a broad range of causes, including Kremlin sympathizers and those who said they are fighting a “global elite.”But many at the protest were there to express their concern about soaring prices and energy costs as winter loomed, with the Czech Republic one of the first countries in Europe to face such large protests over the issues.Many protesters linked their economic woes to the European Union’s tough sanctions on Russia after its invasion of Ukraine — repeating a line propagated by the Kremlin, which is advancing the narrative that E.U. sanctions against Russia are to blame for inflation and other financial troubles on the continent.E.U. leaders counter that their sanctions against Russia are not causing energy prices to surge, but rather Russia’s weaponization of its gas supplies. Russia’s decision to cut the gas supply to E.U. countries in response to their support of Ukraine has sent already high electricity prices — caused by pandemic-era distortions — skyrocketing. And while individual E.U. countries might take some measures tailored to each’s particular energy mix at home, the most effective intervention to stop the spiraling electricity costs will come at the collective level, analysts say. E.U. energy ministers are meeting in Brussels on Friday to assess, and most likely finalize, a set of new policies that will aim to support households and businesses, and tax profits from energy firms. Many of the protesters in Prague linked their economic woes to the European Union’s tough sanctions on Russia’s invasion of Ukraine.Martin Divisek/EPA, via ShutterstockBut the E.U. efforts are viewed skeptically among protesters in Prague, the Czech capital, where some raised E.U. flags crossed with red Xs, while others raised the flags of the Czech Communist Party and far-right factions. The odd mix, spanning the extremes of the political spectrum, was spearheaded by Ladislav Vrabel, who brands himself as a populist leader seeking to force the resignation of the government and push for a deal with Russia for cheap gas.“It is the duty of the Czech government to ensure the security of its citizens and their economic stability,” he said before the protests. “Our government is bringing us to the edge of war and economic collapse.”The landlocked Czech Republic was particularly reliant on Russian gas and oil brought in through neighboring countries, even receiving E.U. exemptions from sanctions against Russia.Mr. Vrabel’s first protest, on Sept. 3, took the government by surprise when more than 70,000 people marched on Wenceslas Square, the iconic gathering point of the Czech capital where hundreds of thousands gathered in 1989 to oust the communist government. It appeared to be a surprise even to Mr. Vrabel himself — he initially registered the rally for 500 people, according to City Council records.“It has been a wake-up call, and I hope it has been a wake-up call for others across Europe,” said Tomas Pojar, an adviser to the Czech prime minister, Petr Fiala.Smaller protests have emerged in Germany, with thousands gathering in recent days in the eastern state of Mecklenburg-Vorpommern to demand that Berlin open the recently completed gas pipeline from Russia, Nord Stream 2. The pipeline was ruptured this week in what European officials said appeared to be a deliberate attack.Similar to the protests against coronavirus pandemic restrictions that hit Europe in 2021, the demonstrations in the Czech Republic and Germany are drawing an unlikely pairing of right- and left-wing groups, as well as anti-vaccine and fringe conspiracy figures. And similar to those pandemic protests, analysts worry that radical groups will try to use the rallies to make inroads into the broader population.After the first Czech protest this month, Prime Minister Petr Fiala’s government offered a price cap on electricity prices for citizens.Virginia Mayo/Associated PressMatthias Quent, a German expert on far-right extremism, said that some disgruntled citizens might believe the far-right groups’ protests were their only outlet.“They may think they have no other place to express their displeasure,” he said.The far right is having a resurgence across Europe. This week, the Brothers of Italy party won the largest share of votes in Italian elections. And in Sweden, a group founded by neo-Nazis and skinheads looks set to become the largest party in the next government.In Germany, the far-right Alternative for Germany, known by its German acronym AfD, has risen to about 15 percent in public polls and is planning protests in Berlin next month.“People are not even using heating yet — that is still to come,” said Mr. Quent. “And, nevertheless, the AfD already had a visible upswing. This is, indeed, the scenario I have feared.”In the Prague protest, many who joined bristled at the idea of being called fringe or far right.“It’s not only energy prices rising — grocery prices, too. I am raising my granddaughter, and I am worried,” said Miroslav Kusmirek, who came from a town 30 miles outside the capital to protest on a rainy afternoon. “I see companies now struggling and I worry; if the company that employs me collapses, so will I.”As he spoke, a speaker onstage from Germany’s AfD, Christine Anderson, was shouting to loud cheers, “You no longer live in a democracy!”For energy experts, the populist surge adds yet another knot in the tangle of problems Europe is grappling with. On top of Russia’s cutting gas, France’s nuclear plants have been at half capacity because of maintenance issues, and a severe drought has hampered Germany’s ability to import coal over the summer.Supporters of Giorgia Meloni’s Brother of Italy party celebrating the victory of the right-wing coalition in Rome on Monday.Gianni Cipriano for The New York TimesSimone Tagliapietra, an energy expert at Bruegel, a European research group, said that, in a worst-case scenario, some countries could find themselves facing a “vicious cycle” of popular discontent that pushes for populist responses that could stoke rivalries among European states. In that scenario, he said, countries could stop trading electricity.“If countries are to close down their energy borders, what you have is flaring political tensions between European countries,” he said. “That becomes very, very risky because we can really compromise European unity. Countries could start to fight about all other political issues.”Although that is still far from the current reality, he said, a false report suggesting that France might stop sending electricity to Italy sparked outrage among Italians and illustrated the sensitivity of the situation. “That’s just a preview of what could happen,” he said.In the wake of the first Czech protest this month, Prime Minister Fiala’s government offered a price cap on electricity prices for its citizens, but the protests on Wednesday show that it has yet to ease economic anxieties.Czech electricity trading prices have more than doubled compared with last year’s, according to some analysts. About 10 percent to 15 percent of households have been hit badly, according to research by the STEM Institute for Empirical Research in Prague, which advises the government. The middle class is also starting to feel the pinch, it said, with its disposable income falling by 50 percent compared with last year’s.Claudia Trantina, 27, was one such protester on Wednesday, driving an hour from her home city, Plzen, to protest in Prague. “I can’t provide my daughter with the things I had as a kid,” she said. “It’s not like I can’t pay the bills, but I can’t do things like take her to the zoo or restaurants.”What has confused analysts is that anxieties are at a higher level than during the recession in 2008, when economic indicators were worse, said Nikola Horejs, the STEM research director.“The mood is tense, but this mood is much worse than the actual situation, which is something that confuses the government and it confuses economists,” he said.Many experts say that part of what causes discontent is European leaders’ failure to find the right messaging on the energy crisis.“We need a kind of wartime mobilization,” said Mr. Tagliapietra. “Not exactly like Churchill — but something of that sort. The leadership needs to tell people: Look, this is a war. An economic war has been launched against us by Russia.”In Prague, officials say they have been trying to send that message, but are wary of provoking anger or fear.“If the subject comes up day after day and it is scaremongered, it will not have a positive effect,” said Petr Tresnak, a deputy minister of industry and trade. “You need an informed public, but you don’t want to cause panic.”The protest in Prague on Wednesday was the second such demonstration in a month.Martin Divisek/EPA, via ShutterstockMatina Stevis-Gridneff More

The Bank of England went into full financial crisis mode on Wednesday, rushing out an announcement that the central bank was restarting its money printing presses at “whatever scale is necessary”, and later confirming it was planning up to £65bn of new quantitative easing. Ministers have tried saying recent financial turbulence was global, but no one in the markets doubted the UK’s problems were the result of £45bn of unfunded tax cuts in chancellor Kwasi Kwarteng’s “mini” Budget last Friday. The plunge in sterling’s value against the US dollar and spike in government bond yields since Kwarteng’s fiscal statement has thrown prime minister Liz Truss’s economic policy into acute difficulties, and the BoE’s latest QE move raised further questions. Throughout her campaign for the Conservative party leadership, Truss blamed the BoE’s post-financial crisis QE programme — which involved printing money to purchase £875bn of government bonds to boost the economy — for causing inflation.“Some of the inflation has been caused by increases in the money supply,” Truss said in July, but by September, her government had authorised the BoE to fire up the money printing presses again. The BoE said the purpose of its latest purchase of long-dated government bonds was to restore financial stability rather than boost inflation. The central bank sought to prevent an artificial spike in yields on gilts with 20-year-plus maturities, which threatened the solvency of pension funds.But analysts have expressed concern at how Kwarteng and the BoE appear to be pulling in opposite directions — through the chancellor’s unfunded tax cuts to boost demand and the central bank’s moves to raise interest rates to curb high inflation. Paul Hollingsworth, economist at BNP Paribas, said: “It is hard to appear co-ordinated when fiscal policy has its foot on the accelerator and monetary policy on the brake.” The BoE’s position has been further complicated by how its latest government bond buying move is taking place at the same time as it is seeking to also tighten monetary policy, partly through sales of gilts accumulated under its post-2009 QE programme. The new government bond buying leaves the central bank open to accusations that it is fuelling inflation.Bethany Payne, bond portfolio manager at Janus Henderson Investors, said: “The Bank of England are generously offering to buy long-dated gilts starting today. That’s a complete flip on their announcement on Thursday last week where they confirmed sales of gilts would go ahead, starting Monday October 3.”With these contradictions undermining the credibility of UK economic policy, the big question is what comes next.The BoE was adamant on Wednesday it would stick to its current timetable for interest rate decisions, with the next meeting of the central bank’s Monetary Policy Committee scheduled for November 3. Gerard Lyons, chief economic strategist at Netwealth, who has been informally advising Truss, said that if it possibly could, the BoE “should avoid inter-meeting decisions” on rates.This avoided a sense of panic, and calibrating the scale of rate rises in an emergency MPC meeting would be difficult, he added. The BoE also stressed it wanted to exit its latest money printing effort quickly: by October 14. It said the asset purchases would be “strictly time limited” although BoE officials also noted that keeping the intervention temporary rested on a “signalling effect” working.

Once financial markets could see the scale of intervention the BoE was undertaking, central bank officials expected the turbulence would subside and buyers of long-dated government bonds would return even if yields remained much higher than in recent weeks. Kallum Pickering, economist at Berenberg Bank, said the BoE message was “don’t fight a central bank in its own currency” because you might lose a lot of money.According to many economists, however, the BoE’s deeper problem was that by bailing out ministers, the central bank appeared willing to print money to finance government, something it had previously pledged never to do because it was inflationary. They described the process as “fiscal dominance” because the Treasury would be calling the shots with the result that inflation could get out of control. Allan Monks, economist at JPMorgan, said: “The optics are not favourable for the bank and will inevitably prompt discussions about fiscal dominance and a monetary financing of the [budget] deficit.”“Bringing back bond purchases in the name of market functioning is potentially justified; however, this policy action also raises the spectre of monetary financing which may add to market sensitivity and force a change of approach,” said Robert Gilhooly, a senior economist at Abrdn.Over at the Treasury, Kwarteng, who is scheduled to give a keynote speech at the Conservative party conference on Monday, continued to come under pressure to spell out how his unfunded tax cuts could coexist with sustainable public finances. The IMF on Tuesday launched a stinging attack on Kwarteng’s tax cuts, and urged the government to “re-evaluate” the plan because the “untargeted” measures threatened to stoke soaring inflation.David Page, head of macro research at Axa Investment Managers, said: “Clearly, the latest government policies to ignore economic realities are politically very damaging, but they are also proving economically damaging.” He added that the chancellor had, until his speech next week, “an opportunity to about-turn [on his mini-Budget tax cuts and a] refusal to change course is likely to exacerbate the pressures in UK financial markets and increase the longer-term economic damage.”Truss and Kwarteng have so far refused to countenance a U-turn. While reversing course on the chancellor’s tax cuts would be favoured by financial markets, the IMF and some Conservative MPs, it seems the least likely path right now. More

Good eveningTensions between Europe and Russia over gas supplies intensified today as alleged sabotage of undersea pipelines led to warnings of a “new level of hybrid warfare” over energy.Norway — now the biggest gas exporter to the EU — and Denmark stepped up security around oil and gas infrastructure after what the Danish prime minister Mette Frederiksen called “deliberate acts” against the two Nord Stream pipelines off the island of Bornholm yesterday.Politicians were quick to blame Russia but Moscow has denied any involvement: here’s what we know so far.The incident comes as fears grow across Europe over winter energy supplies and the economic impact of surging prices. Today Slovakia’s premier told the FT that electricity costs had left his country’s economy at risk of “collapse” as he called for billions of euros of support from Brussels.The question of who should pay for this support is also becoming a hot topic. The European Central Bank’s chief economist said yesterday that eurozone governments should tax the rich to help those hit hardest. Some economists think the cost of government support will lead to greater inflation, forcing them to increase interest rates even faster. New data on Friday is expected show that eurozone inflation hit a record 9.7 per cent in September.Friday is also the day EU energy ministers meet to discuss Brussels’ plan to raise €140bn from a levy on excess energy profits to help consumers and businesses cope with bill shocks. Some 15 states have signed a letter calling for a cap on all wholesale prices, whether from Russia or elsewhere. Plans for windfall taxes are already in place in several member states as well as in non-member countries such as the UK and Norway, which today announced plans to raise $3bn from electricity companies and fish farmers. The incident in international waters however brings the focus squarely back on to the political impact of the crisis and Russia’s “weaponisation” of energy supplies. EU policymakers will no doubt take heed of last week’s warning from the head of the International Energy Agency, that failure to maintain a united front in the scramble for energy supplies could shatter EU unity and even spark social unrest.Watch our film: How Putin held Europe hostage over energyLatest newsFed official backs fourth straight 0.75 point rate rise in NovemberUS pending home sales decline for third consecutive monthUK spy chief warns of more aggressive Russian cyber attacksFor up-to-the-minute news updates, visit our live blogNeed to know: the economyThe Bank of England made a £65bn intervention to try to stem the crisis in government debt markets following last Friday’s package of tax cuts, which has drawn stinging criticism from the IMF as well as the government’s own MPs.Economics editor Chris Giles tackles the big question: is the UK now in a full-blown crisis? (And if you’re still unsure about the significance of the sterling situation, we have the perfect explainer for you).Latest for the UK and EuropeEuropean Central Bank policymakers backed an interest rate rise of 0.75 percentage points next month ahead of a further move in December to a level that no longer stimulates economic growth. “Our primary objective is price stability and we have to deliver on that,” said ECB chief Christine Lagarde.The US is putting pressure on EU members to speed up financial aid for Ukraine. Separately, the IMF is looking at bolstering immediate assistance to Kyiv while working towards a full-fledged lending programme.Fears that Turkey could be used by Moscow to circumvent US sanctions eased after three Turkish state banks halted the use of Mir, the Russian version of Mastercard or Visa, following pressure from Washington. Global latestThe $24tn US Treasury market is in the middle of a “volatility vortex” as big swings in international bonds and currencies and worries over US rate rises spook investors. Alphaville editor Robin Wigglesworth says this will mean tightening financial conditions for everyone on the planet. Who will get chomped on first?Chief economics commentator Martin Wolf details how the rising dollar is affecting the rest of the global economy. “Messing up one’s macroeconomic policies, especially fiscal management, proves particularly dangerous when the dollar is strong, interest rates are rising and investors seek safety,” he says. “Kwasi Kwarteng [UK chancellor], please note.”Chinese economic growth will fall behind the rest of Asia for the first time since 1990, according to the World Bank, which revised down its forecast for GDP growth to 2.8 per cent from earlier estimates of 4 to 5 per cent. The renminbi has fallen to the lowest level since 2008 as China’s central bank holds back from intervening to prop up the currency in response to the surging dollar.Our Big Read explains how an “information vacuum” is making analysis of Beijing’s policy by foreigners ever harder.

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Need to know: businessVirgin Atlantic said the UK government needed to make “difficult decisions” to lift the ailing pound. The falling currency means higher costs for many big UK companies: here’s our sector-by-sector analysis. The British Business Bank, the state-backed economic development investor, sounded the alarm for the country’s small businesses, hit by rising interest rates, high inflation and supply chain disruption. Fashion retailer Boohoo said the darkening economic outlook would hit this year’s sales and profits. Shares in Porsche begin trading in Frankfurt tomorrow but can the German luxury car brand thrive in a bear market brought on by the energy crisis, the war in Ukraine and the threat of coronavirus lockdowns in China? Chinese carmaker Nio warned that the energy situation was hampering its mission to take on European manufacturersLego, the world’s largest toymaker, said it was confident of growing market share this year, even as rising costs meant first-half operating profits remained flat at DKr7.9bn ($1.0bn).China is set to overtake the US as the world’s biggest oil refiner in the next couple of years, but, as the Lex column points out, this will happen just as electric vehicles come into their own. The country has the world’s biggest electric car market, accounting for nearly 60 per cent of global sales.The World of WorkNow we know that most coronavirus infections are spread through the air, what can companies do to ensure a Covid-free workplace? Read more and help us find Britain’s healthiest workplace in the new season of FT Health at Work.Without investment in health, social care and childcare, the UK government is unlikely to achieve its goal of getting inactive workers back into the labour market, argues columnist Sarah O’Connor. “I lose money every single time I leave my house.” One of the downsides of the US back-to-the-office-push is the soaring cost of transport, food and childcare.Many workers feel under pressure and undervalued, especially after their experiences during the pandemic. But what about those people looking artfully busy but doing little actual work? Listen to our latest Working It podcast.Get the latest worldwide picture with our vaccine trackerSome good news…From clean energy trends and the quest to end polio to fixing fertility rates and connecting the world through internet access, here are five data stories to cheer you up. More

The president of the Atlanta branch of the Federal Reserve has backed a fourth consecutive 0.75 percentage point rate rise at the next policy meeting in November, while urging the US central bank to be “mindful” of geopolitical and economic turbulence abroad.The comments from Raphael Bostic come as the UK has become engulfed in a financial crisis after the government said it planned to implement £45bn of debt-funded tax cuts. The announcement, which has drawn sharp criticism from the IMF and other prominent policymakers, prompted the Bank of England on Wednesday to intervene in the government bond market.Bostic said the Fed needed to be “mindful” of international developments but added that the US economy and financial system were well fortified.“The US economy still has a considerable amount of momentum,” he told reporters, adding that the US is less susceptible to “contagion” because of its economic strength. Given the strength of the US economy and persistent high inflation, he said his “baseline” is for the central bank to deliver another 0.75 percentage point rate increase at the next gathering of the Federal Open Market Committee in November, followed by a half-point adjustment in December. That would bring the federal funds rate from its current level of 3 per cent to 3.25 per cent to a new target range of 4.25 per cent to 4.5 per cent.

“I’m just going to have that as a starting point and let the data and the reality take me where they will,” Bostic said.When asked about how the Fed will calibrate policy to avoid overtightening, he said he would look at a broad range of metrics beyond the inflation rate, which is a lagging indicator.“My expectation is that the actual inflation number will be the last thing to move and that we will start to see the imbalances narrow in advance of seeing inflation move down in a meaningful way,” Bostic added.Jay Powell, Fed chair, has maintained that reducing inflation will require a sustained period of “below trend” growth and higher unemployment. Most officials see the unemployment rate rising to 4.4 per cent as growth slows to 0.2 per cent this year and settles at 1.2 per cent next year, although many economists say those estimates are still too optimistic. More

Italy really has given Europe’s political scientists something to chew over by electing a government of not just one or two populists but a three-party coalition including varying flavours of far and hard right. The power-seasoned League led by Matteo Salvini and the ideologically more moderate Forza Italia under Silvio Berlusconi have now become junior partners, with Brothers of Italy under Giorgia Meloni the leader of the trio.This is obviously a dark turn of events in a continent where the political centre has been fighting hard to maintain liberal democracy, human rights and the rule of law. The most salient impact is likely to be on the management of centrally disbursed EU funds, which are supposed to support the rule of law. Whenever there are populists in government there’s always the possibility of a Donald Trump-type view of trade and globalisation, turning inwards at the member-state or the EU-wide level. But the recent experience of populism in Europe, including in Italy, is that Euroscepticism tends to moderate when in office. And even nationalist governments dismissive of liberal constitutional norms are often relatively open to international economic engagement.Brothers of Italy is frequently labelled “post-fascist”, a tradition rooted in the Italian Social Movement, a postwar party set up by admirers of Benito Mussolini. But the party’s stated platform, although deeply unpleasant about immigration, is a long way from being inspired by Mussolini’s autarkic state-led economic model.Yes, the party is often keen on government intervention in industry and suspicious of foreign investors, and Meloni has said she wants the Italian state to buy a controlling stake in Telecom Italia. But state involvement in utilities is not exactly unheard of in Europe: unlike Emmanuel Macron, Meloni has said she doesn’t want to nationalise energy production. More broadly, she has said that she wants Italy to fight harder for its interests within the EU, not to destroy or fracture it.Like the League, Brothers of Italy also draws a lot of votes from the well-off areas of northern Italy, home to a network of efficient export-oriented companies. They may be concerned about competition from China along with taxes and energy prices, and welcome judicious state support, but they are unlikely to see heavy-duty protectionism as the answer.The previous experience of populist government in Italy, the coalition between the League and the Five Star Movement between 2018 and 2019, revealed scepticism but not destructiveness on trade issues.There was a moment of drama when the administration threatened to knife the EU’s bilateral Ceta trade deal with Canada. But it turned out the government actually wanted more Italian product names protected in the Canadian market under the “geographical indications” part of the deal, a reassuringly familiar export-oriented demand. Italy still hasn’t ratified Ceta, but then neither has France. The deal is already in effect through being “provisionally applied” and it’s unlikely that will ever be undone.Elsewhere in the EU, even populists who profess affection for autocrats and protectionists have often gone along with the mainstream of EU trade policy. Fans of open trade were concerned after the rightwing populist vote increased in elections to the European Parliament in 2014 and 2019. In the event, many of those MEPs (though not particularly the Italians) have been relatively keen on supporting trade deals.A highly effective constraint on populist subversion of EU internal market or trade policy is the lack of rival poles of economic activity to orient around. The most obvious example, Viktor Orbán in Hungary, has consistently indicated his openness to influence from Moscow as well as his affection for the economically nationalist Trump. But Hungary’s economic centre of gravity very clearly remains in the EU: it’s been called an “Audi-ocracy” for the influence of component manufacturers supplying Germany’s car industry, which is itself oriented to global exports. Even before the Russian economy was crushed by sanctions over Ukraine, Vladimir Putin’s Eurasian Economic Union was a pitiful alternative to the EU, a small rabble of economically backward Russian satellite states. Sometimes the likes of Orbán make some gesture about defying EU conventions. One was his government’s gleeful announcement of support for the former UK minister and Brexit supporter Liam Fox in his doomed attempt to become the World Trade Organization’s director-general in 2020. Fox’s campaign made much of this breach of EU solidarity, but in the event Hungary meekly went along with the EU consensus to support another candidate.None of this diminishes the danger of having one of the EU’s largest member states governed by parties from such a destructive tradition. But for those worried the Italian elections will undermine EU liberalism, the new government’s attitude to the single market and global trade is unlikely to be among their worst [email protected] More

NEW DELHI (Reuters) -Tata Motors launched India’s lowest priced electric car at a little over $10,000 on Wednesday as the country’s only electric vehicle (EV) maker looks to draw in more buyers.Tata leads India’s EV market, helped by government subsidies and high tariffs on imports.Its move comes as domestic rival Mahindra & Mahindra is in talks with investors to raise up to $500 million for its EV unit and plans to launch its first electric sport-utility vehicle (SUV) in January.Tata’s Tiago EV, an electric version of its popular Tiago hatchback, will have a sticker price starting from 849,000 rupees ($10,370). The bulk of cars sold in India, the world’s fourth-largest car market, are priced below $15,000.That is much cheaper than India’s next most affordable EV – the electric version of Tata’s Tigor compact sedan which starts at around $14,940. China, however, has some EV models that start as low as 32,800 yuan ($4,525).The Tiago EV’s operating cost is expected to be about a seventh of the gasoline version, making it a “compelling proposition”, said Shailesh Chandra, managing director of Tata Motors (NYSE:TTM) Passenger Vehicles and its EV subsidiary.”We are not chasing to be the lowest cost,” said Chandra, adding the aim was to pack in connected car features and other advanced technologies while keeping the price accessible.Chandra said the car’s “disruptive” pricing would open new opportunities and markets for Tata in smaller towns and cities, where buyers tend to be more price-conscious.Tata, India’s third-largest carmaker, last year raised $1 billion from TPG for its EV unit at a $9.1 billion valuation, and has outlined plans to launch 10 electric models by March 2026. India’s car market is tiny compared to its population, with electric models making up just 1% of total car sales of about 3 million a year, but the government wants to grow this to 30% by 2030.The cheapest version of the Tiago EV – Tata’s third electric car – will have a driving range of 250 kilometres (155 miles) on a single charge, while a more expensive version will offer a range of 315 km. Chandra said data from existing Tata EV owners showed average daily use of about 50 km, which prompted the company to provide a shorter driving range to keep the price down.”There’s always a challenge of how we strike the right price,” Chandra said, adding the current sticker price was only for the first 10,000 buyers. More