Economy

Good morning. Donald Trump said he backed the “immediate release” of documents related to this week’s FBI search on his Mar-a-Lago estate, just hours after attorney-general Merrick Garland moved to unseal the warrant and the list of items retrieved by federal agents.The former US president called for the papers to be made public in a statement issued just before midnight on Thursday, after huddling with his legal team to discuss the next steps in the legal stand-off pitting him against US law enforcement agencies.“Not only will I not oppose the release of documents related to the unAmerican, unwarranted and unnecessary raid and break-in of my home in Palm Beach, Florida, Mar-a-Lago, I am going a step further by ENCOURAGING the immediate release of those documents,” he wrote. “This unprecedented political weaponisation of law enforcement is inappropriate and highly unethical,” he added.Thanks for reading FirstFT Americas. Have a great weekend — Wai KwenFive more stories in the news1. Asset managers bet big on crypto despite market rout Big-name money managers are stampeding into digital assets, finding new ways to monetise investor interest even as trading volumes and prices for bitcoin and other cryptocurrencies have slumped.How well did you keep up with the news this week? Take our quiz.2. Colombia’s new president Gustavo Petro pushes tax reform to fund ambitious social agenda The country’s first leftist government in modern history has targeted Colombia’s wealthiest residents and its commodities exports in a tax proposal that represents a significant shift for the traditionally conservative nation.3. Miami becomes the new boom town for corporate lawyers Kirkland & Ellis is one of many law firms relocating to capitalise on a migration accelerated by the coronavirus pandemic. In the year to July 2021, more Americans moved to Florida than any other state — 220,890 of them, according to census data.4. GSK reassures shareholders over Zantac lawsuits The pharmaceutical company said the litigation it faced over withdrawn heartburn drug Zantac was inconsistent with the scientific consensus, as it attempted to reassure investors after a slide in its share price. GSK has been named as a defendant in about 3,000 filed personal injury cases in the US alleging that taking the drug led to cancer developing.5. TikTok employees complain of ‘kill list’ aimed at forcing out staff The viral video app company, owned by China’s ByteDance, created what staff have called a “kill list” of colleagues that it wanted to force out of its London office, in a move that some said created a working culture of fear.The days aheadInflation Reduction Act The bill is set to be passed in the US House of Representatives before being signed into law by President Joe Biden.Economic data Monthly industrial production figures for the EU are due, as are France’s final consumer price index data for July, which will give an insight into the extent of rising prices and energy costs.Global inflation tracker: See how your country compares on rising prices

Corporate results The New York-listed Italian luxury retailer Ermenegildo Zegna will report first-half earnings. Several luxury goods brands recently reported sustained consumer demand despite high inflation. Honest Company, the consumer goods business founded by US actress Jessica Alba, will report second-quarter earnings before the bell.What else we’re reading and listening toAfghanistan’s women speak Since the fall of Kabul to the Taliban in August last year, women across the country have had to find ways to cope with their lives being turned upside down. They have used an app to share their thoughts, fears and dreams. Read their messages here.“Although it is daylight, darkness has spread. For girls and women it is like 20 years ago” — Nargis, August 16, 2021, 02:09.

The Taliban said they would defend women’s rights ‘within the framework of Islamic law’, but analysts and diplomats remain deeply sceptical

Arctic melting four times faster than rest of the planet, study says Scientists have for a long time known that the Arctic is heating faster than the rest of the planet, but have not agreed on a rate. The warming effect, along with long-term declines in sea ice levels, are considered two major indicators of climate change.Rhine’s low water levels cause problems for German industry Following an unusually dry winter, a parched spring and a sweltering summer, water levels on the Rhine river have fallen to a record low — well below the 80cm required for fully loaded barges to pass through safely. As a result, container ships are carrying a fraction of their usual cargo, leading to higher transportation costs and severe delays.Russia’s diplomats are reduced to propagandists Once regarded as a sophisticated elite, foreign ministry officials are now using extreme language to prove their loyalty to the Kremlin. Their statements are increasingly targeted not at external audiences but at the domestic one, writes Alexander Baunov, a former Russian diplomat.My handwriting is terrible. Should I be worried? Years of typing and texting have taken their toll on Pilita Clark. “My words jerked across the page like the trails of a snail dunked in crystal meth,” she says. This could be important — studies show we learn more when we write by hand.Travel adventuresFind out where to get really away from it all, in Morocco, Chile, Lapland and New Zealand.An angling trip in the Martin Pescador wilderness © Eleven More

Moguls and investors from the tech industry, which endorses housing relief, banded together to object to a plan for multifamily homes near their estates in Atherton, Calif.SAN FRANCISCO — Tech industry titans have navigated a lot to get where they are today — the dot-com bust, the 2008 recession, a backlash against tech power, the pandemic. They have overcome boardroom showdowns, investor power struggles and regulatory land mines.But this summer, some of them encountered their most threatening opponent yet: multifamily townhouses.Their battle took place in one of Silicon Valley’s most exclusive and wealthiest towns: Atherton, Calif., a 4.9-square-mile enclave just north of Stanford University with a population of 7,500. There, tech chief executives and venture capitalists banded together over the specter that more than one home could exist on a single acre of land in the general vicinity of their estates.Their weapon? Strongly worded letters.Faced with the possibility of new construction, Rachel Whetstone, Netflix’s chief communications officer and an Atherton resident, wrote to the City Council and mayor that she was “very concerned” about traffic, tree removal, light and noise pollution, and school resources.Another local, Anthony Noto, chief executive of the financial technology company SoFi, and his wife, Kristin, wrote that robberies and larceny had already become so bad that many families, including his, had employed private security.Their neighbors Bruce Dunlevie, a founding partner at the investment firm Benchmark, and his wife, Elizabeth, said the developments were in conflict with Atherton’s Heritage Tree Ordinance, which regulates tree removal, and would create “a town that is no longer suburban in nature but urban, which is not why its residents moved there.”Other residents also objected: Andrew Wilson, chief executive of the video game maker Electronic Arts; Nikesh Arora, chief executive of Palo Alto Networks, a cybersecurity company; Ron Johnson, a former top executive at Apple; Omid Kordestani, a former top executive at Google; and Marc Andreessen, a prominent investor.All of them were fighting a plan to help Atherton comply with state requirements for housing. Every eight years, California cities must show state regulators that they have planned for new housing to meet the growth of their community. Atherton is on the hook to add 348 units.Many California towns, particularly ones with rich people, have fought higher-density housing plans in recent years, a trend that has become known as NIMBYism for “not in my backyard.” But Atherton’s situation stands out because of the extreme wealth of its denizens — the average home sale in 2020 was $7.9 million — and because tech leaders who live there have championed housing causes.The companies that made Atherton’s residents rich have donated huge sums to nonprofits to offset their impact on the local economy, including driving housing costs up. Some of the letter writers have even sat on the boards of charities aimed at addressing the region’s poverty and housing problems.Atherton residents have raised objections to the developments even though the town’s housing density is extremely low, housing advocates said.“Atherton talks about multifamily housing as if it was a Martian invasion or something,” said Jeremy Levine, a policy manager at the Housing Leadership Council of San Mateo County, a nonprofit that expressed support for the multifamily townhouse proposal.Read More About AppleSustained Growth: The tech giant reported a rise in sales of 2 percent for the three months that ended in June, though the company’s profits fell 10.6 percent.The End of a Partnership: Three years after Apple promised to continue working with Jony Ive, its former design leader, the two parties appear to be through. Here is what the change could mean for Apple.Union Effort: Apple employees at a Baltimore-area store voted to unionize, making it the first of the company’s 270-plus stores in the United States to do so.Upgrading: At its annual developer conference in June, Apple unveiled a range of new software features that expand the iPhone’s utility and add more opportunities for personalization.Atherton, which is a part of San Mateo County, has long been known for shying away from development. The town previously sued the state to stop a high-speed rail line from running through it and voted to shutter a train station.Its zoning rules do not allow for multifamily homes. But in June, the City Council proposed an “overlay” designating areas where nine townhouse developments could be built. The majority of the sites would have five or six units, with the largest having 40 units on five acres.That was when the outcry began. Some objectors offered creative ways to comply with the state’s requirements without building new housing. One technology executive suggested in his letter that Atherton try counting all the pool houses.Others spoke directly about their home values. Mr. Andreessen, the venture capitalist, and his wife, Laura Arrillaga-Andreessen, a scion of the real estate developer John Arrillaga, warned in a letter in June that more than one residence on a single acre of land “will MASSIVELY decrease our home values, the quality of life of ourselves and our neighbors and IMMENSELY increase the noise pollution and traffic.” The couple signed the letter with their address and an apparent reference to four properties they own on Atherton’s Tuscaloosa Avenue.The Atlantic reported earlier on the Andreessens’ letter.Mr. Andreessen has been a vocal proponent of building all kinds of things, including housing in the Bay Area. In a 2020 essay, he bemoaned the lack of housing built in the United States, calling out San Francisco’s “crazily skyrocketing housing prices.”“We should have gleaming skyscrapers and spectacular living environments in all our best cities,” he wrote. “Where are they?”Other venture capital investors who live in Atherton and oppose the townhouses include Aydin Senkut, an investor with Felicis Ventures; Gary Swart, an investor at Polaris Partners; Norm Fogelsong, an investor at IVP; Greg Stanger, an investor at Iconiq; and Tim Draper, an investor at Draper Associates.The mayor of Atherton said the townhouse plan wouldn’t have met California’s definition of affordable housing.Jim Wilson/The New York TimesMany of the largest tech companies have donated money toward addressing the Bay Area’s housing crisis in recent years. Meta, the company formerly known as Facebook, where Mr. Andreessen is a member of the board of directors, has committed $1 billion toward the problem. Google pledged $1 billion. Apple topped them both with a $2.5 billion pledge. Netflix made grants to Enterprise Community Partners, a housing nonprofit. Mr. Arora of Palo Alto Networks was on the board of Tipping Point, a nonprofit focused on fighting poverty in the Bay Area.Mr. Senkut said he was upset because he felt that Atherton’s townhouses proposal had been done in a sneaky way without input from the community. He said the potential for increased traffic had made him concerned about the safety of his children.“If you’re going to have to do something, ask the neighborhood what they want,” he said.Mr. Draper, Mr. Johnson and representatives for Mr. Andreessen, Mr. Arora and Mr. Wilson of Electronic Arts declined to comment. The other letter writers did not respond to requests for comment.The volume of responses led Atherton’s City Council to remove the townhouse portion from its plan in July. On Aug. 2, it instead proposed a program to encourage residents to rent out accessory dwelling units on their properties, to allow people to subdivide properties and to potentially build housing for teachers on school property.“Atherton is indeed different,” the proposal declared. Despite the town’s “perceived affluent nature,” the plan said, it is a “cash-poor” town with few people who are considered at risk for housing.Rick DeGolia, Atherton’s mayor, said the issue with the townhouses was that they would not have fit the state’s definition of affordable housing, since land in Atherton costs $8 million an acre. One developer told him that the units could go for at least $4 million each.“Everybody who buys into Atherton spent a huge amount of money to get in,” he said. “They’re very concerned about their privacy — that’s for sure. But there’s a different focus to get affordable housing, and that’s what I’m focused on.”Atherton’s new plan needs approval by California’s Department of Housing and Community Development. Cities that don’t comply with the state’s requirements for new housing to meet community growth face fines, or California could usurp local land-use authority.Ralph Robinson, an assistant planner at Good City, the consulting firm that Atherton hired to create the housing proposal, said the state had rejected the vast majority of initial proposals in recent times.“We’re very aware of that,” he said. “We’re aware we’ll get this feedback, and we may have to revisit some things in the fall.”Mr. Robinson has seen similar situations play out across Northern California. The key difference with Atherton, though, is its wealth, which attracts attention and interest, not all of it positive.“People are less sympathetic,” he said. More

To circumvent legal objections, the new law will provide aid to farmers who have faced discrimination, regardless of their race.WASHINGTON — A $4 billion program to help Black and other “socially disadvantaged” farmers that never got off the ground last year amid legal objections will be replaced with a plan to make relief funds available to farmers who have faced discrimination.The changes, which are tucked into the climate and tax legislation that is known as the Inflation Reduction Act of 2022, are drawing backlash from the farmers whom the original debt relief program, part of the $1.9 trillion American Rescue Plan of 2021, was intended to help. The new program is the latest twist in an 18-month stretch that has underscored the challenges facing the Biden administration’s attempts to make racial equity a centerpiece of its economic agenda.Black farmers have been in limbo for months, not knowing if the debt relief they were promised would be granted. Many invested in new equipment after applying last year for money to help defray their debt. Some received foreclosure notices from the Department of Agriculture this year as the program languished.The legislation, which passed the Senate this week and is expected to pass the House on Friday, would create two new funds to help farmers. One, at $2.2 billion, would provide financial assistance to farmers, ranchers and forest landowners who faced discrimination before 2021. The other would provide $3.1 billion for the Agriculture Department to make payments for loans or loan modifications to farmers who faced financial distress.The money would replace the $4 billion program that was intended to aid about 15,000 farmers who received loans from the federal government or had bank loans guaranteed by the Agriculture Department. They included farmers and ranchers who had been subject to racial or ethnic prejudice, including those who are Black, American Indian/Alaskan Native, Asian American, Pacific Islander or Hispanic.Last year’s pandemic relief package included an additional $1 billion for outreach to farmers and ranchers of color and for improving their access to land.White farmers and groups representing them questioned whether the government could base debt relief on race and said the law discriminated against them. The program was frozen as lawsuits worked their way through the courts.The program also faced resistance from banks, which argued that their profits would suffer if the loans they had made to farmers were suddenly repaid.Fearful that the program would be blocked entirely, Democrats rewrote the law to remove race from the eligibility requirements. It is not clear how discrimination will be defined, and the legislation appears to give the Agriculture Department broad discretion to distribute the money as it sees fit.Groups representing Black farmers, who have faced decades of discrimination from banks and the federal government, are disappointed that the money will no longer be reserved specifically for them.What’s in the Climate, Health and Tax BillCard 1 of 8What’s in the Climate, Health and Tax BillA new proposal. More

For viewers, one of the joys of Netflix has been the ability to gorge on hours of top-class TV without ever encountering an ad. Now, the streaming giant is introducing a new subscription tier that runs adverts alongside its shows — albeit at a lower price point. The U-turn on something that had been anathema is the latest sign that the economics of the on-demand app industry are becoming stretched. The instant gratification once dished out by streaming, ride-sharing and delivery services may become not only less instant, but also less gratifying.In recent years, Netflix, Uber, Deliveroo and the like have spoiled customers. From original, binge-worthy (and ad-free) dramas at a click, to rapid taxi shuttles and a buffet of global cuisines delivered right to the doorstep — all at minimal expense. In a period in which real wage growth stagnated, low-cost apps made us all feel better off.A decade of cheap cash also stoked an investor boom in the on-demand economy, which subsidised content, rides, and deliveries at below cost prices to drum up demand. Investors betted the strategy would eventually garner large market shares, far outweighing the early losses.With interest rates rising, investor cash and optimism are dwindling. Providing slick services at unbeatable prices is much harder. Prices need to go up, costs need to fall, and new revenue streams need to be found to keep investors engaged. Hence the quest for advertising revenues by Netflix, Disney Plus and other streamers. Uber’s road to profit (after over a decade of losses) has in part been paved by rides becoming more expensive.Higher living costs also make the on-demand business harder. Consumer appetite is under strain, putting pressure on subscriptions. The boost provided by the pandemic, when people were locked down and barred from restaurants and cinemas, has passed. Netflix amassed over 36mn subscribers in 2020, but holding on to them, and attracting more, is harder. A cache of TV shows and fast takeaways seem more like a luxury as inflation erodes real spending power, as reflected by Deliveroo’s widening losses in the first half of 2022.The money thrown into the convenience economy has also created a crowded marketplace. Couch potatoes can choose between Netflix, Amazon Prime, Disney Plus and others, and a glut of ultrafast delivery and takeout services; ride-seekers can switch between Uber, Lyft and Bolt. Streamers are starting to drip-feed episodes, to prevent consumers from devouring entire series then quickly cancelling direct debits. Competition would generally be expected to boost quality across the industry, but it also means more user time wasted screening various apps, and potentially multiple subscription bills.Regulation is kicking in, too. A UK Supreme Court ruling last year means Uber’s drivers are now considered workers, with the added costs of minimum wage, pensions, and holiday pay. Similar rulings elsewhere are increasing pressure on gig-economy companies to raise pay and benefits for workers. Competition for drivers between ride-sharing apps also portends higher wage, and ultimately price, pressures — not to mention longer waiting times.When cost of living pressures finally ease, consumers may once again be willing to pay higher prices and reopen closed subscriptions. Meanwhile, consolidation, casualties, and bundling could yet change dynamics in the industry. Either way, the multiyear summer of cheap and easy consumer convenience looks for now to be a thing of the past. It was good while it lasted. More

Colombia’s first leftist government in modern history has targeted the country’s wealthiest residents and its commodities exports in a tax proposal that represents a significant shift for the traditionally conservative nation.The proposed tax overhaul “should not be viewed as a punishment or a sacrifice”, Gustavo Petro, the country’s new president, said during his inauguration speech on Sunday, a day before sending the bill to Congress. “It is simply a solidarity payment that someone fortunate makes to a society that has enabled them to generate wealth.”Some analysts described the proposed reforms as more pragmatic and less radical than feared when Petro was elected. However, they worry the reform may not be enough to tackle the fiscal deficit while funding the ambitious social programmes that he promised on the campaign trial. The bill, announced on the first day of Petro’s government, seeks to raise an additional $5.8bn next year, about 1.7 per cent of gross domestic product. It projects an average of 1.4 per cent in annual new revenues for the next 10 years after that.The proposal includes a tax increase for those making more than $2,300 a month — Colombia’s top 2.4 per cent, according to its finance ministry. It would also introduce an annual wealth tax on savings and property above $630,000.The bill sent to Congress includes a 10 per cent levy on exports of oil, coal and gold when their prices are above an international reference of $48 per barrel for oil, $87 per tonne for coal and $400 per troy ounce of gold. The price of benchmark US crude oil is currently $94 per barrel, Colombian coal is averaging about $140 per tonne, and the price of gold is about $1,700 per ounce.Oil and coal are Colombia’s top two exports, valued in 2019 at $12.9bn and $4.8bn, respectively, while gold exports totalled $1.6bn. A dividend tax on overseas investors who own shares in Colombian companies would double from 10 per cent to 20 per cent.The additional streams of revenue are crucial to funding the generational change the president has promised voters. During his campaign, Petro, a guerrilla fighter in his youth, pledged to halt opencast mining and new oil and gas exploration contracts alongside a number of progressive reforms, such as funding universal healthcare and higher education and supporting wholesale land and pension reform.A failure to deliver risks quickly angering his supporters, tens of thousands of whom took to the streets last year, initially to protest a tax reform proposal that would have raised VAT.“As we say in Colombia, ‘campaigns are poetry but government is prose’, and the economic and fiscal reality is complicated,” said Luis Fernando Mejía, the executive director of Fedesarrollo, a Colombian economic think- tank.The proposal comes as the Colombian economy faces headwinds. The fiscal deficit this year is projected to reach nearly 5.6 points of GDP and must be adjusted downwards by two points of GDP next year according to the pre-existing fiscal rule. Prices are rising quickly as the country emerges from the coronavirus pandemic — annual inflation is 10.2 per cent, the highest since 1999, while close to 40 per cent of people live in monetary poverty.“Part of this reform will be allocated to reducing the fiscal deficit,” Mejía said. “Another part will go to spending, in line with the social programmes that the government has discussed.”The country’s tax revenue is about 19 per cent of GDP, but just 5 per cent of the population paying personal taxes, according to the OECD. The average for OECD countries is 33 per cent.Petro’s Yale-educated finance minister, José Antonio Ocampo, has pledged to tackle tax evasion and avoidance, saying that revenues would be increased by modernising Colombia’s collection agency. Over half of Colombia’s workforce is estimated to be in the informal economy.Despite the challenges, some economists said that the reform bill could be a model for other progressive governments who have praised its proposed increase in capital gains taxes.

“In Colombia, the truth is that we have never had a reform that was focused on making the people who have the most pay,” said María Fernanda Valdés, co-ordinator of economic affairs at Friedrich Ebert Stiftung, a political foundation. “Almost always the attempt was made to make the middle class pay, such as by increasing [value added tax]. If it passes, it could be the first of a wave of similar reforms in Latin America.”The bill requires approval by Congress, where Petro has a majority coalition made up of centrists from traditional parties as well as leftist outsiders. It is still likely to be amended by lawmakers. Many of Colombia’s powerful business associations had on Wednesday yet to make formal statements about the proposed reforms. But certain provisions, such as a tax on sugary drinks, processed foods and single-use plastics, are likely to worry them. Erica Fraga, senior analyst for Latin America and the Caribbean at the Economist Intelligence Unit, a think-tank, said that the presentation of a “reasonable” tax reform on Petro’s first day in office showed an attempt to secure quick wins in Congress.“However, Mr Petro’s pragmatism will also force him to accept the dilution of his radical agenda,” leading to tension between his leftist allies and traditional parties, Fraga said. “The risk of political turbulence and social unrest when his honeymoon period with both Congress and voters ends remains high.” More

Rising geopolitical tension, high inflation and a cyclical downturn in chip demand have triggered “some panic” in the chip industry, the chief of China’s largest semiconductor maker has warned, in comments that follow a week of Chinese military exercises near Taiwan.The overlap of factors that include the threat of “regional conflict overseas” had “brought some panic to the industry and led to an extreme quick freeze reaction in some parts of the supply chain” with customers abruptly cancelling orders, Zhao Haijun, Semiconductor Manufacturing International Corporation’s chief executive, said on Friday. Zhao did not mention Taiwan, but analysts said the remark highlights the risk geopolitical tension poses to an industry already shaken by the impact of the Ukraine war. Zhao’s remarks come a day after ex-Arm chief Tudor Brown resigned from the SMIC board, saying that “the international divide has further widened”. China’s military said on Wednesday that the exercises it conducted around Taiwan in retaliation for a visit by US House of Representatives Speaker Nancy Pelosi were complete, but added that it would continue regular patrols in the area.Analysts believe that a further escalation in tensions, especially Chinese military activity that frequently interferes with the island’s air and shipping traffic, could disrupt global chip supply chains.Taiwan Semiconductor Manufacturing Company accounts for more than half of the world’s made-to-order chips and for about 90 per cent of the global supply of the most advanced chips.A hot conflict would also increase the likelihood of Washington further toughening sanctions against Chinese technology companies. In December 2020, the US Department of Commerce added SMIC to its “entity list” after months of regulatory scrutiny of the chipmaker. The entity list is an export blacklist of foreign businesses for which US companies need to obtain licences in order to sell them technology. Zhao said demand had slowed the most for chips used in smartphones and consumer electronics. Chinese smartphone vendor sales dropped by half in the first six months of the year, he said. “We see many orders stopped,” Zhao added.SMIC reported a 3.3 per cent increase in revenue to $1.8bn and a 15 per cent jump in net earnings to $447mn in the second quarter over the previous three months.It forecast growth to slow to about 1 per cent in the current quarter, but said its gross margin, now at 39.4 per cent, would not be significantly affected.SMIC’s Shanghai-listed stock was down nearly 1 per cent on Friday and 18.7 per cent year-to-date.

Zhao said demand for chips used in industrial controllers, automotive applications and high-end connectivity remained strong and stable, and supply shortages in these segments persisted. Demand in the Chinese market was also expected to buffer the weakness elsewhere for SMIC, he said.Mark Li, an analyst at Bernstein, said the semiconductor market correction was doing less damage to SMIC than feared.While growth in average selling prices of the company’s chips sharply slowed to 1 per cent from 9 per cent in the previous quarter, the strong profit margins suggested that “the correction is more gradual and benign than expected”, Li wrote in a research note. More

In Paldiski, Estonia, abandoned Soviet-era bunkers, splattered with graffiti and overgrown with weeds, are a reminder of the centuries-long domination that Russia once exerted over the Baltic region.Now this port city in the northwestern corner of the country is hastily being turned into a bulwark against Russian efforts to politically pressure Europe. Ever since Moscow threatened to withhold natural gas as retribution for countries opposed to its invasion of Ukraine, workers in Paldiski have been constructing an offshore terminal for non-Russian gas at a round-the-clock pace.The project is one piece of Europe’s strategy to quickly wean itself off the Russian energy that is heating homes and powering factories across the continent.The Estonian terminal will serve as a floating dock for a gargantuan processing tanker that will receive deliveries of liquefied natural gas and convert it back into a vapor that can be piped through the existing network that serves the Baltics and Finland. With a scheduled finish date in November, Paldiski is on route to be the first new L.N.G. terminal completed in Europe since the war started.Shipping natural gas in a liquefied form has become Europe’s eureka solution to what the European Commission has labeled “energy blackmail” by President Vladimir V. Putin of Russia. Since the fighting began in late February, 18 new facilities or expansions of existing ones have been proposed in 11 European countries, including Germany, the Netherlands, Italy and Greece, according to Rystad Energy.The L.N.G. project in Paldiski is one of 18 proposed or under expansion in Europe since Russia attacked Ukraine.Marta Giaccone for The New York TimesGiant beams were installed with a floating crane.Marta Giaccone for The New York TimesEuropean leaders have been traveling to the Middle East and Africa — including to some countries previously held at arm’s length because of human rights abuses — to compete for the world’s limited L.N.G. supply or plead for the rapid development of additional sources. Until the war, China, South Korea and Japan were the biggest customers.“L.N.G. is really the only supply element that is able to step up for the coming years” during the transition to more climate-friendly renewable energy sources, said James Huckstepp, head of European gas analysis at S&P Global Commodity Insights.Although the United States and Qatar, the biggest producers of L.N.G., are ramping up operations, it will take at least a couple of years to significantly increase capacity. So businesses and households are bracing for high prices and painful shortages during the cold winter months. Governments have drawn up emergency plans to cut consumption and ration energy amid dark warnings of social unrest.Marti Haal, the founder and chairman of the Estonia energy group Alexela, shakes his head at the feverish race to construct liquefied natural gas terminals. He and his brother, Heiti, proposed building one more than a dozen years ago, arguing that it was dangerous for any country to be solely dependent on Russia for natural gas.“If you would talk with anyone in Estonia in 2009 and 2010, they would call me and my brother idiots for pursuing that,” Mr. Haal said. He was driving his limited-edition Bullitt Mustang, No. 694, in Steve McQueen green, to the site of the terminal in Paldiski that his company is now building. He slowed down to point out the border of a restricted zone that existed before the Soviet Army left in 1994. When Moscow was in control, Paldiski was emptied of its population, turned into a nuclear training center and surrounded by barbed wire.The facility was met with shrugs when it was first proposed over a decade ago. Now construction is on a frenzied pace.Marta Giaccone for The New York TimesAs he drove on, Mr. Haal recalled the debate over building an L.N.G. receiving station: “Everybody we talked to said, ‘Why do we need diversification?’” After all, gas had been reliably arriving through Russian pipelines since the 1950s.Today the brothers are looking more like visionaries. “If at the time, they would have listened to us, we wouldn’t have to run like crazy now to solve the problem,” Mr. Haal said.Mr. Haal, who spent that morning competing in a regatta, always had an entrepreneurial streak — even under Communism. In 1989, as the Soviet Union was dissolving, he and his brother started building and selling car trailers. Mr. Haal said he would drag one on board the ferry to Finland — the fare to bring it by car was too expensive — and deliver it to a buyer at the Helsinki port. He collected the cash and then returned to pay everyone’s salary.When they started selling gas, they named the company Alexela — a palindrome — so that they would have to erect only one sign that could be read by drivers in both directions.Their L.N.G. venture at one point looked like a failure. As it turns out, the millions of dollars and years of frustration meant that when Estonia and Finland agreed in April to share the cost of renting an L.N.G. processing vessel and build floating terminals, the preliminary research and development was already done.In the months leading up to Russia’s invasion, Mr. Haal said, soaring gas prices had already begun to change the economics of investing in an L.N.G. terminal. Now, his major concern is ensuring that the Estonian government completes the pipeline connection to the national gas network on time.Over the years, the question of building more L.N.G. facilities — in addition to the two dozen or so already in Europe — has been repeatedly debated in ports and capitals. Opponents argued that shipping the chilled, liquefied natural gas was much more expensive than the flow from Russia. The required new infrastructure of port terminals and pipes aroused local opposition. And there was resistance to investing so much money in a fossil fuel that climate agreements had eventually targeted for extinction.One of the countries saying no was Europe’s largest economy, Germany, which was getting 55 percent of its gas from Russia.“The general overview was that Europe had more L.N.G. capacity than it needs,” said Nina Howell, a partner at the law firm King and Spalding. After the invasion, projects that had not been considered commercially viable, “and probably wouldn’t have made it, then suddenly got government support.”The first layer of reinforced concrete structure.Marta Giaccone for The New York TimesConcrete line pressure pipes.Marta Giaccone for The New York TimesEstonia, which shares a 183-mile border with Russia, is actually the European country least dependent on its gas. Roughly three-quarters of Estonia’s energy supply comes from domestically produced oil shale, giving it more independence but putting it behind on climate goals.Still, like the other former Soviet republics Lithuania and Latvia, as well as former Communist bloc countries like Poland, Estonia was always more wary of Russia’s power plays.Two days before the war started, the Estonian prime minister chided “countries which don’t border Russia” for not thinking through the risks of depending on Russian energy.By contrast, Poland moved to quit itself of Russian natural gas and began work in 2013 on a pipeline that will deliver supplies from Norway. It is scheduled to be completed in October. Lithuania — which at one point had received 100 percent of its supply through a single pipeline from the Russian monopoly Gazprom — went ahead and completed its own small L.N.G. terminal in 2014, the year that Russia annexed Crimea.Liquefied natural gas terminals are not the only energy source that European countries once disdained and are now compelled to explore. In a hotly disputed decision, the European Parliament last month reclassified some gas and nuclear power as “green.” The Netherlands is re-examining fracking. And Germany is refiring coal plants and even rethinking its determined rejection of nuclear energy.In Paldiski, enormous wind turbines are along the coast of the Pakri peninsula. On this day, gusts were strong enough not only to spin the blades but also to halt work on the floating terminal. A giant tracked excavator was parked on the sand. At the end of a long skeletal pier, the tops of 200-foot-long steel pipes that had been slammed into the seabed poked up through the water like a skyline of rust-colored chimney stacks.Paldiski Bay, which is ice-free year-round and has direct access to the Baltic Sea, has always been an important commercial and strategic gateway. Generations before the Soviets parked their nuclear submarines there; the Russian czar Peter the Great built a military fortress and port there in the 18th century.Now, the bay is again playing a similar role — only this time not for Russia.Remains of a Soviet-era bunker. The region that will boost the energy security of the Baltics was used as a nuclear training site when Moscow was in charge.Marta Giaccone for The New York Times More

When I started working as a tax adviser over 20 years ago, the theme of “tax” would generally have grabbed the public’s attention for a few days around the Budget, only to be quickly superseded by other concerns. Fast forward to 2022 and the race to become the next prime minister has turned into the “great tax debate”. It is being fought in the shadow of rapid inflation, the worst cost of living crisis in a generation and the country’s tax burden riding at its highest level for 70 years.Ten of the original 11 Conservative party leadership candidates led their campaigns with pledges around tax. Rishi Sunak, the former chancellor, was the clear outlier, ruling out tax cuts until the public finances improve and inflation comes under control. Now the final two contenders — Sunak and Liz Truss — offer the complete spectrum on tax policy. Which candidate offers the best choice for the country and how will their plans — as far as we can tell — affect our finances?Truss says she will cut taxes “from day one” to reignite growth, with a series of proposals that add up to around £40bn. First, she will cut fuel duty by more than the 5p per litre reduction already in place and temporarily suspend the green energy levy to help with rising energy costs.In a slight against her opponent, the foreign secretary also pledges an immediate reversal of the former chancellor’s 1.25 per cent national insurance (NI) increase (the health and social care levy) and promises to cancel a planned increase in corporation tax to 25 per cent from April 2023. She has also said she wants to support working families by generously enhancing the transferable marriage allowance to the level of the personal allowance.Sunak, who began his campaign in a more frugal tone, now offers a temporary cut in VAT for household energy and a promise to cut the basic rate of income tax to 16 per cent, though this would not come into play until 2029. He has also pointed to his final announcements as chancellor — the increase in the NI threshold in July and his promise to reduce the basic rate of income tax to 19 per cent in April 2024 — measures costing a combined £33bn.What do these plans mean for money in our pockets? Details are sketchy on many pledges — and liable to daily change — but Sunak’s commitment to cut the basic rate of income tax will be worth up to £377 a year for all workers compared with the current tax year. Under Truss’s proposals to the transferable marriage allowance, a basic rate taxpayer could be significantly better off with a tax break worth up to £2,644 a year. She also offers universal tax benefits, with higher earners benefiting from a tax cut of over £2,000 compared with the current tax year — largely driven by the reversal of the 1.25 per cent NI increase.Sunak’s headline-grabbing 4 per cent basic rate income tax cut will be worth up to £1,508 a year, but you will have to wait seven years to see that benefit. But is this just smoke and mirrors from Sunak’s team? Compared with the 2020-21 tax year, when he became chancellor, someone earning £50,000 will only be £276 better off — hardly worth the seven-year wait.So Truss appears the clear winner when it comes to putting money quickly back into people’s hands, albeit at a £9bn additional cost compared with her rival. However, I have some important caveats.

Any changes cast as “emergency measures” are likely to be scaled back at some point. On the reversal of the NI rise, it is hard to see any politician putting this through for higher-rate taxpayers — anyone earning over £50,270. Furthermore, it remains unclear whether employers will benefit from the reversal: with employers’ NI now standing at 15.05 per cent, this would spell bad news for businesses facing difficult trading months ahead. Another problem also emerges from the timing of the reversal. If carried out immediately, as Truss promises, it would mean three different NI regimes applying this tax year, bringing inevitable problems with PAYE codes and yo-yo effects on people’s monthly net pay. Would HM Revenue & Customs’ systems be able to cope? And will employers be able to apply the right tax deductions?Tax aside, why has neither candidate put forward an increase to the personal tax allowances and thresholds in line with inflation? Sunak’s stealth move in his 2021 Budget to freeze these until April 2026 has been compounded by inflation. If he wishes to do “the right thing”, he should be leading with a promise to allow these limits to increase with inflation.Few of the candidates’ pledges are likely to remain intact on their impact with economic reality. When it comes to electoral promises, I am still waiting to see Boris Johnson’s pledge to increase the basic rate threshold to £80,000, set out in the Conservative party’s 2019 election manifesto.So who is right? I don’t really know what to believe — and I’ll only believe it when I see it.Nimesh Shah is chief executive of Blick Rothenberg. More