Economy

Europe’s largest economy went into reverse in the last three months of 2021 as its large industrial sector was hit by supply snags.These were now easing but the rapid spread of the Omicron variant was affecting services and employment in general. “Unlike in previous waves of the pandemic it is not just activity in the services sector that is likely affected by containment measures and behavioural changes,” Germany’s central bank wrote in a monthly report.”Instead, pandemic-related absence from work is likely to dampen economic activity markedly also in other sectors.”The Bundesbank said German industry was providing “a positive impulse” to the economy thanks to easing supply bottlenecks and high demand, setting the stage for a rebound in the spring if the pandemic subsided. More

Hello Swamp Things. It’s winter break for many on the East Coast, and I am writing this note from 38,000 feet, on a United flight en route to Jackson Hole where I am sneaking away from the family for a few days of skiing with my best gal pal. My flight was significantly delayed, not because of weather but because the airline, which is under tremendous financial pressure, decided to outsource the catering to an independent company which took a full 90 minutes to get a few bags of ice on to the plane. As one flight attendant told me, “it’s just a total mess” dealing with outside contractors who may be cheaper but are certainly not better. Why do I mention this? Because I’m thinking deeply these days about the compromises that we have made over the past 40 years of neoliberal market capitalism, chief among them being a total focus on consumer prices to the detriment of everything else. This is a topic I explore in my latest column. I’m also thinking about the consequences of those compromises. They include, but are by no means limited to, an increasing distrust of elites, the break-up of the old US-led world order, rising inflation, and a power vacuum that’s being filled by China. That’s the topic of a really excellent long-form essay in Foreign Affairs by Michael Beckley, a professor of political science at Tufts University. The piece, “Enemies of My Enemy”, argues that from the 1960s onwards, the west focused too much on free markets and not enough on free societies. Capitalism itself became the foreign policy of the US, but as we know, the bet that the world would become freer as it became richer hit a roadblock with the rise of China. Beckley argues that the opportunity now is for a new liberal order (led by the US) to focus on democracy, rather than capitalism. That’s basically what President Joe Biden is trying to do, but it’s a messy business, because it involves bringing together groups with quite varied interests. The EU isn’t crazy about US market dominance. India wants to hang on to its own brand of nationalism. America’s own politics make it hard to sell anything new at home. Asian nations such as Japan and South Korea have to play nicely in their regional sandbox since they are so close to China. Still, Beckley cites a number of good historical examples showing that strong liberal orders generally result from a group of varied nations coming together in opposition to something — a country or an ideology. The end of the Soviet Empire was, in a funny way, a bad thing for liberal democracy in that it deprived the west of a polar opposite around which its own system could be shaped and tended. A new source on my personal reading list, Bill O’Grady, the chief market strategist for Confluence Investment Management, would agree. He has written a terrific series on the history of American hegemony and where the world might be headed. His take is that with the collapse of communism, the west and the US in particular stopped being a constant gardener to capitalism. Markets became too tilted towards capital, and the public is now revolting.“I believe that Charles Kindleberger was essentially right concerning his theory on hegemonic stability,” he told me in an email exchange about the breakdown of American hegemony. “A superpower has two jobs; stabilise world security by preventing regional rivalries from becoming hot wars, which includes securing global trade routes, and providing the reserve currency. That means one has a global military and must be open to persistent current account deficits. The top 10 per cent of the population benefit greatly from these two factors. Due to global stability, they can auction their services on a global stage and outsource labour where it is cheapest. And the military projection is mostly provided by the bottom 90 per cent. The bottom 90 per cent have had enough. They don’t want free trade because it costs them jobs, and they don’t want to fight inconsequential wars overseas that leave them harmed for little personal benefit.”I’d agree with that totally. The jury is out about whether we are heading towards a new bipolar order, led by the US and involving other nations that fear China’s growing influence (Beckley’s bet), or a tripolar world that will be much more of a power free-for-all, in which the strong do what they can and the weak what they must (O’Grady’s view). Peter, do you have a view on that? I’m also curious about what will replace neoliberal economic theory, a topic that some important philanthropists and scholars are beginning to tackle (see a piece in The New York Times on their efforts). I suspect it will involve much more thought about the political economy (not just markets) and also more consideration of large-scale social and cultural values rather than mathematical calculations of individual rationality.​Personally, I also hope it will mean rethinking the kind of capitalism that leaves exhausted flight attendants being required to chop up ice cubes that have melted and refrozen into giant blocks during 90-minute delays. And all this due to cheaper outside contractors because of a system that forces us to nickel and dime each other. Recommended readingIt’s not reading, but viewing — check out this new HBO documentary about Carl Icahn, in which I am a talking head. The take is a bit too rosy in terms of Carl’s impact, but it’s a very entertaining look at a larger-than-life figure in modern capitalism.The saga of the 15-year-old Russian figure skater Kamila Valieva who fell apart in her long programme after her doping scandal is really heartbreaking. I used to be a competitive ice skater in an era in which quadruple jumps were nearly unheard of even for men. Now you can’t win a female competition without doing multiple quads, which means you have to have a prepubescent body to compete. Not good for the sport or the kids.My favourite cartoonist, Roz Chast, nails the ennui of the moment.Peter Spiegel repliesI don’t know if it’s my innate optimism or naive, middle-aged nostalgia, but if you force me to choose, Rana, then I’m going to continue to bet on a US-led liberal order over a multipolar free-for-all. If Michael Beckley believes that kind of “alliance of democracies” can only develop if it is arrayed against an autocratic China, then so be it.It’s fair to say that four years of Trumpism shook my faith in the primacy of liberal democratic values and in American leadership on the global stage. You and I both came of age in the 1980s, a decade that started with a seemingly invulnerable Eastern bloc and ended with that hegemon disintegrating with barely a whimper. Watching those events unfold in real time leaves an impression — that individuals are innately predisposed to be free, and that American leadership can (and should) be the midwife of those freedoms.But Donald Trump rejected those principles, and a whole lot of Americans seem to support him despite (because of?) that. You could almost feel the world make a collective recalculation: if the US was no longer going to be the reliable provider of global public goods — safe shipping lanes, a stable reserve currency, a nuclear umbrella — then it was every nation for itself. We appeared to be on the brink of Bill O’Grady’s free-for-all.I like to think Americans — and the world — looked into that abyss and pulled back. That kind of “might makes right” balance-of-power geopolitics produced a half-century of European and Asian soil soaked with the blood of young soldiers.Where I disagree with Beckley is his claim that postwar American-led hegemony was primarily about exporting neoliberal capitalism. It is true that the US foreign policy establishment felt that free markets helped bring about a world order that fostered free minds and free people. But I think it would be hard to find a consensus that free markets were the end goal, rather than the means to an end.Some on the Reaganite right might have seen capitalism as a guiding construct, but they were hardly unopposed. From Dean Acheson and John Foster Dulles to Brent Scowcroft and Madeleine Albright, the overwhelming, bipartisan organising principle of postwar American foreign policy was the promotion of democratic values and human rights. Let’s hope that, in a post-Trump world, those values are “what comes next”.Edward Luce is on book leave and will return in mid-March.Your feedbackAnd now a word from our Swampians . ..In response to ‘If Putin blinks, does Biden win?’:“Is Putin blinking or winking? And is Biden winking back? A successful show of strength would benefit both, while actual conflict would not. If it were spun to Russians that Ukraine would remain beyond Nato’s pale, and to Americans that Putin ‘backed down’ from his armour-rattling, both presidents could take a bow to their domestic audiences. Europe would remain confused.” — Brantly Womack, Charlottesville, Virginia“Both of you refer to Ukraine as a small country. Certainly in economic terms, but not in physical size. It was once the breadbasket of Russia. Something about Americans caring more about China’s economic juggernaut and not Russia’s or Putin’s imperial ambitions strikes hollow. I hate mentioning the domino theory that was so prominent in the 1950s, but will Putin stop in Ukraine, or does he fear Poland to the point of waiting everyone out to reach that objective?” — Duane Young, Mount Prospect, Illinois More

(Reuters) – Following are some excerpts taken from Singapore’s 2022 budget proposals announced by Finance Minister Lawrence Wong to parliament on Friday.For a full story, seeSUPPORT PACKAGES – “There are segments of the economy still struggling. I will therefore provide targeted help for our workers and businesses in these sectors through a S$500 million ($372.61 million) jobs and business support package.” – “I recognise the immediate concerns of businesses and households and will provide significant additional support … these amount to a significant package of S$560 million to help Singaporeans with their utility bills, children’s education, and daily essentials.”SPENDING AND REVENUE- “On the expenditure side, our needs are significant and growing. By 2030 we expect government expenditures to increase to more than 20% of GDP. Most of this increase in spending will go to healthcare.”- “We will set aside S$6 billion to maintain a multi layer public health defence. This is necessary for us to respond nimbly and confidently to the evolving COVID-19 situation.” – “On the revenue side we would not have enough to cover additional spending needs… This is why we will make significant enhancements in our tax system in this budget.” WEALTH TAXES- “Wealth taxes are therefore needed to build a fairer society where everyone can aspire to succeed, regardless of their backgrounds … Ideally, we would want to tax the net wealth of individuals. But such a tax is not easy to implement.”- “I will increase the property tax rates or non owner-occupied residential properties which includes investment properties. For such properties, I will increase the property tax rates from 10 to 20% … to 12 to 36% of all non owner-occupied residential properties.- “When fully implemented, they will raise our property tax revenue by about $380 million a year.”- “I will also tax luxury cars at a higher rate to make our vehicle tax system more progressive. I will introduce an additional ARF (additional registration fee) tier for cars at a rate of 220% for the portion of open market value in excess of $80,000.” GOODS AND SERVICES TAX “I also understand the concern that Singaporeans have about the GST increase taking place at the same time as rising prices. I have therefore decided to delay the GST increase to 2023 and to stagger the increase over two steps. The first increase will take place on first January 2023, from 7 to 8%. And the second increase on first January 2024, from 8 to 9%.” CORPORATE AND INCOME TAXES”I will therefore increase the top marginal personal income tax, or PIT rate, with effect from the year of assessment 2024. For the portion of chargeable income in excess of $500,000 up to $1 million will be taxed at 23%, while that in excess of $1 million will be taxed at 24% both up from 22% today. This increase is expected to affect the top 1.2% of personal income taxpayers and will raise $170 million of additional tax revenue per year.-“Our corporate tax system will need to be updated due to global tax developments.””What this means is that if such an MNE (multinational enterprise) were to have an effective tax rate of less than 15% in Singapore at the group level, other jurisdictions such as its home jurisdiction can collect the difference up to 15%.””We will adjust our tax system in response … We are exploring a top-up tax called the Minimum Effective Tax Rate, or METR. The METR will top up the MNE group’ss effective tax ratein Singapore to 15%.”INVESTMENT AREAS- “This budget will set up the key changes we must make to invest in new capabilities we must take to invest in new capabilities, advance our green transition, review and strengthen our social compact and develop a faired and more resilient structure.”- “We will also invest in future technologies like 6G, to ride the next communications and connectivity wave.” – “Alongside infrastructure improvements I will set aside an additional S$200 million offer the next few years to enhance schemes and build digital capabilities in our businesses and workers.”FOREIGN EMPLOYMENT AND WAGES- “Let me emphasise that Singapore will continue to stay open and welcome talent from around the world. The adjustments in our foreign worker policies apply mainly to the broad middle of the workforce.” – “We will update the framework for employment pass (EP) holders… From September this year the minimum qualifying salary for new EP applicants will be raise from the current S$4,500 to S$5,000. For the financial sector, which has a higher salary norms, this will be raised from the current S$5,000 to S$5,500.”- “We will refine how we assess EP applications to improve the complementarily and diversity of our foreign workforce and also to increase certainty and transparency of businesses.”- “All of us, businesses, consumers and taxpayers will have to do our part and contribute to uplifting our lower wage workers. I recognise that some firms may need time to adjust … Others may find it difficult to raise prices in the short term to support the wage increases.”- “I would therefore introduce the Progressive Wage Credit Scheme, or PWCS, to provide transitional support for businesses.” – “Under the PWCS, the government will co-fund the wage increases of lower wage workers between 2022 and 2026. For workers earning up to S$2,500 the PWCS co-funding rate will be 50% in the first two years 30% In the next two years before tapering to 15% in 2026.” – “We will spend an average of S$1.8 billion per year over the next five years or $9 billion in total for the PWCS and the enhanced Workfare… It is a significant increase and it reflects our shared commitment to uplift our lower wage workers.”GREEN COMMITMENTS- “We believe we can bring forward our net zero timeline. We will therefore raise our ambition to achieve net zero emissions by or around mid-century.”- “The path towards net zero will entail significant economic restructuring and changes in how we live and work in the future. Everyone …will face difficulty choices. Costly investments may be required.” – “We aim to issue $35 billion in green bonds by 2030 to fund public sector green infrastructure. This will include bonds issued by the government as well as statutory boards.” – “To move decisively to achieve our new net-zero ambition. You will need a higher carbon tax. I will therefore raise our carbon tax to $25 per tonne in 2024 and 2025 and $45 per tonne in 2026 and 2027 with a view to reaching 50 to $80 per tonne by 2030. The current tax of $5 per tonne remain will remain unchanged until 2023.”($1 = 1.3419 Singapore dollars) More

HONG KONG/SHANGHAI (Reuters) -Shares and international bonds of Zhenro Properties slumped further on Monday after it said existing internal resources might be insufficient to repay debt due in March.The comment was contrary to a previous commitment to redeem a $200 million perpetual bond due on March 5 and raises fresh concerns over liquidity at the Shanghai-based developer and among its peers.Zhenro’s Hong Kong-listed shares plunged more than 13% to a record low HK$0.75 versus a 1.1% drop for the Hang Seng Mainland Properties Index.Its dollar bond due Aug. 3 traded at 15.871 cents on the dollar, compared with 20.345 on Friday. Zhenro said in a filing late on Friday that its internal funds available for debt servicing have become increasingly limited since the announcement it made on Jan 4 about the redemption, citing adverse market conditions. Zhenro, China’s 30th-biggest property developer by sales, added that it is asking holders of the perpetual bond to waive claims against the company if it defaults and is offering to pay $17.50 per $1,000 principal amount if bondholders consent. Fitch downgraded Zhenro’s long-term issuer default rating to C from B after the consent solicitation, which it views as a distressed debt exchange. If it is approved, Fitch said it will make a further downgrade to “restricted default”.Fellow ratings agency Moody’s (NYSE:MCO) also lowered Zhenro’s rating to Caa2 from B3, reflecting heightened default risk.”Zhenro had provided inconsistent debt repayment plans to the market over the past two months, which raises concerns over the company’s financial strategy and risk management,” Moody’s said in a statement. Zhenro has another $50 million dollar bond due on March 6, Refinitiv data shows, while the amount of total international bonds outstanding is $3.65 billion.Its onshore September 2024 exchange-traded bond, however, jumped more than 22% when the market opened on Monday, triggering an automatic suspension, though only one trade was recorded.Zhenro’s shares and bonds first took a hit on Feb. 11 after reports that it had plans to restructure its dollar bonds. The company issued a statement on Feb. 14 calling the reports “untrue and fictitious” and said it reserved the right to pursue legal action. “Zhenro’s proposal is highly disappointing and akin to a distressed restructuring, as it gives perpetual holders lower compensation compared to the original terms,” said Leonard Law, senior credit analyst at Lucror Analytics. More

The amount of extra money to be distributed by advanced countries to developing nations struggling under the financial impact of the coronavirus pandemic has fallen short of expectations, after the G20 group of large economies reported combined pledges of $60bn.The amount, to be dispersed through the voluntary channelling of special drawing rights, does not match the $100bn set as a “global ambition” by the G20 last year. And it is less than a quarter of the $290bn given to members of the G7 group of advanced economies last August in the IMF’s $650bn allocation of its SDRs. The pledges were revealed after a meeting of G20 finance ministers and central bank governors in Jakarta that ended last week. World leaders have called repeatedly for SDRs given to rich countries to be channelled to poor countries in greater need. But so far, according to an internal G20 document seen by the Financial Times, just 13 countries have pledged $10bn of their SDRs to be lent to low-income countries through the IMF’s Poverty Reduction and Growth Trust, and a further $50bn through a yet-to-be-established Resilience and Sustainability Trust for low-income and vulnerable middle-income countries.“This is a great start but is nowhere near as much as the G20 could pledge in SDRs,” said Simon Quijano-Evans of Gemcorp Capital Management, an asset manager that lends to African governments and companies. “Sub-Saharan Africa in particular has been waiting for this,” he added. “The G20 should stop thinking so much and just do it.”SDRs are a form of reserve asset that are the equivalent of newly minted money, which can be allocated by the IMF at times of global financial stress. They are given as grants rather than loans and carry none of the policy conditions usually attached to IMF lending. They are allocated to each of the IMF’s 190 member countries roughly in line with their share in the global economy. About $275bn of the $650bn allocation made last August went to emerging and developing economies, of which just $21bn went to low-income countries.In its statement the G20 said it would continue to work towards its $100bn target and called on the IMF to set up the Resilience and Sustainability Trust before the IMF and World Bank spring meetings in April.According to the internal document, the biggest pledges so far have been made by the US, with $21bn, and China, with $14bn. Italy, France and the UK have each pledged between $4bn and $5.6bn. Critics say channelling SDRs as loans through the IMF’s trusts will reduce their impact as they will have be repaid, even if at low or zero rates of interest, and may oblige governments to take measures to balance their budgets through taxation or spending cuts at a time of economic difficulty.Many poor countries are struggling with a sharp increase in debt repayments this year, as measures taken to provide limited debt relief from the start of the pandemic begin to be unwound. David Malpass, president of the World Bank, warned last month that, as a result, there was a growing risk of disorderly defaults among poor countries, many of which have borrowed heavily to fund their pandemic response. More

UK business activity has expanded at its fastest pace for eight months as the Omicron wave faded and consumers headed out to spend on travel and leisure.The latest IHS Markit/Cips flash composite purchasing managers’ index, a monthly survey taking the pulse of the private sector, rose from 54.2 in January to 60.2 in February, showing the highest proportion of businesses since June were reporting rising output.The survey, published on Monday, showed a similar surge in incoming new orders as confidence in the outlook improved. Businesses were at their most optimistic for the year ahead since May, when the economy was reopening from lockdown.Chris Williamson, chief business economist at Markit, said the survey pointed to a “resurgent economy” but noted that it also showed cost pressures intensifying to the second-highest rate in the survey’s history, shortening the odds on an “increasingly aggressive” tightening in monetary policy.The swift rebound, after the Omicron-induced contraction in economic output at the turn of the year, was centred on the services sector, where the business activity index rose to an eight-month high of 60.8. The survey pointed to the fastest rate of job creation since October, driven by the service economy, with demand for business services increasing alongside higher leisure spending.Duncan Brock, group director at the Chartered Institute of Procurement and Supply, said the rise in activity was driven by holiday and hospitality bookings as consumer confidence returned. He warned, however, that inflation remained “stubbornly high”, adding that rising costs for wages, energy and raw materials had “taken a chunk out of business profits”.

Manufacturers reported healthy growth in activity, with the PMI reading for the sector unchanged at 57.3 and output volumes rising swiftly as it became easier to source raw materials and critical components. Gabriella Dickens, at the consultancy Pantheon Macroeconomics, said the survey showed the UK economy was “rebounding from Omicron at a fair clip”.She added that further evidence of price pressures, with a large proportion of companies surveyed by Markit raising prices, would cement the case for the monetary policy committee to raise interest rates next month to 0.75 per cent. More

Vladimir Putin and Joe Biden have accepted “the principle” of a summit to ease tensions over Ukraine, the White House and French presidency said, capping a series of increasingly urgent diplomatic efforts led by Emmanuel Macron to defuse the crisis.The possibility of a meeting between the Russian and US presidents follows days of rising fears that Moscow will launch a full invasion of Ukraine. These concerns were heightened over the weekend when Belarus said 30,000 Russian troops participating in joint drills would stay in the country indefinitely.The Kremlin said on Monday that there were “no concrete plans” for such a meeting, but did not rule out the option. “It is too early to speak of any concrete plans to arrange some sort of summit,” said Kremlin spokesman Dmitry Peskov. But he added: “A meeting is possible if the heads of state decide it is useful.”Instead, he pointed to a potential meeting between Antony Blinken, the US secretary of state, and Sergei Lavrov, Russian foreign minister. “We understand that this week a meeting of Lavrov and his US counterpart is possible. Also, we do not exclude the possibility of ministers of France and Russia,” Peskov said. Putin is due to address a session of Russia’s security council on Monday. On the ground: On Ukraine’s eastern front lines, an FT reporter could hear heavy shelling on Ukrainian army positions.Interview: Germany’s finance minister raised fears that Russia could retaliate against western sanctions by cutting off gas supplies.Opinion: Western officials believe that if Russia attacks, it might use the brutal tactics deployed in Chechnya and Syria. Gideon Rachman asks, how did we get here? Mohamed El-Erian argues that while it is tempting to pin recent market volatility on the Russia-Ukraine situation, there are structural issues at play.Markets Briefing: European stocks dipped on Monday after Russia and the US played down the likelihood of a summit between Putin and Biden.Thanks for reading FirstFT Americas. What questions do you have about the crisis in Ukraine? Share them with us at [email protected] — Wai KwenFive more stories in the news1. Environmental rules deal new blow to US natural gas pipelines The Federal Energy Regulatory Commission voted on Thursday to overhaul the certification process for new gas pipelines, providing for greater scrutiny of the economic need for projects, as well as their impacts on the environment, communities and landowners.

2. European energy groups seek €4bn damages Five energy groups are suing four European governments over the stymying of coal, oil and gas projects as climate change concerns rise, using a secretive process based on an international energy treaty. 3. Lotus explores IPO options The sports car brand is exploring a stock market listing of its China-based luxury lifestyle business within two years to help fund an international expansion and investment in electric vehicles. Lotus is aiming to meet growth targets of a 100-fold rise in sales over the next six years, said one of its most senior executives.4. Video: Plant-based meat — cooling off? A dip in sales growth and investor confidence in the US has analysts wondering whether the plant-based meat sector is going off the boil in its largest market.Carl Icahn launches a board fight at McDonald’s over the treatment of pigs.5. New Honduran government takes steps to plug deep fiscal hole Leftwing president Xiomara Castro took power in the Central American nation last month after a landslide election victory. Her government must now tackle widespread corruption, poverty and a lack of growth and jobs that has pushed hundreds of thousands of its citizens to migrate each year.Coronavirus digestUS biotech Novavax said its protein-based Covid-19 vaccine will be a strong competitor to the BioNTech/Pfizer and Moderna jabs despite its late arrival because of public concerns over the safety of its rivals’ messenger RNA technology.One of the largest police operations in Canada’s history has ended a three-week occupation of the capital by anti-vaccine mandate protesters. Beijing is frustrated with Hong Kong’s leniency towards officials breaching pandemic restrictions. Thousands of residents have left Hong Kong through the airport since pandemic travel restrictions came into place in 2020 as Covid spread to hit another record. The Asian financial hub has become a case study of managing in extreme uncertainty, Ravi Mattu writes.Bored with work from home? Try the “third space”. Not the office, not the home but somewhere in-between: co-working spaces.The response of rich countries and multilateral institutions to the pandemic’s financial impact on poor countries was inadequate and ignored the concerns of governments and the private sector, said Ghana’s finance minister.The day aheadUS markets are closed for the Presidents’ Day holiday.PMIs The flash purchasing managers’ composite index for the eurozone, a measure of the health of manufacturing and services activity, rose to 55.8 in February, up from 52.3 in January and the highest in five months. Northern Ireland protocol talks The “joint committee” — a forum of the UK, European Commission and EU member states that monitors the Brexit agreement — holds a “stocktaking meeting” in Brussels on the Northern Ireland protocol. Foreign ministers also gather to discuss the continent’s security situation.What else we’re reading Metaverse vs employment law: the reality of the virtual workplace It is unclear how employee protections apply in the universal digital realm. What counts as harassment? And can an avatar be discriminated against?Podcast: A rundown of the most important global business stories for the coming day. Is corporate America becoming more inclusive?

Companies that want to occupy the metaverse will have to consider how to protect workers’ data while requiring them to participate in a virtual world

EU and Poland on the brink The European Court of Justice ruled last week that regulations to protect the EU budget from rule of law violations by member states were legally solid, throwing the European Commission further along a collision course with one of the bloc’s biggest members: Poland. Green investing: the risk of a mis-selling scandal ESG funds are popular, but research has found that the sector is rife with greenwashing. Lawyers have warned that a reckoning is coming, as terms used to label and market funds may carry more legal weight than companies thought.US companies add environmental and social targets to executive bonuses.How severe drought has spread across the US.Europe’s companies languish in slow lane Europe’s fragmented single market is like an obstacle course, relegating the region’s companies to also-rans in the global race for growth. The failure to harmonise rules inside the trading bloc has allowed US companies to take the lead, said the continent’s industrialists.Erdogan’s gamble, in charts President Recep Tayyip Erdogan triggered a collapse in the Turkish lira last year when he ordered the central bank to aggressively cut borrowing costs despite soaring inflation. Emergency measures have since restored calm, but analysts are sceptical it will hold.

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TravelFrom Paris to Kyoto check out these smart escapes that won’t break the bank. Explore our list of five chic city stays for £200 or less.

The wabi-sabi courtyard at the Hotel Flora, founded in Venice in 1964 More

Lawsuits from white farmers have blocked $4 billion of pandemic aid that was allocated to Black farmers in the American Rescue Plan.WASHINGTON — For Brandon Smith, a fourth-generation cattle rancher from Texas, the $1.9 trillion stimulus package that President Biden signed into law nearly a year ago was long-awaited relief.Little did he know how much longer he would have to wait.The legislation included $4 billion of debt forgiveness for Black and other “socially disadvantaged” farmers, a group that has endured decades of discrimination from banks and the federal government. Mr. Smith, a Black father of four who owes about $200,000 in outstanding loans on his ranch, quickly signed and returned documents to the Agriculture Department last year, formally accepting the debt relief. He then purchased more equipment for his ranch, believing that he had been given a financial lifeline.Instead, Mr. Smith has fallen deeper into debt. Months after signing the paperwork he received a notice informing him that the federal government intended to “accelerate” foreclosure on his 46-acre property and cattle if he did not start making payments on the loans he believed had been forgiven.“I trusted the government that we had a deal, and down here at the end of the day, the rug gets pulled out from under me,” Mr. Smith, 43, said in an interview.Black farmers across the nation have yet to see any of Mr. Biden’s promised relief. While the president has pledged to pursue policies to promote racial equity and correct decades of discrimination, legal issues have complicated that goal.In May 2021, the Agriculture Department started sending letters to borrowers who were eligible to have their debt cleared, asking them to sign and return forms confirming their balances. The payments, which also are supposed to cover tax liabilities and fees associated with clearing the debt, were expected to come in phases beginning in June.But the entire initiative has been stymied amid lawsuits from white farmers and groups representing them that questioned whether the government could offer debt relief based on race.Courts in Wisconsin and Florida have issued preliminary injunctions against the initiative, siding with plaintiffs who argued that the debt relief amounted to discrimination and could therefore be illegal. A class-action lawsuit against the U.S.D.A. is proceeding in Texas this year.The Biden administration has not appealed the injunctions but a spokeswoman for the Agriculture Department said it was continuing to defend the program in the courts as the cases move forward.The legal limbo has created new and unexpected financial strains for Black farmers, many of whom have been unable to make investments in their businesses given ongoing uncertainty about their debt loads. It also poses a political problem for Mr. Biden, who was propelled to power by Black voters and now must make good on promises to improve their fortunes.The law was intended to help remedy years of discrimination that nonwhite farmers have endured, including land theft and the rejection of loan applications by banks and the federal government. The program designated aid to about 15,000 borrowers who receive loans directly from the federal government or have their bank loans guaranteed by the U.S.D.A. Those eligible included farmers and ranchers who have been subject to racial or ethnic prejudice, including those who are Black, Native American, Alaskan Native, Asian American, Pacific Islander or Hispanic.After the initiative was rolled out last year, it met swift opposition.Banks were unhappy that the loans would be repaid early, depriving them of interest payments. Groups of white farmers in Wisconsin, North Dakota, Oregon and Illinois sued the Agriculture Department, arguing that offering debt relief on the basis of skin color is discriminatory, suggesting that a successful Black farmer could have his debts cleared while a struggling white farm could go out of business. America First Legal, a group led by the former Trump administration official Stephen Miller, filed a lawsuit making a similar argument in U.S. District Court for the Northern District of Texas.Last June, before the money started flowing, a federal judge in Florida blocked the program on the basis that it applied “strictly on racial grounds” irrespective of any other factor.The delays have angered the Black farmers that the Biden administration and Democrats in Congress were trying to help. They argue that the law was poorly written and that the White House is not defending it forcefully enough in court out of fear that a legal defeat could undermine other policies that are predicated on race.Those concerns became even more pronounced late last year when the government sent thousands of letters to minority farmers who were behind on their loan payments warning that they faced foreclosure. The letters were sent automatically to any borrowers who were past due on their loans, including about a third of the 15,000 socially disadvantaged farmers who applied for the debt relief, according to the Agriculture Department.Leonard Jackson, a cattle farmer in Muskogee, Okla., received such a letter despite being told by the U.S.D.A. that he did not need to make loan payments because his $235,000 in debt would be paid off by the government. The letter was jarring for Mr. Jackson, whose father, a wheat and soybean farmer, had his farm equipment foreclosed on by the government years earlier. The prospect of losing his 33 cows, house and trailer was unfathomable.“They said that they were paying off everybody’s loans and not to make payments and then they sent this,” Mr. Jackson, 55, said.The legal fight over the funds has stirred widespread confusion, with Black and other farmers stuck in the middle. This year, the Federation of Southern Cooperatives has been fielding calls from minority farmers who said their financial problems have been compounded. It has become even harder for them to get access to credit now, they say, that the fate of the debt relief is unclear.“It has definitely caused a very significant panic and a lot of distress among our members,” said Dãnia Davy, director of land retention and advocacy at the Federation of Southern Cooperatives/Land Assistance Fund.Mr. Smith bought more equipment for his ranch when he thought aid was finally on the way. But now he’s deeper in debt.Montinique Monroe for The New York TimesThe Agriculture Department said that it was required by law to send the warnings but that the government had no intention of foreclosing on farms, citing a moratorium on such action that was put in place early last year because of the pandemic. After The New York Times inquired about the foreclosure letters, the U.S.D.A. sent borrowers who had received notices another letter late last month telling them to disregard the foreclosure threat.“We want borrowers to know the bottom line is, actions such as acceleration and foreclosure remain suspended for direct loan borrowers due to the pandemic,” Kate Waters, a department spokeswoman, said. “We remain under the moratorium, and we will continue to communicate with our borrowers so they understand their rights and understand their debt servicing options.”The more than 2,000 minority farmers who receive private loans that are guaranteed by the U.S.D.A. are not protected by the federal moratorium and could still face foreclosure. Once the moratorium ends, farmers will need to resume making their payments if the debt relief program or an alternative is not in place.Some Black farmers argue that the Agriculture Department, led by Secretary Tom Vilsack, was too slow to disburse the debt relief and allowed critics time to mount a legal assault on the law.The Biden administration has been left with few options but to let the legal process play out, which could take months or years. The White House had been hopeful that a new measure in Mr. Biden’s sweeping social policy and climate bill would ultimately provide the farmers the debt relief they have been expecting. But that bill has stalled in the Senate and is unlikely to pass in its current form.“While we continue to defend in court the relief in the American Rescue Plan, getting the broader relief provision that the House passed signed into law remains the surest and quickest way to help farmers in economic distress across the nation, including thousands and thousands of farmers of color,” Gene Sperling, the White House’s pandemic relief czar, said in a statement.For Black farmers, who have seen their ranks fall from more than a million to fewer than 40,000 in the last century amid industry consolidation and onerous loan terms, the disappointment is not surprising. John Boyd, president of the National Black Farmers Association, said that rather than hearing about more government reports on racial equity, Black farmers want to see results.“We need implementation, action and resources to farm,” Mr. Boyd said. More