Even those who resist dying may pass away… Donald Trump Is Indicted in New York

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Foreword…

Even Melania Must Know Trump Blew It

NYT, Nov. 14, 2022, By Michelle Cottle

Ms. Cottle is a member of the editorial board.

…Marriage is hard. Even the happiest couples will occasionally bicker, nitpick or wear on each other’s nerves. So consider just how bumpy things could get if someone’s thin-skinned, emotionally erratic, accountability-averse husband started criticizing her for his high-profile screw-ups.

This apparently has been happening at Mar-a-Lago, where, post-election, Donald Trump is flipping out over his key role in the Republicans’ face-plant in the Pennsylvania Senate race. Mr. Trump backed his old buddy Mehmet Oz, and the celebrity doctor turned out to be a loser. The former president has since been shifting the blame for his poor pick onto everyone else — including Melania Trump, according to The Times. (Mr. Trump, of course, hopped on Truth Social to denounce the “Fake Story” and insist he “was not at all ANGRY.”)

By now, Mrs. Trump must be somewhat accustomed to her hubby’s tantrums. Still, this round of ragey finger-pointing must be particularly galling, considering that Mr. Trump didn’t just undermine Republicans’ chances in an eminently winnable Senate race. He helped kneecap the party up and down the Pennsylvania ballot, giving the Democrats in the crucial swing state one of their best Election Days in ages.

How Mr. Trump manages to turn perfectly winnable races and states into big-time losers might be worth a little reflection (read: panic) among Republicans as the former president prepares for his third White House run. This guy has the Midas touch in reverse, yet still he’s planning a “Special Announcement” on Tuesday night — despite even some of his former aides’ urging him to slow his roll. Mr. Trump likes to move fast and furious, to keep heads spinning. His embrace of wing-nut candidates in Pennsylvania, Arizona, Michigan and New Hampshire not only probably cost Republicans potential victories in those battleground states but also offers a sneak peek at what Mr. Trump could do to his party in 2024 if he’s once more at the top of the ticket.

Of all the places where Mr. Trump proved toxic, Pennsylvania may be where he did the most impressive damage — a state that will be key to any winning Republican presidential contender in 2024. The Trumpian fiasco there shows what happens when candidates make the race all about themselves, embracing MAGA and being out of step with the electorate.

In the high-stakes fight for control of the Senate, Pennsylvania was a hot spot, widely considered the Democrats’ best opportunity to flip a Republican-held seat and, by extension, a must-hold for the G.O.P. Dr. Oz’s high-profile flop was a particularly painful one for Mr. Trump’s party. But there’s more: The Democrats scored a huge win in the governor’s race as well, where Josh Shapiro had the good fortune of running against Doug Mastriano, a Trump-endorsed MAGA extremist so unsettling you have to wonder if he is secretly related to Marjorie Taylor Greene. The Democrats also triumphed in House races, holding onto vulnerable seats, including the hotly contested 8th and 17th Districts. And while a couple of tight races have yet to be called, party leaders are thrilled about already netting 11 seats and being this close to possibly flipping the state House, putting Democrats in control of the chamber for the first time in more than a decade. All of this was a step up for them from 2020, when voters went for Joe Biden over Donald Trump but picked Republicans in some other statewide races.

A new legislative map helped boost Democrats in the state House battle. But at the core of their success in Pennsylvania was candidate quality. The new governor-elect, Mr. Shapiro, is considered a gifted politician who by all accounts ran a top-notch campaign, stumping tirelessly and raking in campaign cash. “In Philly he gave us all the resources we could have needed,” said Bob Brady, a former congressman and longtime chairman of the Philadelphia Democratic Party.

And while Mr. Fetterman, the state’s lieutenant governor, gave his party some anxious moments in his Senate run, many related to the stroke he suffered days before the May primaries, he is a promising model for Democrats looking to compete in other tricky purple places. Mr. Fetterman’s blue-collar, anti-establishment brand helped him sell himself as not just another politician — and certainly not some snooty blue-state elite. Looking to woo voters from beyond his party’s usual enclaves, he adopted “Every county, every vote” as his campaign mantra and worked the state accordingly — and successfully. In addition to racking up votes in the areas around Philadelphia and Pittsburgh, he cut into Dr. Oz’s margins in more conservative regions. Independents and moderates broke strongly for Mr. Fetterman, according to CNN’s exit polling.

The myriad charms of the top Democratic candidates aside, they indisputably benefited from facing Trump-approved opponents who, in their respective ways, drew on a Trumpian playbook ill suited to woo Pennsylvanians. First, Dr. Oz. This was arguably Mr. Trump’s most straightforward bet that celebrity logically translates into political success. But the daytime-TV host, a longtime resident of New Jersey, was ripe for caricature as a slick, rich, elitist carpetbagger. This proved to be an especially fun project for Mr. Fetterman, who is devoted to the grittier, redder western region of the state. When asked during his lone debate with Dr. Oz about his loyalties in the fierce intrastate football rivalry between the Eagles and Steelers, Mr. Fetterman did not dissemble. “Always for the Steelers,” he said, with a look suggesting the very question was absurd.

From the moment Dr. Oz won the nomination, Team Fetterman moved to paint him as a Jersey interloper, creatively slamming him on social media at every turn. This played into the larger narrative of the Republican as “a phony,” said Sharif Street, the state’s Democratic Party chair. Dr. Oz had no core values, no clear political identity and no real message, Mr. Street argued, adding that he kept trying to have it “both ways” — presenting himself as a reasonable moderate in the Philly suburbs while playing up his MAGAness in redder, more rural regions.

“Everything Oz did just appeared to be synthetic,” said Fletcher McClellan, a political scientist at Elizabethtown College and longtime analyst of the state’s politics.

There is little question that Democrats were more afraid of and would have had a tougher time beating David McCormick, Dr. Oz’s chief opponent in the Republican primary. “They really dodged a bullet there,” Mr. McClellan said.

Mr. Mastriano, a Republican state senator, was an even bigger boon to the Democrats. Unlike Dr. Oz, this ultra-MAGA warrior had plenty of core values. “Dark, dark values,” Mr. Street quipped.

Mr. Trump liked Mr. Mastriano’s passionate embrace of the former president’s election-fraud lies. But Mr. Mastriano also went all in on the culture warring, taking a hard-right line on everything from abortion to transgender rights to public school curriculums. At no point did he seem interested in reaching beyond his base. “It never seemed to me like he wanted to be governor — more like the leader of a movement,” Mr. McClellan observed.

Mr. Mastriano was so out there that several of the state’s former G.O.P. officials announced their support for Mr. Shapiro. No one was surprised when the Republican fell flat on Election Day.

Still, no one disputes that Mr. Trump’s pathetic candidates helped turn Pennsylvania a much bluer shade of purple this cycle. For now at least, the state’s Democrats may be feeling more fondly toward the former president than many in his own party — and perhaps even his wife.

Image: Germán & Co. Mr. Trump will be the first former president to face criminal charges. The precise charges are not yet known, but the case is focused on a hush-money payment to a porn star during his 2016 campaign.

Donald Trump Is Indicted in New York…

NYT, March 30, 2023, updated March 31, 2023

A Manhattan grand jury indicted Donald J. Trump on Thursday for his role in paying hush money to a porn star, according to people with knowledge of the matter, a historic development that will shake up the 2024 presidential race and forever mark him as the nation’s first former president to face criminal charges.

On Thursday evening, after news of the charges had been widely reported, the district attorney’s office confirmed that Mr. Trump had been indicted and that prosecutors had contacted Mr. Trump’s attorney to coordinate his surrender to authorities in Manhattan.

Mr. Trump is likely to turn himself in on Tuesday, at which point the former president will be photographed and fingerprinted in the bowels of a New York State courthouse, with Secret Service agents in tow. He will then be arraigned, at which point the specific charges will be unsealed. Mr. Trump faces more than two dozen counts, according to two people familiar with the matter.

Mr. Trump has for decades avoided criminal charges despite persistent scrutiny and repeated investigations, creating an aura of legal invincibility that the indictment now threatens to puncture.

But unlike the investigations that arose from his time in the White House — which examined his strong-arm tactics on the international stage, his attempts to overturn the election and his summoning of a mob to the steps of the U.S. Capitol — this case is built around a tawdry episode that predates Mr. Trump’s presidency. The reality star turned presidential candidate who shocked the political establishment by winning the White House now faces a reckoning for a hush-money payment that buried a sex scandal in the final days of the 2016 campaign.

In a statement, Mr. Trump lashed out at the district attorney, Alvin L. Bragg, a Democrat, and portrayed the case as the continuation of a politically motivated witch hunt against him.

“This is political persecution and election interference at the highest level in history,” Mr. Trump said in the statement, calling Mr. Bragg “a disgrace” and casting himself as “a completely innocent person.”

Mr. Trump, who has consistently denied all wrongdoing, has already called on his followers to protest his arrest, in language reminiscent of his social media posts in the weeks before the Jan. 6, 2021, attack on the Capitol by his supporters. He has also denied any affair with the porn star, Stormy Daniels, who had been looking to sell her story of a tryst with Mr. Trump during the 2016 campaign.

“President Trump did not commit any crime,” Mr. Trump’s lawyers, Susan R. Necheles and Joseph Tacopina, said in a statement. “We will vigorously fight this political prosecution in court.”

The first sign that an indictment was imminent on Thursday came just before 2 in the afternoon, when the three lead prosecutors on the Trump investigation walked into the Lower Manhattan building where the grand jury was sitting. One of them carried a copy of the penal law, which was most likely used to read the criminal statutes to the grand jurors before they voted.

The team prosecuting Mr. Trump was led by Matthew Colangelo, center, and Susan Hoffinger, center left, as well as Chris Conroy.Credit...Dave Sanders for The New York Times

Nearly three hours later, the prosecutors walked into the court clerk’s office through a back door to begin the official process of filing the indictment, arriving about two minutes before the office closed for the day.

For weeks, the atmosphere outside the district attorney’s office had resembled a circus, with television trucks and protesters surrounding the building. But the fervor had cooled by Thursday, and the outskirts of the office were emptier than they had been in weeks.

Mr. Bragg is the first prosecutor to indict Mr. Trump, but he might not be the last. Mr. Trump’s actions surrounding his electoral defeat are now the focus of a separate federal investigation, and a Georgia prosecutor is in the final stages of an investigation into Mr. Trump’s attempts to reverse the election results in that state.

But the Manhattan indictment, the product of a nearly five-year investigation, kicks off a volatile new phase in Mr. Trump’s post-presidential life as he makes a third run for the White House. And it will throw the race for the Republican nomination — which he is leading in most polls — into uncharted territory.

Under normal circumstances, an indictment would deal a fatal blow to a presidential candidacy. But Mr. Trump is not a normal candidate. He has already said that he would not abandon the race if he were charged, and the case might even help him in the short term as he paints himself as a political martyr.

The indictment also raises the prospect of an explosive backlash from Mr. Trump, who often uses his legal woes to stoke the rage of die-hard supporters. Already, the former president has used bigoted language to attack Mr. Bragg, the first Black man to lead the district attorney’s office, calling him a “racist,” an “animal” and a “radical left prosecutor.”

Mary Kelley, a supporter of Mr. Trump, on the bridge outside of Mar-a-Lago Club in Palm Beach, Fla., on Thursday.Credit...Josh Ritchie for The New York Times

In the past, Mr. Trump has lashed out when feeling cornered, encouraging the violent attack on the Capitol as he contested the results of the 2020 presidential election. That assault on the seat of government demonstrated that Mr. Trump’s most zealous followers were willing to resort to violence on his behalf as he sought to overturn the election results.

While the specific charges in the Manhattan case against the former president remain unknown, Mr. Bragg’s case centers on a $130,000 hush-money payment to Ms. Daniels.

Mr. Trump’s longtime fixer, Michael D. Cohen, made the payment in the final days of the 2016 campaign. Mr. Trump later reimbursed him, signing monthly checks while serving as president.

Mr. Bragg’s prosecutors appear to have zeroed in on the way Mr. Trump and his family business, the Trump Organization, handled the reimbursement to Mr. Cohen. In internal documents, Trump Organization employees falsely recorded the repayments as legal expenses, and the company invented a bogus retainer agreement with Mr. Cohen to justify them.

Mr. Cohen, who broke with Mr. Trump in 2018 and later testified before Congress as well as the grand jury that indicted Mr. Trump, has said that the former president knew about the phony legal expenses and retainer agreement.

In New York, it can be a crime to falsify business records, and Mr. Bragg’s office is likely to build the case around that charge, according to people with knowledge of the matter and outside legal experts.

But to charge falsifying business records as a felony, rather than a misdemeanor, Mr. Bragg’s prosecutors must show that Mr. Trump’s “intent to defraud” included an effort to commit or conceal a second crime.

That second crime could be a violation of election law. Mr. Bragg’s prosecutors might argue that the payment to Ms. Daniels represented an illicit contribution to Mr. Trump’s campaign: The money silenced Ms. Daniels, aiding his candidacy at a crucial time.

“Campaign finance violations may seem like small potatoes next to possible charges for his attempt to overthrow the 2020 election, but they also go to the heart of the integrity of the electoral process,” said Jerry H. Goldfeder, a special counsel at Stroock & Stroock & Lavan LLP and a recognized expert in New York state election law.

If Mr. Trump were ultimately convicted, he would face a maximum sentence of four years, though prison time would not be mandatory.

Yet a conviction is not a sure thing, and Mr. Bragg’s case might apply a legal theory that has yet to be evaluated by judges. A New York Times review of relevant cases and interviews with election law experts strongly suggest that New York State prosecutors have never before filed an election law case involving a federal campaign.

An untested case against any defendant, let alone a former president of the United States, carries the risk that a court could throw out or limit the charges.

Mr. Trump will not be the first person charged over the hush-money payment. In 2018, Mr. Cohen was federally prosecuted for the payment and pleaded guilty to campaign finance violations.

Mr. Cohen is likely to become Mr. Bragg’s star witness at trial. While his past crimes will make him a target for Mr. Trump’s lawyers — who can be expected to attack the former fixer’s credibility at every turn — prosecutors will be likely to counter that Mr. Cohen lied on behalf of Mr. Trump, and that his story has been consistent for years.

In a statement, Mr. Cohen said he took “solace in validating the adage that no one is above the law; not even a former president.”

His lawyer, Lanny J. Davis, said that “Michael Cohen made the brave decision to speak truth to power and accept the consequences,” and that “he has done so ever since.”

Mr. Cohen will not be the prosecution’s only witness: David Pecker, a longtime ally of Mr. Trump and the former publisher of The National Enquirer, testified before the grand jury twice this year. He is likely to be able to corroborate important aspects of Mr. Cohen’s story, including that Mr. Trump wanted to bury embarrassing stories to protect his presidential campaign, not just his family, as his lawyers contend.

Soon after Mr. Trump began his campaign in 2015, he hosted Mr. Pecker for a meeting at Trump Tower, during which the publisher agreed to look out for stories that might damage Mr. Trump’s candidacy.

One such story arose in the summer of 2016, when Karen McDougal, Playboy’s playmate of the year in 1998, said that she had had an affair with Mr. Trump. She reached a $150,000 agreement with the tabloid, which bought the rights to her story to suppress it, a practice known as “catch and kill.”

When Ms. Daniels tried to secure a similar arrangement, Mr. Pecker didn’t take the deal. But he and the tabloid’s former top editor helped broker Mr. Cohen’s payment to Ms. Daniels.

Despite the potential legal obstacles, and questions about Mr. Cohen’s credibility, if the case does go to trial, the salacious details could sink Mr. Trump. While white-collar prosecutions are often dry and procedural, this one will likely have some built-in jury appeal: a defendant charged with a seedy crime in a city where he is loathed by many.

Any trial is months away. It will take time for Mr. Trump’s lawyers to argue that the case should be thrown out. That timeline raises the extraordinary possibility of a trial unfolding in the thick of the 2024 presidential campaign.

The case would come before a jury more than five years after Mr. Cohen’s federal guilty plea prompted the district attorney’s office to open an investigation into Mr. Trump’s role in the hush-money saga. The inquiry began under Mr. Bragg’s predecessor, Cyrus R. Vance Jr., who did not seek re-election.

Over the years, the investigation expanded to include whether Mr. Trump had lied about his net worth on annual financial statements. Although Mr. Vance’s prosecutors were marching toward an indictment of Mr. Trump for inflating his net worth, soon after Mr. Bragg took office, he developed concerns about proving the case.

But he continued to scrutinize Mr. Trump. And in January, a few months after his prosecutors began revisiting the potential hush-money case, Mr. Bragg impaneled the grand jury that has now indicted Mr. Trump.

Conspiracy theorists online grasp for explanation behind indictment.

On social media channels associated with extremists and conspiracy theorists, people searched for an explanation behind former President Donald J. Trump’s indictment on Thursday, with some calling him a victim of a Democratic witch hunt to suppress his influence and others describing him as a grand master playing political chess to reclaim the presidency.

The scattered response reflects the shift in Mr. Trump’s power since a large group of his supporters stormed the Capitol after he lost the 2020 election. In the years since, Mr. Trump’s political movement experienced multiple electoral defeats. Some supporters were jailed after the attack on the Capitol. The social media landscape shifted, and Mr. Trump’s digital reach remains limited by an obligation that he first post on Truth Social, the social network he started last year that has far fewer users than Twitter and Facebook.

Mr. Trump tried rallying his base as the expected indictment drew near — and he earned widespread support from Republicans. Mr. Trump’s recent calls for supporters to protest his potential arrest received a muted response.

Online conversations about the indictment on Thursday seemed to reflect the absence of clear direction. QAnon accounts on Telegram began posting slogans associated with the conspiracy theory, such as “trusting the plan” and “the storm is upon us,” in support of Mr. Trump. Dan Bongino, a radio host who has echoed Mr. Trump’s false claims of voter fraud, wrote on Truth Social that “the police state is here.” Some users claimed that the indictment would only strengthen support for Mr. Trump and help him win re-election in 2024.

Exaggerated accounts of the connections between Alvin L. Bragg, the Manhattan district attorney overseeing the case, and George Soros, the financier and Democratic megadonor, continued to spread. Representative Paul Gosar, a Republican from Arizona, wrote on the social network Gab that Mr. Bragg was “a Soros D.A.,” although a spokesman for Mr. Soros has said that he has never met Mr. Bragg nor donated directly to his campaign. (Mr. Soros donated $1 million to the political arm of Color of Change, a progressive criminal justice group that endorsed Mr. Bragg.)

Threats directed at Mr. Bragg and Mr. Soros peppered online discussions of the indictment — including claims that people were watching Mr. Bragg’s house and children, appeals for Trump supporters to “pick up your rifles” and posts asking “when is go time.” On Truth Social, some called for an armed defense of Mar-a-Lago, the former president’s residence in Florida.

Much of the chatter on far-right channels appeared to be an effort to vent or prognosticate, rather than attempt any coordinated effort. Some users called for peaceful protest and urged others to resist acting on their emotions until more was known about the indictment.

Mike Pence, on a previously booked TV interview, calls the indictment ‘an outrage.’

Mike Pence, who was Donald J. Trump’s vice president, defended his former running mate on Thursday night, describing Mr. Trump’s indictment in a hush-money case as “an outrage.”

“The unprecedented indictment of a former president of the United States on a campaign finance issue is an outrage,” Mr. Pence told the host Wolf Blitzer on CNN.

He accused Alvin Bragg, the Manhattan district attorney, of having “literally ran” his campaign vowing to go after Mr. Trump. Mr. Bragg talked about Mr. Trump during his campaign in 2021.

Mr. Pence, who is considering a run for president, added that the indictment had no bearing on his own decision about the 2024 race.

But by virtue of being previously booked on CNN, Mr. Pence was one of the few prospective candidates to comment. Chris Christie and Senator Tim Scott did not comment. Neither did Nikki Haley, who declared her candidacy last month.

Gov. Ron DeSantis of Florida, who is expected to run but has not yet announced his campaign, called the indictment of Mr. Trump “un-American.” Vivek Ramaswamy, one of the lesser-known Republican contenders, also weighed in, condemning the indictment in a statement as undermining “public trust in our electoral system and our justice system” and urging other candidates to join him in denouncing it.

Two weeks ago, Mr. Pence delivered his strongest public rebuke yet of Mr. Trump, saying that “that history will hold Donald Trump accountable” for the Jan. 6, 2021, attack on the Capitol, which he called “a disgrace.

Democratic reaction focuses on a theme: accountability.

Some Democrats cheered. Others were somber.

But from New York to New Mexico, the early Democratic reaction to news of Donald J. Trump’s indictment had one common message: No one is above the law.

In statements and interviews, party chairs, representatives from left-leaning organizations and other Democratic officials cast the indictment as a critical measure of accountability for a politician who has long trafficked in lies and now faces a morass of legal difficulties.

“This indictment is a long-overdue step in holding Trump accountable for his flagrant disregard for our laws and democracy,” said Jessica Velasquez, chair of the Democratic Party of New Mexico. “The legal system is finally holding him accountable for past transgressions, but it’s up to the voters to hold him accountable in his current run for president.”

“Trump is being held accountable for breaking the law,” added Jane Kleeb, her counterpart in Nebraska.

While he is innocent until proven guilty, Mr. Trump was indicted on Thursday by a special grand jury in connection with his role in paying hush money to a porn star, making him the first former president to face criminal charges in American history.

The specific charges are not yet known, and some Democrats warned against making sweeping judgments without more information.

“In America we believe in the rule of law,” Representative Ruben Gallego, who is running for the Senate in Arizona, said in a statement. “We should wait to hear from the grand jury before jumping to conclusions.”

Mayor Randall L. Woodfin of Birmingham, Ala., stressed that “grand juries are a serious matter.”

“Since 2016, American politics have been a mess, an embarrassing mess,” he said in an interview, saying that Mr. Trump had done things “where many just thought he was above the law. I want to be totally clear when I say this: Nobody’s above the law.”

But it is not yet clear how much, if at all, leading Democrats will lean into discussing the indictment in a political context, especially until charges are known.

In a statement, the Democratic National Committee made only a passing reference to the development before shifting to lash Republicans over more traditional political fare concerning abortion rights and the social safety net, as well as Republican efforts to undermine “free and fair elections.”

“No matter what happens in Trump’s upcoming legal proceedings, it’s obvious the Republican Party remains firmly in the hold of Donald Trump and MAGA Republicans,” said Ammar Moussa, a representative for the D.N.C. “We will continue to hold Trump and all Republican candidates accountable for the extreme MAGA agenda.”

Others, like Representative Adam B. Schiff, didn’t hold back. Mr. Schiff, who is running for the Senate in California and who led the first impeachment trial of Mr. Trump, is already fund-raising off the development.

“Donald Trump was just indicted,” the appeal said. “Adam has always championed progressive values and led the fight to protect our democracy. Now, taking his fight to Trump’s biggest defenders in the Senate is more important than ever.”

Image: Germán & Co

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Cooperate with objective and ethical thinking…

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News round-up, March 29, 2023

A word from the Editors…

Bad memories from the future…

It is said that we so-called human beings have short memories not because of neurodegenerative problems that come with age but because our personal interests, especially our political ambitions, outweigh those of humanity. Time and time again, we make blunders that have ruthless repercussions on society, especially politicians. Regrettable but true...

Warning against Appeasement…

Alexander Solzhenitsyn, Warning to the West,   2016.

…”Solzhenitsyn’s warnings take several forms in this work. Most persistently, he calls for the West to stop providing aid to the Soviet Union, to stop signing treaties with the Soviet Union, and to quit believing in détente, which Solzhenitsyn saw as nothing more than a sham. For one, the Soviet Union would never have admitted to having received help from the West. Solzhenitsyn’s case in point is the American Relief Administration (ARA), which was led by future President Herbert Hoover shortly after the First World War. The effort employed “more than 120,000 Russians and fed 10.5 million people daily,” according to Infogalactic. According to Solzhenitsyn, the Soviet authorities later denounced the ARA as a spy operation. The ARA ceased its operations in the Soviet Union in 1923 when they discovered that the Soviets were once again exporting grain. Solzhenitsyn further elaborates on how modern Western leaders were all too eager to sign accords with the Soviets while remaining blind to how the Soviets had always violated those accords:

Take the SALT [Strategic Arms Limitations Talks] alone: in these negotiations, your opponent is continually deceiving you. Either he is testing radar in a way which is forbidden by the agreement, or he is violating the limitations on the dimensions of missiles, or he is violating the limitations on their destructive force, or else he is violating the conditions on multiple warheads.

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Most read…

EU threatens more sanctions if Russia moves nukes to Belarus

Borrell tweeted: “Belarus hosting Russian nuclear weapons would mean an irresponsible escalation & threat to European security. Belarus can still stop it, it is their choice. The EU stands ready to respond with further sanctions.”

Euronews  with AP, 28/03/2023

Here’s How to Handle North Korea: Give Peace a Chance

Nuclear weapons are in North Korea, since last year, it has tested a record number of missiles, including potent ICBMs thought to be capable of dropping a warhead anywhere on American soil.

NYT by Dan Leaf, March 29, 2023

EU countries seek legal option to stop Russian LNG imports

This month, EU Energy Commissioner Kadri Simson advised European businesses not to enter into new LNG contracts with Russia, a recommendation from Spanish Energy Minister Teresa Ribera.

REUTERS By Kate Abnett

Russia March fuel oil exports to Singapore and Malaysia hit record-traders, data

Russian fuel oil and VGO shipments might amount to more than 4.5 million tonnes and be at their highest level since October 2022 as traders try to eliminate excess volumes following loading delays brought on by bad weather in February.

Reuters

Our stove is the first appliance to get a battery, but not the last…

It's going to revolutionize the game, says Baker. "Absorbing this [electricity] locally actually makes financial sense. Using appliances to complete the task is optimal.

TWP Advice by Michael J. Coren, March 28, 2023 

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: www.taz.de "Alexander Solzhenitsyn on his return from exile, 1994. President W. Putin, Germán & Co by Shutterstock

EU threatens more sanctions if Russia moves nukes to Belarus

Borrell tweeted: “Belarus hosting Russian nuclear weapons would mean an irresponsible escalation & threat to European security. Belarus can still stop it, it is their choice. The EU stands ready to respond with further sanctions.”

Euronews  with AP, 28/03/2023

The EU's foreign policy chief Josep Borrell has cautioned Belarus about allowing Russia to station tactical nuclear weapons on its territory.

In an interview on Saturday, Russian President Vladimir Putin said the move was triggered by Britain’s decision last week to provide Ukraine with armour-piercing rounds containing depleted uranium.

Tactical nuclear weapons are intended for use on the battlefield. They have a short range and a low yield compared with much more powerful nuclear warheads fitted to long-range missiles. 

The move also drew swift condemnation from NATO spokesperson Oana Lungescu, who called it "dangerous and irresponsible".

The US says there has been no indication Russia has moved nuclear weapons across its border. 

"We have not seen any reason to adjust our own strategic nuclear posture," the US Defense Department said in a statement.

On Sunday, Ukraine called for an urgent meeting of the UN Security Council, with Ukrainian Security Council Secretary Oleksiy Danilov saying the Kremlin had taken Belarus "nuclear hostage". 

It is a "step towards the internal destabilisation of the country," he added. 

Putin said Russia planned to maintain control over the nukes it sends to Belarus, with the construction of storage facilities to be completed by 1 July.

He didn’t say how many nuclear weapons Russia would keep in Belarus, which shares a long border with Ukraine and NATO members Poland, Lithuania and Latvia. 

The US government believes Russia has about 2,000 tactical nuclear weapons, including bombs that can be carried by tactical aircraft, warheads for short-range missiles and artillery rounds.

Putin argued that by deploying its tactical nuclear weapons in Belarus, Russia was following the lead of the United States, noting the country has nukes in Belgium, Germany, Italy, the Netherlands and Turkey.

“We are doing what they have been doing for decades, stationing them in certain allied countries, preparing the launch platforms and training their crews,” Putin said, speaking in an interview on state television that aired Saturday night. 

“We are going to do the same thing.”

The Russian leader claimed the move would not violate existing nuclear-non-proliferation agreements. 

Russia currently stores tactical nuclear weapons at dedicated depots on its territory. 

Moving part of the arsenal to a storage facility in Belarus would up the ante in the Ukrainian conflict by placing them closer to the combat zone and NATO states.

This will be the first time Moscow has based nuclear weapons outside of its borders. 

Before the collapse of the Soviet Union in 1991, it stationed nukes in Ukraine, Belarus and Kazakhstan. However, they were transferred back to Russian territories in 1996. 

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Image: Germán & Co by Shutterstock

Here’s How to Handle North Korea: Give Peace a Chance

Nuclear weapons are in North Korea, since last year, it has tested a record number of missiles, including potent ICBMs thought to be capable of dropping a warhead anywhere on American soil.

NYT by Dan Leaf, March 29, 2023

Mr. Leaf is a retired U.S. Air Force lieutenant general and a former deputy commander of the U.S. Indo-Pacific Command

Not many people know how to wage nuclear war. I’m one of them.

As a young U.S. Air Force fighter pilot in the late 1970s, I was trained to carry out nuclear strikes in a rigorous process designed to ensure that no contingencies — mechanical or ethical — deter your mission. Certain things remain burned into my memory: Maps and photos of my target and the realization of the Armageddon I would leave in my wake. Training culminated with a sworn pledge to vaporize that target without hesitation.

Much of my 33-year career was spent as a nuclear warrior — I later oversaw the U.S. intercontinental ballistic missile fleet and served as deputy commander of American military forces in the Pacific — experience that informs my deep alarm over the growing risk of nuclear conflict with North Korea.

The United States has tried for decades to prevent the country from becoming a nuclear threat, veering from diplomacy to pressure to patience. None of these approaches have worked.

North Korea has nuclear weapons. It has conducted missile tests at a record pace since last year, including powerful ICBMs believed to be capable of delivering a warhead anywhere in the continental United States. In January, Kim Jong-un, North Korea’s leader, ordered an “exponential” expansion of the country’s nuclear arsenal, and last year his government passed a law authorizing a pre-emptive nuclear strike. In response, President Yoon Suk Yeol of South Korea has said his country may consider developing nuclear weapons.

In this hair-trigger environment, one bad decision or misunderstanding could kill millions.

I spent four years in South Korea, including in high-level positions at the headquarters of combined U.S., South Korean and U.N. forces, overseeing the vast destructive forces amassed for a war that was no longer being fought. In my time in the region, I went from scratching my head to pulling my hair out. The standoff is one of the great absurdities in global geopolitics.

You must be aggressive to win wars but assertive to make peace. No matter how challenging the negotiations and politics of securing peace on the Korean Peninsula may prove, they are nothing compared to nuclear war.

A permanent peace agreement would undermine Mr. Kim’s portrayal of the United States as an existential threat and his justification for building up his conventional and nuclear arsenal. It could also short-circuit the siege mentality underlying his repressive regime. Sanctions relief and economic development could follow, leading to long-hoped-for improvements in the quality of life and human rights for North Korea’s 25 million people.

The United States, North Korea and South Korea have all pledged in recent years to pursue a lasting peace agreement. Separate meetings that President Donald Trump and then-President Moon Jae-in of South Korea held with Mr. Kim in 2018 committed to that goal. It brought an immediate easing of tensions. Land mines were removed from portions of the Korean Demilitarized Zone, Korean families held reunions, Mr. Kim declared a moratorium on long-range missile and nuclear tests, the North returned remains of U.S. servicemen and released three detained Americans. Even after Mr. Trump’s outreach to Mr. Kim collapsed in 2019, Mr. Kim indicated he was still open to diplomacy.

There is currently a bill in the House of Representatives calling for a peace deal. The Peace on the Korean Peninsula Act would require the secretary of state to submit a “clear road map for achieving a permanent peace agreement”; pursue “serious, urgent” diplomacy in pursuit of a binding agreement; and begin to address America’s lack of diplomatic relations with North Korea by establishing liaison offices on each other’s soil.

The bill is imperfect. Much of it focuses on creating the conditions for Korean Americans to visit relatives in the North. (U.S. law currently bars travel by Americans to North Korea unless it serves an ill-defined “national interest.”) It also lacks other steps necessary to entrench peace, such as a process for U.S.-North Korean reconciliation, normalization of disputed maritime boundaries and a framework for talks between the opposing military forces.

There is an urgent need for progress. After the diplomatic overtures of recent years fell apart, Mr. Kim has only become more belligerent and the risk of conflict is more acute. Passage of a strengthened Peace on the Korean Peninsula Act is essential to securing a lasting solution, yet the current bill has not advanced since it was first introduced in 2021.

Critics argue that a peace agreement may actually increase the risk of war by undermining safeguards put in place by the armistice nearly 70 years ago. These include specific demarcation lines and protocols for communications, movement and other actions within the DMZ. But there is nothing foolproof about the armistice. President Bill Clinton considered bombing North Korea in 1994, and Mr. Trump reportedly discussed using nuclear weapons in 2017. North Korea occasionally carries out provocations, and the North and South have exchanged artillery fire on several occasions.

There are other risks: Pyongyang may use a peace agreement as a pretext to demand the removal of U.S. troops from South Korea, which is a matter between Seoul and Washington.

But the hardest part of ending the war might be building the political will for it in Washington. Accommodating North Korea would inevitably lead to accusations that we are rewarding bad behavior and legitimizing a totalitarian regime. But the Kim family has ruled for 75 years; it’s time to accept that this is unlikely to change anytime soon.

At this moment, the next generation of men and women north and south of the DMZ are preparing for nuclear war. May they never have to put their training to use.

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Image: LNG tanker SCF La Perouse sails along Nakhodka Bay near the port city of Nakhodka, Russia June 13, 2022. REUTERS/Tatiana Meel

EU countries seek legal option to stop Russian LNG imports

This month, EU Energy Commissioner Kadri Simson advised European businesses not to enter into new LNG contracts with Russia, a recommendation from Spanish Energy Minister Teresa Ribera.

REUTERS By Kate Abnett

LNG tanker SCF La Perouse sails along Nakhodka Bay near the port city of Nakhodka, Russia June 13, 2022. REUTERS/Tatiana Meel

BRUSSELS, March 28 (Reuters) - European Union countries agreed on Tuesday to seek a legal option to stop Russian companies sending liquefied natural gas to EU nations, by preventing Russian firms from booking infrastructure capacity.

EU countries' energy ministers proposed that new EU gas market rules should include the option for governments to temporarily stop Russian and Belarusian gas exporters from bidding up-front for capacity on the infrastructure needed to deliver LNG into Europe.

The proposal is part of countries' negotiating position on new EU gas market rules. It must be negotiated with the European Parliament - a process that can take months.

The 27-country EU has pledged to ditch Russian gas in response to Moscow's invasion of Ukraine. Europe's pipeline imports of gas from Russia have plunged since the invasion, but LNG imports have increased.

Russian LNG deliveries to Europe increased last year - to 22 bcm, up from around 16 bcm in 2021, according to EU analysis.

Lithuanian Vice Minister for Energy Albinas Zananavicius said the proposal would avoid a situation where LNG infrastructure designed to help countries swap Russian gas for alternatives, was in fact being used to import more from Moscow.

"You build the infrastructure to get rid of the supplier who manipulated your (gas) markets and caused great difficulties to you - and then you accept the same supplier through LNG? There's something wrong with the logic," he told Reuters.

If approved, the proposal would offer member states a route to stop Russian LNG imports without using sanctions - which are politically harder to greenlight because they need unanimous approval from all 27 EU member states.

Hungary said it could not support the negotiating position on the new EU gas market law, which also includes a raft of new rules to integrate more low-carbon gases.

EU Energy Commissioner Kadri Simson this month urged European companies not to sign new Russian LNG deals - a request also made by Spanish Energy Minister Teresa Ribera to firms in Spain.

However, such requests are not binding, since Russian gas and LNG are not subject to EU sanctions. The EU does have a ban on seaborne crude oil and oil products imports from Russia.

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Image: Germán & Co

Russia March fuel oil exports to Singapore and Malaysia hit record-traders, data

Russian fuel oil and VGO shipments might amount to more than 4.5 million tonnes and be at their highest level since October 2022 as traders try to eliminate excess volumes following loading delays brought on by bad weather in February.

Reuters

MOSCOW, March 29 (Reuters) - Russia has sent record volumes of sea-borne fuel oil and vacuum gasoil (VGO) to Singapore and Malaysia in March, adding to oversupplied Asian markets, traders said and Refinitiv data showed.

The European Union's full embargo on Russian oil products came into effect on Feb. 5 and the bulk of Russia's fuel oil and VGO was redirected to other regions, mostly Asia, long before the deadline.

According to Refinitiv data, in March fuel oil and VGO shipments from Russian ports to Singapore and Malaysia could exceed 1.1 million tonnes, in line with loadings from the United Arab Emirates (UAE).

In total, Russian fuel oil and VGO exports could be at their highest since October, 2022, and reach more than 4.5 million tonnes, as traders look to get rid of surplus volumes after loading delays in February due to storm weather.

Meanwhile, Fujairah as a major trading hub in the UAE has also received volumes of Russian dirty oil products, which could total this month at least 300,000 tonnes.

Some Russian oil products are shipped to Asia via ship-to-ship (STS) loadings, and this month dirty oil product flows from Russian ports to STS loadings near Kalamata port are expected to reach between 0.8 and 1.0 million tonnes, Refinitiv figures showed.

Several tankers loaded in Russian ports also have no final destinations yet, so the real total of fuel oil shipments in March from Russia to Singapore and Malaysia could be much higher than 1 million tonnes, traders said.

"I believe that a huge part of those supplies will be `on the water`, for storage", one trader said.

About 350,000-400,000 tonnes of fuel oil and VGO loaded from Russian ports in March could end up in Turkey, while supplies to India have fallen drastically to less than 100,000 tonnes, according to Refinitiv data.

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Illustration by Emily Sabens/The Washington Post; iStock.

Our stove is the first appliance to get a battery, but not the last…

It's going to revolutionize the game, says Baker. "Absorbing this [electricity] locally actually makes financial sense. Using appliances to complete the task is optimal.

TWP Advice by Michael J. Coren, March 28, 2023 

Your appliances, you should know, will come loaded with batteries. We’ll probably have energy storage in our stoves and water heaters, perhaps even our washers and dryers.

Traditionally, batteries’ main purpose was to make gadgets portable. Today, they’re emerging as a shortcut on our path to “electrify everything.”

To switch from fossil fuels, we’ll need to plug in a bunch of new things: our cars, our stoves, our heaters and more. Many homes were not designed to carry this kind of load. Installing high-voltage wires, upgrading panels and rewiring your connection to utility poles is like building an electric highway into your home when all you have is a country road.

These retrofits are expensive — if you can find someone to do them, given the crush of new demand. Instead of rewiring our homes and upgrading grid infrastructure, appliances with batteries will allow us to stash energy around the house for when we need it, eliminating a final barrier to stop burning natural gas and heating oil inside our homes.

This is one of our best shots to decarbonize existing buildings. In the transportation and electricity sector, only a few hundred companies, automakers and utilities, must change their practices to phase out fossil fuels. But tamping down buildings’ emissions requires millions of individual households and property owners to make expensive, unfamiliar investments.

Little batteries are here to help…

Induction stoves

Induction stoves are the first major appliances to come with batteries. While a standard 120-volt plug can handle most daily cooking routines, running an electric oven and four burners draws a blistering 10 kilowatts, equivalent to more than 10 space heaters running full blast simultaneously. To handle that much juice, if only for a few minutes, you need a 240-volt outlet, like the ones for clothes dryers or conventional electric ovens.

Millions of homes do not have one, especially in the kitchen. In my own 1940s condominium, my electrician estimated running the wiring for a 240-volt outlet for an induction stove will cost $3,800. Battery-enabled stoves avoid this by plugging into an existing 120-volt outlet. When a burst of electricity is needed, the battery discharges energy. No new wiring necessary.

These little batteries are not quite here yet. For now, no major manufacturers are integrating batteries into their appliances. Rheem, a global water heater manufacturer, released the first 120-volt water heater heat pump last year, although it doesn’t include energy storage.

But start-ups are rushing into this space.

San Francisco-based Impulse Labs plans to sell its first battery-enabled induction stove in the next year or so. Its 3-kilowatt-hour battery packs enough electricity to roast a Thanksgiving turkey with all the fixings, or cook three meals during a blackout, says founder Sam D’Amico. Channing Street Copper will ship its full-range Charlie model later this year for $5,999 before incentives. Charlie offers the option to plug other appliances into the stove, like your refrigerator or phone, as backup power. Both appliances use batteries to supplement, rather than replace, electricity from the 120-volt outlet. The batteries’ lithium-ion phosphate chemistry is more stable and environmentally friendly than traditional lithium-ion batteries in electric vehicles or phones.

Neither is aimed at the lower end of the market, even after generous rebates. But both start-ups say prices will come down, and for people wanting to have backup power storage in their home, it will be much cheaper to buy plug-in-ready batteries within appliances than installing stand-alone energy storage. By some estimates, it is 3 to 10 times more expensive to install equipment like home batteries, compared to the batteries themselves. Eventually, these companies plan to integrate their customers’ batteries into massive networks that represent many megawatts of flexible energy storage.

“We won’t stop at doing stoves,” says D’Amico. “You’ll get a number of appliances, and all of them will come with appropriately sized batteries. As you incrementally electrify your house, you get incremental energy storage. It’s like getting a Tesla Powerwall without ever getting a Powerwall.”

Backing up your home grid

Little affordable batteries could help countries leapfrog into a renewable future, rather than wait for utilities to invest billions of dollars in new transmission, better home connections and energy storage.

Right now, your appliances use little energy for most of the day. Yet each morning and evening, your home’s energy use spikes when water heaters click on or the oven fires up. Multiply this intense burst of electricity by millions of appliances. You can see the problem.

In the United Kingdom, there’s a name for this phenomenon: the kettle surge. During breaks in popular TV programs, millions of electric kettles turn on at once, leading to a massive, destabilizing surge of demand. To meet it, a dedicated “grid energy balancing” team at the national utility uses computer models to forecast electricity consumption, even tracking popular TV dramas. A standard soap opera episode might imply an extra 300 megawatts of power during breaks, but if a main character dies during the episode, the audience might need 600 megawatts or more.

Smoothing out spikes like this means the U.K. must run power plants on standby, or import huge volumes of energy from mainland Europe.

But small batteries could step up to the plate.

Stoves, heat pumps, washers and dryers. Even kettles. At a national scale, these could soak up cheap power when renewables are plentiful, and dispatch it during the peak hours in the mornings and evenings when electricity supplies are tight. As people swap gas for electricity, and less consistent wind and solar energy comes online, this will only become more valuable. It will help manage spikes — and maybe even earn you money from selling power to the grid or dodging peak electricity prices.

Energy companies and appliance manufacturers like Impulse and Channing Street Copper are already vying to manage the megawatts of power stored in millions of appliances.

It seems like a clear climate win. But since battery manufacturing is so energy-intensive, it’s not clear if installing so many batteries guarantees lower overall emissions. “It’s an open question still whether or not getting batteries into the home is on its face a decarbonization strategy,” Wyatt Merrill, who works on building electrification at the Department of Energy, told the climate podcast Volts. “It definitely has the potential to be. But when you think about the entire life cycle of mining lithium and developing the batteries and shipping them around, you really have a hole to dig out of.”

Still, economic forces may usher in a world of little batteries everywhere faster than we think. Priced at more than $10,000, large stationary batteries like Tesla Powerwalls — another solution to support a clean grid — remain too expensive for many homes. With utilities imposing time-of-use rates and curtailing homeowners’ ability to sell solar electricity back to the grid, storage in your home will only become more valuable.

Kyri Baker, an assistant professor of engineering at the University of Colorado at Boulder, says these new appliances can deliver low-cost energy storage at home while building the grid’s capacity to absorb clean, excess energy.

“It’s going to be a game changer,” says Baker. “It really makes financial sense to absorb this [electricity] locally. The best way is to let appliances do it.”

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Cooperate with objective and ethical thinking…

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News round-up, March 28, 2023

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Most read…

Fed’s Barr Calls Silicon Valley Bank a ‘Textbook Case of Mismanagement’

Top bank regulator to testify Tuesday alongside other officials

TWSJ By Andrew Ackerman and Andrew Duehren, March 27, 2023

Netanyahu Cannot Be Trusted

The Israeli prime minister is acting irrationally for the first time, endangering not only Israelis but also crucial American interests and principles.

NYT By Thomas L. Friedman, March 28, 2023

Exclusive: US plans ultimatum in Mexico energy dispute, raising threat of tariffs

According to three people familiar with the negotiations, the Office of the United States Trade Representative (USTR) will present what has been dubbed a "final offer" to Mexico's negotiators in order to get it to open its markets and accept more oversight.

REUTER By Jarrett Renshaw and David Lawder

The House GOP Moves on Energy

Will Democrats in swing districts and states oppose a bill to expand production?

TWSJ By The Editorial Board, March 26, 2023

Russia fires anti-ship missiles at mock target in Sea of Japan

Russia's Pacific fleet drills came a week after Japanese Prime Minister Fumio Kishida visited Ukraine.

Le Monde with AFP, NOW 

NATO criticizes Putin for 'dangerous' rhetoric over Belarus nuclear weapon deployment

Putin says the move does not violate any nonproliferation agreements and that he’s not doing anything the U.S. hasn’t done for decades in stationing its weapons in Europe.

CBC NEWS by Leila Sackur

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: Michael Barr, the Federal Reserve’s top banking regulator, says the central bank is reviewing its supervision of Silicon Valley Bank. PHOTO: MANUEL BALCE CENETA/ASSOCIATED PRESS

Fed’s Barr Calls Silicon Valley Bank a ‘Textbook Case of Mismanagement’

Top bank regulator to testify Tuesday alongside other officials

TWSJ By Andrew Ackerman and Andrew Duehren, March 27, 2023

WASHINGTON—The failure of Silicon Valley Bank demonstrates a “textbook case of mismanagement,” the Federal Reserve’s top banking regulator is expected to tell Senate lawmakers on Tuesday, while acknowledging there may have been shortcomings in the central bank’s oversight. 

“SVB failed because the bank’s management did not effectively manage its interest-rate and liquidity risk, and the bank then suffered a devastating and unexpected run by its uninsured depositors,” said Michael Barr, the Fed’s vice chairman for supervision, in written testimony released by the central bank. 

Mr. Barr is set to appear on Capitol Hill as officials across Washington probe the collapses of SVB, the second-biggest bank failure in U.S. history, and Signature Bank in New York. Fearing their failures could spread contagion to the rest of the financial system, federal regulators this month used emergency powers to guarantee all depositors at those two banks would get their money back.

Mr. Barr is leading a review of the Fed’s supervision of SVB, which is due by May. He said in the prepared remarks that the central bank is committed to ensuring it “fully accounts for any supervisory or regulatory failings, and that we fully address what went wrong.” 

Federal Deposit Insurance Corp. Chairman Martin Gruenberg, who will also appear before the Senate Banking Committee Tuesday, plans to say that his agency will produce by May 1 a report on its supervision of Signature and a separate review of the deposit insurance system.

The regulators’ decision to guarantee all deposits at the two failed banks has prompted some banks and lawmakers to explore whether deposit insurance should be expanded beyond the $250,000 per depositor that is currently protected.

Mr. Gruenberg said the FDIC will consider policy options for changing deposit insurance levels, among other elements of the system.

Both regulators said in prepared remarks that the broader banking system is sound after the events of the past few weeks. They will be joined at the hearing and at one in the House Wednesday by Nellie Liang, a top Treasury official.

The FDIC announced early Monday that First Citizens BancShares Inc., one of the nation’s largest regional banks, is acquiring large pieces of SVB more than two weeks after the lender’s collapse sent tremors through the banking system. Regulators took control of Santa Clara, Calif.-based SVB on March 10.

Worries about American banks have centered on other regional lenders that are perceived to be at risk of deposit flight. Both SVB and Signature had large amounts of uninsured deposits. According to Mr. Gruenberg’s prepared testimony, the 10 largest deposit accounts at SVB held $13.3 billion.

Mr. Gruenberg said that banks with large amounts of uninsured deposits face challenges, “particularly in today’s environment where money can flow out of institutions with incredible speed in response to news amplified through social media channels.” He said outflows at banks that had faced deposit flight had slowed after the federal intervention for SVB’s and Signature’s depositors.

Losses to the government’s deposit insurance fund from protecting deposits at SVB are expected to be roughly $20 billion, while losses tied to Signature will cost the fund about $2.5 billion, according to Mr. Gruenberg. The government will charge banks a fee to cover those losses.

Mr. Barr said in his prepared remarks that the Fed is considering whether its bank supervisors have the tools to mitigate threats they see to a firm’s safety and soundness. He said it is also looking at whether “the culture, policies, and practices of the board and Reserve Banks support supervisors in effectively using these tools.”

He also said the Fed is weighing whether a Trump-era rollback of financial rules allowed SVB to escape more stringent stress tests and other standards. 

“We are evaluating whether application of more stringent standards would have prompted the bank to better manage the risks that led to its failure,” he said. 

The Fed is also assessing whether, if it had imposed stricter regulatory requirements, SVB would have had higher levels of capital and liquidity that would have prevented its failure or made it more resilient, Mr. Barr said. He said his review would be thorough and that his report would include supervisory assessments and exam material.

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Image: Demonstrators in Jerusalem supporting a proposal to overhaul the judiciary held Likud flags and signs reading “high court dictatorship” on Monday.Credit...Avishag Shaar-Yashuv for The New York Times

Netanyahu Cannot Be Trusted

The Israeli prime minister is acting irrationally for the first time, endangering not only Israelis but also crucial American interests and principles.

NYT By Thomas L. Friedman, March 28, 2023

Opinion Columnist

Thank goodness that Israel’s civil society has forced Prime Minister Benjamin Netanyahu to pause, for now, his attempt to impose his control over Israel’s independent judiciary and gain a free hand to rule as he wishes. But this whole affair has exposed a new and troubling reality for the United States: For the first time, the leader of Israel is an irrational actor, a danger not only to Israelis but also to important American interests and values.

This demands an immediate reassessment by both President Biden and the pro-Israel Jewish lobby in America. Netanyahu essentially told them all: “Trust the process,” “Israel is a healthy democracy” and, in a whisper, “Don’t worry about the religious zealots and Jewish supremacists I brought into power to help block my trial for corruption. I will keep Israel within its traditional political and foreign policy boundaries. It’s me, your old pal, Bibi.”

They wanted to trust him, and it all turned out to be a lie.

From Day 1, it has been obvious to many of us that this Israeli government would go to extremes that none before it ever dared. With no real guardrails, it would take the United States and world Jewry across redlines they never imagined crossing, while possibly destabilizing Jordan and the Abraham Accords, eliminating hope of a two-state solution and bringing Israel in its 75th anniversary year to the edge of civil war.

That is because the key to implementing the government’s radical agenda was always, first, getting control over Israel’s Supreme Court — the only legitimate independent brake on the ambitions of Netanyahu and his extremist coalition partners — through a process disguised as “judicial reform.”

With the judiciary brought to heel, Israel would be governed more like elected autocracies, such as Hungary and Turkey, than the Israel the world has always known. And Netanyahu and his partners have pursued that kind of political control of the courts over and above any other priority they ran on, bringing the country to the brink of “civil war” — as Netanyahu admitted in his national address on Monday night.

Staring in the face of such a civil war — after an unprecedented weekend revolt by a huge cross-section of Israeli society, its armed forces and even some members of his own party — Netanyahu offered to suspend his takeover efforts and give roughly a month for negotiations with the opposition to see if a compromise can be forged.

Let’s see what happens. But one thing is clear already: Netanyahu has become the definition of an irrational actor in international relations — someone whose behavior we can no longer predict and whose words President Biden should not trust. For starters, the U.S. needs to make sure Netanyahu does not use U.S. weapons to engage in any kind of war of choice with Iran or Hezbollah without the full and independent endorsement of Israel’s military high command, which has opposed his judicial putsch.

Why do I insist that Netanyahu has become an irrational actor and a danger to our interests and values? It’s a question that can be answered with a question:

How would you describe an Israeli prime minister and his son who, after 50 years of the United States sending Israel billions and billions of dollars in economic and military assistance, have been disseminating the lie that the U.S. government was behind the massive demonstrations against the prime minister — that this couldn’t possibly be an authentic grass-roots mainstream protest? It had to be U.S.-funded.

Yair Netanyahu, his father’s closest political adviser, last week shared conspiratorial tweets with his many Twitter followers on the Israeli right, The Jerusalem Post reported, like this one: “The American State Department is behind the protests in Israel, with the aim of overthrowing Netanyahu, apparently in order to conclude an agreement with the Iranians.”

I wonder where that came from? Well, two weeks ago, The Times of Israel reported that while Netanyahu the elder was on an official visit to Rome, a “senior official” in his traveling party (which everyone in the Milky Way galaxy knows is code for the prime minister himself) was quoted as saying (without a shred of evidence): “This protest is financed and organized with millions of dollars. … This is a very high-level organization.” The story continued: “Another member of the premier’s entourage confirmed that the senior official was referring to the United States.”

This is the same conspiracy thinking that Iran’s leaders have been deploying to discredit the authentic democracy movement in Iran, led by Iranian women.

That Netanyahu and his son would turn on America with the same pathetic cynicism as Iran is shameful — and crazy. Neither man should be allowed into America until they apologize.

This is not the only sign of what an irrational actor Netanyahu has become. Ask yourself: What rational Israeli prime minister would risk fracturing his military — which this judicial takeover attempt has been doing — at a time when Iran can now whip up enough fissile material for a nuclear bomb in under two weeks, and is racking up diplomatic achievements with Israel’s Arab allies?

A little over a week ago, Netanyahu’s defense minister, Yoav Gallant, a respected military leader who began as a naval commando, gave the prime minister a choice: freeze his attempt at a judicial coup without a national dialogue or go ahead with it, have his defense minister resign and have large segments of the army and air force reserves refuse to show up for duty.

Netanyahu then made the remarkable move of firing Gallant. As Haaretz military correspondent Amos Harel put it: “It’s hard to think of one senior defense official who wasn’t shocked to the core by Netanyahu’s decision. … Among both current and former senior I.D.F. officers, the discussion Sunday night focused on whether a mass resignation of major generals and brigadier generals was necessary to stop the madness.”

Consider this as well: What rational Israeli prime minister would risk one of the greatest achievements of U.S. and Israeli diplomacy in the Middle East, the Abraham Accords, in order to push through a judicial takeover that would give a free hand to the Jewish supremacists and nationalist zealots in his cabinet? I am talking about the likes of Netanyahu’s finance minister, Bezalel Smotrich, who, as Axios described it, last week “gave a speech in Paris at a podium featuring a map that included Jordan and the occupied West Bank as part of Israel and said the Palestinian people were ‘an invention.’”

This totally freaked out the U.A.E. and Bahrain, not to mention Jordan, which is a critical pillar of American Middle East strategy. If Netanyahu and company destabilize Jordan, they will sow the wind and reap the whirlwind.

And what Israeli prime minister would try to pass a law so he can appoint a thrice-convicted tax cheat and financial scammer — Shas Party leader Aryeh Deri — as his health and interior minister, with a promise to make him finance minister at the next cabinet reshuffle?

In 1993, Deri was ordered by the Supreme Court to resign from the cabinet over corruption charges, but he remained Shas leader until 1999, when he was sentenced to three years in prison for taking bribes. Then in 2021, as The Times of Israel reported, Deri accepted a plea deal in which he admitted “to a pair of tax offenses in exchange for resigning from the Knesset” and paying a fine. In January, the Supreme Court ruled that Deri was not fit to serve in government.

In case you missed it, besides everything else going on, Netanyahu has been trying to rush through legislation to override the Supreme Court so that this crony of his who defrauded the Israeli Treasury — to which American taxpayers have donated billions in aid to over the last half century — can eventually be put in charge of that same Treasury.

The contempt that all of this shows for Israeli taxpayers, for the rule of law in Israel, for the Israeli Supreme Court and for America is just more evidence of a leader who has come completely loose of any ethical moorings.

It is finally time that the American government, the American Congress and American Jewish leaders and lobbyists, who too often have been Netanyahu’s enablers, make it unmistakably clear that they are also marching with all those Israelis — from the military, the high-tech community, the universities, traditional religious communities, doctors, nurses, air force pilots, bankers, labor unions and even settlements — who took to the streets in the last week to ensure the 75th anniversary of Israeli democracy will not be its last.

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Image: U.S. President Joe Biden meets his Mexican counterpart Andres Manuel Lopez Obrador at North American Leader's Summit, at the National Palace in Mexico City, Mexico January 10, 2023. REUTERS/Henry Romero

Exclusive: US plans ultimatum in Mexico energy dispute, raising threat of tariffs

According to three people familiar with the negotiations, the Office of the United States Trade Representative (USTR) will present what has been dubbed a "final offer" to Mexico's negotiators in order to get it to open its markets and accept more oversight.

REUTER By Jarrett Renshaw and David Lawder

March 27 (Reuters) - The Biden administration plans to send Mexico an "act now or else" message in coming weeks in an attempt to break a stalemate in an energy trade dispute as bipartisan calls grow for the U.S. to get tougher with its southern neighbor, according to people familiar with the discussions.

The move would represent a significant escalation in already-strained tensions between U.S. President Joe Biden and his Mexican counterpart, Andres Manuel Lopez Obrador.

Obrador's decision to roll back reforms aimed at opening Mexico's power and oil markets to outside competitors sparked the trade dispute.

The Office of the United States Trade Representative (USTR) is expected to make what was described as a "final offer" to Mexico negotiators to open its markets and agree to some increased oversight, three people familiar with the talks told Reuters. If not, the U.S. will request an independent dispute settlement panel under the Unites States Mexico Canada Agreement, or USMCA, they said.

The United States and Canada demanded dispute settlement talks with Mexico in July, 250 days ago. Under USMCA rules, after 75 days without a resolution they were free to request a dispute settlement panel, a third party that rules on the case.

At an event on Monday, Mexico's Economy Minister Raquel Buenrostro said the United States has been entitled to call for a panel since Oct. 3.

If the panel rules against Mexico and it fails to take corrective action, Washington and Ottawa could ultimately impose billions of dollars in retaliatory tariffs on Mexican goods.

The White House has hoped to avoid escalating trade tensions with Mexico as it sought help on immigration and drug trafficking. But months of talks have yielded little progress and the administration has run out of less-combative options, the sources told Reuters.

Raising the stakes in the dispute carries significant risk for Biden, who is expected to launch a re-election bid in coming weeks and will face Republican criticism over his handling of immigration and drug trafficking. Biden needs Mexican help to control the border after COVID-era restrictions are lifted on May 11.

A U.S. official acknowledged growing frustration with the lack of progress in the discussions. "We want to see clear progress on this issue and address the concerns that have been raised by our negotiating teams," said the official, who declined to be named because the discussions were private.

A USTR spokesperson declined comment on the energy consultations with Mexico, but Trade Representative Katherine Tai hinted at possible escalation during a Senate Finance Committee hearing on Thursday when questioned about the talks.

"We are engaging with Mexico on specific and concrete steps that Mexico must take to address the concerns set out in our consultations request. This is still very much a live issue," Tai said.

She later added: "We know that all the tools in the USMCA are there for a reason."

U.S. oil companies, such as Chevron (CVX.N) and Marathon Petroleum (MPC.N), along with solar and wind power companies, have struggled to get permits to operate in Mexico in recent years.

Mexico's Buenrostro said the challenges of transitioning to renewable energy and getting those projects connected to the power grid were at the bottom of the issue.

"It is not that they are being given discriminatory treatment, it is that we have difficulties of a technical nature," Buenrostro said, adding investments in power distribution were being made to address the issues.

The potential move by the Biden administration comes just weeks after USTR escalated another trade dispute with Mexico over its plans to ban genetically modified corn for human consumption, requesting formal consultations. The energy dispute is a step ahead under the USMCA's enforcement mechanism.

The Biden administration alleges Obrador is favoring state oil company Petroleos Mexicanos (Pemex) and national power utility Comision Federal de Electricidad (CFE), and discriminating against U.S. companies.

"I think you're going to increasingly see folks looking for ... the next step of establishing a panel relatively soon," a congressional aide said, noting patience on Capitol Hill over the talks was wearing thin.

Ron Wyden, a Democrat senator from Oregon and chair of the Senate Finance Committee, told Tai on Thursday that Mexico was "flouting" its USMCA obligations by shutting out U.S. renewable energy firms.

"Eight months have passed. American clean energy producers are still waiting for access. In my view, it’s long past time to say enough is enough and escalate this into a real dispute settlement case," Wyden said.

U.S. imports from Mexico totaled $455 billion in 2022 against exports of over $324 billion, for a record U.S. trade deficit of $130.5 billion, according to government data.

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Image: ETIENNE LAURENT/SHUTTERSTOCK

The House GOP Moves on Energy

Will Democrats in swing districts and states oppose a bill to expand production?

TWSJ By The Editorial Board, March 26, 2023

President Biden’s energy policy is summed up by last year’s $370 billion gift to the climate lobby, aka the Inflation Reduction Act. That leaves an opening for Congress, where House Republicans unveiled their energy agenda this month. The plan should have a shot if self-described moderate Democrats stand by their claims.

Majority Leader Steve Scalise’s Lower Energy Costs Act includes reforms to unburden energy producers and cut costs for consumers. It would repeal the Energy Department’s power to block cross-border purchases and sales of natural gas, letting producers import and export without months of preapproval.

The move is inspired by Congress’s elimination of the oil-export ban in 2015, which helped U.S. producers become the global leader as domestic drilling surged. Progressives urged President Biden to ban natural-gas exports last year before an expected price spike in the winter, but trade amid global shortages boosts investment and increases supply.

The bill also promotes the production of minerals that are critical to manufacturing, especially for electric vehicles. It allows the Energy Department to grant easements lasting up to 50 years for mineral extraction, and it reduces the federal fee on sales.

The bill’s most important plank reforms permitting, which stymies projects of all kinds—renewable energy and fossil fuels—and has become a national embarrassment. The bill mandates a one-year time limit to determine whether a project will have a significant environmental impact, and a two-year maximum for extensive reports on certain projects’ effects. It also streamlines the process for lawsuits that activists use to kill projects by delaying them for years. The bill requires opponents to opine during the public comment period before suing, limits their suit to the topic of their comment, and gives them 120 days to file.

House Republicans also plan to block wasteful and counterproductive programs in the Inflation Reduction Act. Their bill would repeal the fee that the last Congress imposed on methane emissions, which takes effect next year at $900 per metric ton and rises to $1,500 in 2026. The fee will be an obstacle to production for smaller companies. The new bill would also cancel the $27 billion “green bank,” which is gearing up to fund local climate-friendly investments with federal dollars. It is pure green pork.

Majority Leader Chuck Schumer denounced the House bill as “dead on arrival” in the Senate. Yet cheaper energy is popular and is a broad cause on Capitol Hill. Such vulnerable Senators as West Virginia’s Joe Manchin and Kyrsten Sinema of Arizona may feel pressure to give the plan a fair hearing. Republicans John Barrasso and Shelley Moore Capito will lead the push in the Senate and could explore the possibility of a compromise.

Stranger political things have happened. If House Republicans pass the bill and pick up the votes of some House Democrats, who knows how the politics might evolve if energy prices spike as an election approaches. Republicans campaigned on promoting more U.S. energy production and distribution, and the Scalise bill honors that promise.

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In this photo made from video provided by the Russian Defense Ministry press service on Tuesday, March 28, 2023, a Russian navy boat launches an anti-ship missile test in the Peter The Great Gulf in the Sea of Japan. AP

Russia fires anti-ship missiles at mock target in Sea of Japan

Russia's Pacific fleet drills came a week after Japanese Prime Minister Fumio Kishida visited Ukraine.

Le Monde with AFP, NOW 

In this photo made from video provided by the Russian Defense Ministry press service on Tuesday, March 28, 2023, a Russian navy boat launches an anti-ship missile test in the Peter The Great Gulf in the Sea of Japan. AP

Russia's defence ministry said on Tuesday, March 28, that its navy had fired test anti-ship missiles at mock targets in the Sea of Japan during military exercises.

Russia's Pacific fleet drills came a week after Tokyo's Prime Minister Fumio Kishida visited Ukraine.

"In the waters of the Sea of Japan, missile boats of the Pacific Fleet fired Moskit cruise missiles at a mock enemy sea target," the ministry said on Telegram early on Tuesday. It said two ships took part in the exercise.

"The target, located at a distance of about 100 kilometers, was successfully hit by a direct hit from two Moskit cruise missiles."

Moscow said its naval aviation oversaw the "safety of the combat exercise."

Last week, Russia said two of its Tu-95 strategic bomber planes performed "flights in the airspace over neutral waters in the Sea of Japan."

The bomber jet flights came after Japan's Kishida visited Kyiv to meet with Ukrainian leader Volodymyr Zelensky.

Japan has joined Western allies in sanctioning Russia over its offensive in Ukraine. Russia's far eastern Pacific coast is separated from Japan by the narrow Sea of Japan.

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: A Russian Iskander-E missile launcher on display during the International Military Technical Forum in Moscow in August. CBC NEWS.

NATO criticizes Putin for 'dangerous' rhetoric over Belarus nuclear weapon deployment

Putin says the move does not violate any nonproliferation agreements and that he’s not doing anything the U.S. hasn’t done for decades in stationing its weapons in Europe.

CBC NEWS by Leila Sackur

NATO called his rhetoric “dangerous and irresponsible,” while Ukraine accused President Vladimir Putin of making Belarus a “nuclear hostage” with his announcement that Russia was going to store tactical nuclear weapons in the country, which both nations border.

Insisting that such a move would not violate nuclear nonproliferation agreements, in an interview with state television on Saturday, Putin likened his plans to the U.S. stationing its weapons in Europe.

“There is nothing unusual here,” he said, adding that “the United States has been doing this for decades.” He added that Russia and Belarus had agreed to “do the same thing, without, I would like to highlight, going against our international duties and agreements on the nondistribution of nuclear weapons.”

Russia would not be transferring control of the weapons to Belarus, he said, although he added that his country was planning to complete the construction of a storage facility for them by the summer.

Moscow had already stationed 10 aircraft capable of carrying tactical nuclear weapons in the country, he said. He added that a number of Iskander tactical missile systems that can launch nuclear weapons had also been stationed in the country.

The Iskander-M contains two guided missiles with a range of up to 300 miles and can carry conventional or nuclear warheads.

Putin said that Belarusian President Alexander Lukashenko had long requested the deployment. There was no immediate reaction from Lukashenko.

Belarus, Ukraine and Kazakhstan had nuclear weapons stationed on their territory but handed them over to Russia after the 1991 collapse of the Soviet Union, so this could be the first time since then that Russia has based such weapons outside the country.

American reaction to Putin’s announcement was muted. National Security Council spokesperson Adrienne Watson told NBC News late Saturday that the U.S. had “not seen any reason to adjust our own strategic nuclear posture nor any indications Russia is preparing to use a nuclear weapon.”

But Oleksiy Danilov, the secretary of Ukraine’s National Security and Defense Council, tweeted that the Kremlin “took Belarus as a nuclear hostage.”

U.S. and NATO criticize Russia’s plan to store nuclear weapons in Belarus

While the Belarusian army has not formally fought in Ukraine, the country has a close relationship with Russia, and Minsk allowed Moscow to use its territory to send troops into Ukraine last year. The two nations have stepped up joint military training. Russia is also Belarus’ largest and most important political and economic partner.

Calling Russia’s nuclear rhetoric “dangerous and irresponsible,” NATO spokesperson Oana Lungescu said the organization was “closely monitoring the situation.”

“We have not seen any changes in Russia’s nuclear posture that would lead us to adjust our own,” Lungescu said. “We are committed to protect and defend all NATO allies.” NATO added that Moscow had “consistently broken its arms control commitments,” most recently suspending its participation in the New START Treaty — a key nuclear arms control treaty between the U.S. and Russia, the world’s two largest nuclear powers.

Hamish de Bretton-Gordon, a former commanding officer of Britain and NATO’s joint chemical, biological, radiological and nuclear regiment called the plan a “strategic error” and “another sign of desperation coming out of the Kremlin,” after 13 months of war in Ukraine and few victories to show for it.

“It seems that Putin is clutching at straws,” he said, adding that Russian forces had been “hammered” around Bakhmut, where brutal battles for control of the eastern city have raged for months, with neither side gaining much ground.

Moving such weapons closer to NATO nations like Germany, Poland and Lithuania was likely to “hasten Western weapons” to Ukraine, he said. Germany, which has previously been cautious about providing military aid to Ukraine, “might be encouraged” by the potential threat of closer nuclear weapons, he added.

For Keir Giles, the author of a forthcoming report on Russia’s nuclear threat for Chatham House, an international affairs think tank in London, the biggest threat from the weapons was to Belarus itself. 

“There’s a long tradition of Putin saying what he wants Belarus to do and claiming 'Belarus asked us,' but not a peep about it from Minsk,” he said.  

“This is not in the category of ‘escalation to scare us,’ it’s more ‘what they have always wanted to do and now Belarus is not in a position to resist anymore,” he said.

De Bretton-Gordon agreed. “Belarus is now a target in a nuclear standoff, an unintended consequence Lukashenko has not fully appreciated,” he said, adding that the announcement might embolden opposition voices in Belarus, who have long been against the war. 

And Svetlana Tsikhanouskaya, who fled Belarus in 2020 after standing against Lukashenko in a disputed presidential election that led to widespread protests across the country, took to Twitter Sunday to complain about the deal.

She said the deal had been announced on “Freedom Day — when Belarusians celebrate the 105th anniversary of Belarus’ independence,” saying that this was “not accidental.”

“Russia acts as the occupying force, violating national security and putting Belarus on the collision course with its neighbors and the international community,” she said

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Cooperate with objective and ethical thinking…

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News round-up, March 27, 2023

Reflections by the editor…

"We are our memory, we are that chimerical museum of inconstant forms, that heap of broken mirrors".

Jorge Luis Borges, (born August 24, 1899, Buenos Aires, Argentina—died June 14, 1986, Geneva, Switzerland), Argentine poet, essayist, and short-story writer whose works became classics of 20th-century world literature.

By way of the XXVIII Ibero-American Summit, held in Santo Domingo, Dominican Republic, this Saturday, March 25. On March 17, 2022, ECLAC’s executive secretary, Ms. Alicia Bárcena, delivered a keynote speech at FAO's regional headquarters. She warns us that inequality generates in Latin America, the product of a culture of privilege that restricts access and opportunities and distorts public policy.

...Latin America and the Caribbean are not the poorest regions in the world, but they remain the most unequal. She said.

The UN official also warned that:

"We are no longer in an era of change, but in a real change of era.  This requires rethinking development and putting equality at the centre.  This requires social pacts," she said.

Alicia Bárcena also discussed the profound asymmetries between developed and developing countries, exacerbated by the COVID-19 pandemic.  For example, she pointed out that Latin America and the Caribbean emit only 8.3% of global greenhouse gases but are highly vulnerable to climate change.

"There is a tremendous asymmetry, and we have forgotten the principle of common but differentiated responsibilities.  We must take positions because the evidence shows us that these asymmetries are unacceptable and that developed countries have a historical debt with developing countries,".

In the same vein, in the document published by the Inter-American Development Bank (IDB), entitled: “The trade fallout of the war in Ukraine on Latin America and the Caribbean, subscribed by Paolo Giordano and Kathia Michalczewsky, in June of last year (2022), indicates the following: 

“The Russian invasion of Ukraine is a significant shock to the global economy, unfolding as Latin America and the Caribbean (LAC) are still recovering from the pandemic.  For some countries, it may slow growth and result in a sizeable food security shock like that experienced in 2008 and 2011.  Although the impact on direct trade is expected to be limited, the indirect consequences are poised to be very relevant, if heterogeneous, across countries.  In the short term, the main channels of transmission of the disruption are the surge in the prices of food and energy, the reduction in  global growth, the rise in inflation, and possible contagion in financial markets. 

As if this were not enough:

Over the last week, there has been turmoil in the international financial markets due to the repercussions on the global banking system from the failure of Silicon Valley Bank.  This financial crisis has generated significant concerns in the banking sector worldwide and has been reflected in Latin American stock market indices.

The crisis of confidence in banks is also affecting traders in emerging countries.  In this context, the leading indices of the Latin American Integrated Market (MILA) stock exchanges have declined this week.  Colombia is the most affected, with a fall of -6.08%, followed by Chile and Mexico with -3.56% and -1.23%, respectively.

Conversely, this event could negatively impact foreign investment in the region's countries.  Investors may feel less confident about investing in these countries due to uncertainty in the banking sector.

In addition, the banking crisis may also affect lending and the financing of investment projects.  Banks may be forced to reduce lending and be more cautious in granting financing, thus harming the economy of and growth in Latin American countries.  The national banking crisis and its effects on Latin America

In conclusion, all indications are that Latin America has a good chance of continuing in its complex history of broken mirrors.

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Most read…

Morning Bid: Banks are leaking money

There is some relief that negotiations to acquire Silicon Valley Bank by First Citizens BancShares Inc. (FCNCA.O) are advanced (SIVB.O). As a further measure to reassure depositors, there was also some discussion about the Federal Reserve expanding its new lending program for banks.

REUTERS

First Citizens Bank to buy Silicon Valley Bank after collapse, FDIC says

The announcement that First Citizens, based in Raleigh, N.C., would buy the Northern California bank is a significant step in the efforts to quell the chaos that unfolded after Silicon Valley Bank collapsed this month, setting off wider unease across the global financial sector.

TWP, by Bryan Pietsch, March 27, 2023 

ANZ CEO: Banking turmoil has potential to trigger financial crisis

"It's a crisis for some obviously, but is it a financial crisis, who knows? Does it have the potential to be one? Yes, it does have the potential to be one," CEO Shayne Elliott said in an interview on the bank's website.

REUTERS by Renju Jose

In inflation-hit Germany, massive strike over pay to cripple transport

"It is a matter of survival for many thousands of employees to get a considerable pay rise," Frank Werneke, head of the Verdi labour union, told Bild am Sonntag.

REUTERS by Klaus Lauer and Tom Sims

Big Oil is selling off its polluting assets — with unintended consequences

Shell’s divestments in Nigeria help the company meet its green goals. But villagers and watchdogs say conditions have worsened after the sales.

TWP by Rachel Chason, March 27, 2023

Brazil's Lula cancels trip to China because of pneumonia

Brazil's leftist leader Luiz Inacio Lula da Silva, who was due to head to China for key talks with President Xi Jinping, has indefinitely postponed his trip to recover from pneumonia, the government said Saturday.

Le Monde with AP and AFP on March 25, 2023

Ibero-American Summit strengthens integration between the two sides of the Atlantic

The 22 countries of the Ibero-American community close the meeting in Santo Domingo with consensus on climate change, food security, and digitalization.

El País by Francesco Manetto, Santo Domingo - 26 MAR 2023 

Russia may demand compensation over Nord Stream pipeline explosions - diplomat

In an interview with the news agency, Dmitry Birichevsky, the director of the department for economic cooperation in the Russian Foreign Ministry, stated, "We do not rule out the subsequent raising of the question of compensation for damage as a result of the explosion of the Nord Stream gas pipes."

Reuters

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: A trader works at Frankfurt's stock exchange in Frankfurt, Germany, March 12, 2020. REUTERS/Ralph Orlowski

Morning Bid: Banks are leaking money

There is some relief that negotiations to acquire Silicon Valley Bank by First Citizens BancShares Inc. (FCNCA.O) are advanced (SIVB.O). As a further measure to reassure depositors, there was also some discussion about the Federal Reserve expanding its new lending program for banks.

Reuters

A look at the day ahead in European and global markets from Wayne Cole

It's been a quiet Monday so far with Asian share markets mixed but U.S. and European stock futures higher, perhaps because they got through a weekend without another bank collapsing.

There is some relief that First Citizens BancShares Inc (FCNCA.O) is in advanced talks to acquire Silicon Valley Bank (SIVB.O). There was also some talk the Federal Reserve could expand its new lending programme for banks as another step to reassuring depositors.

Money is clearly flowing out of smaller banks toward their bigger siblings and to money market funds, which have seen an inflow of more than $300 billion in the past month to a record $5.1 trillion. BofA notes the prior two events like this in 2008 and 2020 were followed by Fed rate cuts.

Fund futures now show an 88% chance the Fed stands pat in May, while a July cut is priced at better than 90%.

Deposits at small banks fell by $120 billion in the week to March 15, while borrowing jumped $253 billion and presumably much of that was from the Fed.

Capital Economics points out that deposits across all the banks have fallen by $663 billion in the past year as customers search for higher yield.

"Unless banks are willing to jack up their deposit rates to prevent that flight, they will eventually have to rein in the size of their loan portfolios, with the resulting squeeze on economic activity another reason to expect a recession is coming soon," they warn.

European banks face similar strains, with the added speculative stress on Deutsche Bank (DBKGn.DE) and a general jump in the cost of credit default swaps. Deutsche Bank's five-year CDS hit 222 bps on Friday, the highest since late 2018, while UBS CDS shot up to 139 bps.

Credit Suisse had to tap the Swiss National Bank for "a large multi-billion amount" to secure its liquidity. Not only were customers withdrawing money but counterparties were demanding guarantees to keep doing business, hardly an encouraging sign when interbank lending relies so much on trust.

Key developments that could influence markets on Monday:

- German IFO survey for March is seen around 91.0

- Bank of Spain´s Governor Pablo Hernandez de Cos delivers speech on economy. ECB Board members Frank Elderson and Isabel Schnabel speak, as does Andrew Bailey Governor of the Bank of England

- Federal Reserve Board Governor Philip Jefferson speaks on "Implementation and Transmission of Monetary Policy"

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Image: Media

First Citizens Bank to buy Silicon Valley Bank after collapse, FDIC says

The announcement that First Citizens, based in Raleigh, N.C., would buy the Northern California bank is a significant step in the efforts to quell the chaos that unfolded after Silicon Valley Bank collapsed this month, setting off wider unease across the global financial sector.

TWP, by Bryan Pietsch, March 27, 2023 

First Citizens Bank has agreed to purchase Silicon Valley Bank, which collapsed after a bank run, the Federal Deposit Insurance Corp. said Sunday.

All of Silicon Valley Bank’s 17 branches will open as First Citizens branches on Monday, the FDIC said in a release.

News in progress…

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Image: The logo of the ANZ Banking Group is displayed in the window of a branch in central Sydney, Australia, Aprl 30, 2016. REUTERS/David Gray/File Photo

ANZ CEO: Banking turmoil has potential to trigger financial crisis

"It's a crisis for some obviously, but is it a financial crisis, who knows? Does it have the potential to be one? Yes, it does have the potential to be one," CEO Shayne Elliott said in an interview on the bank's website.

REUTERS by Renju Jose

SYDNEY, March 27 (Reuters) - Australia and New Zealand Banking Group's (ANZ.AX) CEO said on Monday the latest turmoil in the global banking system had the potential to trigger a financial crisis though it was early to predict it could bring one similar to that in 2008.

Authorities around the world are on high alert for the fallout from the recent turmoil at banks following the collapse of Silicon Valley Bank (SVB) and Signature Bank (SBNY.O) in the U.S. and the emergency takeover of Credit Suisse.

"It's a crisis for some obviously, but is it a financial crisis, who knows? Does it have the potential to be one? Yes, it does have the potential to be one," CEO Shayne Elliott said in an interview on the bank's website.

But he said it was premature to assume the current condition could result in "another GFC", referring to the global financial crisis around 15 years ago that plunged the world's major advanced economies into their worst recession since the Great Depression in the 1930s.

Australian banks did not suffer as much as those in the U.S. and Britain during the 2008 crisis, thanks in part to tighter lending standards and a more resilient home economy.

"This is a different issue. This is really to do with the global war on inflation and how central banks are raising rates very quickly in order to combat that, and that has casualties," Elliott, the top executive at the country's no.4 lender, said.

Australia's banking regulator, soon after the collapse of startup-focused lender SVB, flagged it had intensified supervision of local banks.

Global regulators have acted much quicker to support banks this time, having learned lessons from the prior crises, Elliott said.

"Having said all that, it's clearly not over. I don't think you can sit here and say, 'Well, that's all done, Silicon Valley Bank and Credit Suisse and, you know, life will go back to normal'. These things tend to roll through over a long period of time."

Rachel Slade, personal banking group executive at the country's second-largest lender, National Australia Bank Ltd (NAB.AX), told the Australian Financial Review on Monday that mortgage customers had started showing first signs of strain after 10 straight rate rises, but there were no spikes yet on defaults.

Treasurer Jim Chalmers has said Australia was in a good position to hold out against some of the volatility because its banks were well capitalised, while the Reserve Bank of Australia last week flagged the banks were "unquestionably strong".

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Image: Workers protest at Munich's main train station during a nationwide strike called by the German trade union Verdi over a wage dispute in Munich, Germany, March 27, 2023. REUTERS/Lukas Barth

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In inflation-hit Germany, massive strike over pay to cripple transport

"It is a matter of survival for many thousands of employees to get a considerable pay rise," Frank Werneke, head of the Verdi labour union, told Bild am Sonntag.

REUTERS by Klaus Lauer and Tom Sims

BERLIN/FRANKFURT, March 27 (Reuters) - A massive strike in Germany was set to begin early Monday, crippling mass transport and airports in one of the biggest walkouts in decades as Europe's largest economy reels from soaring inflation.

In the hours running up to the strike, both sides dug in their heels, with union bosses warning that considerable pay hikes were a "matter of survival" for thousands of workers and management calling demands and the resulting action "completely excessive".

The strikes, which were scheduled to mainly start just after midnight and affect services throughout Monday, are the latest in months of industrial action that has hit major European economies as higher food and energy prices dent living standards.

Germany, which was heavily dependent on Russia for gas before the war in Ukraine, has been particularly hard hit by higher inflation as it scrambled for new energy sources, with inflation rates exceeding the euro-area average in recent months.

German consumer prices rose more than anticipated in February - up 9.3% from a year earlier - pointing to no let-up in stubborn cost pressures that the European Central Bank has been trying to tame with a series of interest-rate increases.

It has been a painful adjustment for millions of workers throughout the country as costs of everything from butter to rents rise after years of fairly stable prices.

"It is a matter of survival for many thousands of employees to get a considerable pay rise," Frank Werneke, head of the Verdi labour union, told Bild am Sonntag.

France has also faced a series of strikes and protests since January as anger mounts over the government's attempt to raise the state pension age by two years to 64.

But officials in Germany have made clear that their fight is only about pay.

The Verdi union is negotiating on behalf of around 2.5 million employees in the public sector, including in public transport and at airports. Railway and transport union EVG negotiates for around 230,000 employees at railway operator Deutsche Bahn (DBN.UL) and bus companies.

Verdi is demanding a 10.5% wage increase, which would see pay rising by at least 500 euros ($538) per month, while EVG is asking for a 12% raise or at least 650 euros per month.

Deutsche Bahn on Sunday said the strike was "completely excessive, groundless and unnecessary".

Employers are also warning that higher wages for transport workers would result in higher fares and taxes to make up the difference.

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Image: Oil from illegal extraction in Bodo, Nigeria, shines on water after a spill. (Andrew Esiebo for The Washington Post)

Big Oil is selling off its polluting assets — with unintended consequences

Shell’s divestments in Nigeria help the company meet its green goals. But villagers and watchdogs say conditions have worsened after the sales.

TWP by Rachel Chason, March 27, 2023

NEMBE, Nigeria — When Lambert Ogbari learned that the oil giant Shell was selling its local operations to a Nigerian firm, he said he felt hopeful his living conditions would finally improve. But he quickly noticed that maintenance on the oil wells surrounding his village had declined.

Then, one night, Ogbari woke up to a loud bang, followed by the smell of gas. Crude oil was shooting out of a well near his home with such force that people hundreds of yards away could hear the roar.

As the world wrestles with climate change, major oil companies are selling off polluting assets around the globe. Shell, which announced in 2021 that it is looking to exit Nigeria’s onshore market completely, has repeatedly said in annual reports over the past eight years that divestments in Nigeria and elsewhere have played an important role in decreasing the company’s own greenhouse gas emissions. Shell’s withdrawal is part of an exodus by some of the world’s top energy companies from the Niger Delta, which had long made Nigeria the largest oil producer in Africa.

But interviews with residents, local officials and environmental groups show the divestments made in Nigeria over the past decade have had negative consequences for communities that Shell and other international companies leave behind — and for the environment they say they are aiming to protect.

Local companies that have acquired the Niger Delta assets from international firms have failed to respond quickly to oil spills such as the one in Nembe, environmental activists say. Greenhouse gas emissions from gas flaring — the burning off of natural gas, a byproduct of oil extraction — have increased dramatically in multiple cases after Nigerian companies took over, according to data from flare tracker Capterio and reports by the Environmental Defense Fund and Stakeholder Democracy Network. At the same time, according to several analyses by these two groups and others, information about those effects has become scarce, because the local companies tend to make fewer environmental commitments and set fewer reporting standards.

In the Nembe area, where villages emerge from the thick mangrove swamps, oil sprayed for more than a month before the local company stopped the leak, villagers recalled. On a recent afternoon, 15 months after the spill was cleaned up, nearby water was still covered with an oil sheen, and mangrove roots were cloaked in black. Fishermen are still catching just a tiny fraction of what they once were, Ogbari said, his voice raised in anger, and locals say they have seen their already poor health deteriorate.

“We were excited to see our brothers in control,” Ogbari said, referring to the purchase in 2015 of Shell’s local oil license by the Aiteo Group, a Nigerian company. “We thought they would understand our needs. … But it has gone from bad to worse.”

Rethinking Nigeria’s oil

The Niger Delta’s history with oil began in the 1930s, when Shell started exploration here. Shell exported its first barrel of oil in 1958, when Nigeria was still a British colony. Oil giants including ExxonMobil, Chevron, Eni and Total Energies arrived in Nigeria over the years that followed, entering into arrangements with the government that proved extremely lucrative for the state and oil companies but did little for average Nigerians. The Niger Delta, according to the United Nations, became one of the most polluted places on Earth.

The international companies began a first wave of divestments around 2010, according to Etienne Kolly, associate director at S&P Global Commodity Insights. Oil theft by gangs and militants was proving a massive headache, and Nigeria’s government was pushing for more local ownership in the industry.

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Image: São PauloSão Paulo, Brazil - 10, 16, 2022: Former President Luís Inácio Lula da Silva and President Bolsonaro participate in presidential debate on Brazil. Germán & Co by Shutterstock. 

Brazil's Lula cancels trip to China because of pneumonia

Brazil's leftist leader Luiz Inacio Lula da Silva, who was due to head to China for key talks with President Xi Jinping, has indefinitely postponed his trip to recover from pneumonia, the government said Saturday.

Le Monde with AP and AFP on March 25, 2023

Brazil’s President Luiz Inácio Lula da Silva has canceled his trip to China after contracting pneumonia, the presidential palace said on Saturday, March 25.

Lula, 77, was admitted to a hospital in the capital of Brasilia with flu-like symptoms and was diagnosed with “bacterial and viral bronchopneumonia due to influenza A,” the palace said in a statement, quoting a medical note signed by Dr. Ana Helena Germoglio. The leftist leader’s health was reassessed on Saturday and, despite improvement, he was advised to “postpone the trip to China until the cycle of viral transmission ends,” the medical note said. His press office later confirmed that the trip had been canceled.

Chinese authorities have been informed, “with the reiteration of the desire to schedule the visit on a new date,” the palace said.

Lula had been expected to leave for China on a multi-day visit on Friday or Saturday, but the trip was pushed back on Friday.

China is Brazil’s biggest trade partner

A delegation composed of ministers, senators, lawmakers and hundreds of businessmen had been set to accompany Lula during his first state visit to Brazil’s biggest trade partner since taking office in January. The Brazilian president and his Chinese counterpart Xi Jinping were scheduled to meet next Tuesday.

Trade, investment and climate change were on the agenda and 20 bilateral agreements had been expected to be signed, according to a statement Thursday from the presidential palace.

Lula, who rarely postpones or cancels trips due to health reasons, traveled to Argentina in January and the US in February, marking a departure from Brazil’s foreign policy under former far-right President Jair Bolsonaro, who showed little interest in international affairs or travel abroad.

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Luis Abinader, President of the Dominican Republic and the King of Spain Felipe VI. El País by Mónica González Islas.

Ibero-American Summit strengthens integration between the two sides of the Atlantic

The 22 countries of the Ibero-American community close the meeting in Santo Domingo with consensus on climate change, food security, and digitalization.

El País by Francesco Manetto, Santo Domingo - 26 MAR 2023 

The Ibero-American Summit in Santo Domingo (Dominican Republic) concluded on Saturday night with a central message of cohesion that strengthens the path towards regional integration and a rapprochement between the two sides of the Atlantic. The 28th meeting of the 22 countries of the community showed the vocation of this forum as opposed to other international conferences that are more conditioned by the corset of diplomacy. The debate revealed ideological severe clashes, and there were even clashes of accusations between Latin American countries. But the essential thing was the consensus of all members on a series of instruments that consolidated the alliance. The Santo Domingo Declaration adopts three planned documents: climate change, food security, and digitalization. Peace, even without directly mentioning the Russian invasion of Ukraine, the severe crisis in Haiti, and migration were other key challenges.

The Ibero-American Secretary General, the Chilean diplomat Andrés Allamand, called for "maintaining Ibero-America as a privileged space for dialogue, political articulation, consensus, and cooperation." Under this umbrella, the discussion of presidents, heads of state, vice presidents, and foreign ministers highlighted that dialogue could prosper and unity can be tested despite differences.

At the summit, for example, an essential agreement on reforming an international financial architecture and access to credit fell through, frustrated by the opposition of Cuba, whose president, Miguel Díaz-Canel, charged against the "bubbles of financial capitalism." However, the community of Ibero-American countries has pledged to continue trying, with a view to the next summit to be held on 29 November 2024 in Quito, and issued a brief communiqué that stresses "the need for a structural reform of the international financial architecture, which allows a greater flow of resources destined for sustainable development and expands the limits of access that Ibero-American countries have in terms of financing." The text questions the "loan overcharges" and calls for the adoption of "innovative financial instruments, with conditions that facilitate sustainable borrowing."

Russia's invasion of Ukraine was another of the discussions that indirectly hovered over the summit. Chile's president, Gabriel Boric, openly condemned it in his speech, calling it "unacceptable." However, achieving a unanimous and explicit position in a forum that, in addition to Cuba, includes countries such as Nicaragua, Venezuela, Bolivia, and El Salvador, which did not condemn Russian President Vladimir Putin's offensive at the UN, was an arduous task. Everything was thus left in a pact of minimums through references to peace on the international chessboard. In it, everyone pledges to work for "comprehensive, just and lasting peace throughout the world," respecting "the principles of the Charter of the United Nations, including the principles of sovereign equality and territorial integrity of states, which will also contribute to ending the adverse effects of war, including loss of life, food, financial, energy and environmental security crises."

How to help Haiti

The humanitarian crisis in Haiti, a country bordering the Dominican Republic, cornered by criminal gangs and sinking into a whirlwind of corruption, misery, and the absence of the state, was an unavoidable urgency at the Santo Domingo meeting. The situation, aggravated by the assassination of President Jovenel Moïse in July 2021, prompted the local government, headed by Luis Abinader, to ask for support. "There is no other way to help Haiti than to go and pacify Haiti," he said. The Costa Rican leader threw a wrench in the debate with a call for international responsibility. The paragraph included in the final declaration recognizes the need for multilateral mobilization, although it does not mention a peacekeeping force. "We call on the international community and international organizations to join efforts to find a way out of this complex crisis, based on the principles of solidarity and international cooperation, with the consent and participation of Haiti," the text states.

The Summit was attended by 13 delegations headed by their heads of state or government - in the case of Spain and Portugal, they were represented twice by the King, the president, and the prime minister, respectively - three vice-presidents, five foreign ministers, and only Mexico delegated the defence of its positions to a director general of the Ministry of Foreign Affairs. The most significant absence was that of Andrés Manuel López Obrador, whose government also failed to send a foreign minister to other international meetings. Luiz Inácio Lula da Silva excused himself because he had scheduled a trip to China, which was finally postponed due to pneumonia. And Nicolás Maduro, as usual, kept his attendance unknown until the end, which was finally cancelled due to suspicion of Covid-19 infection.

Migration, the challenge that affects us all

All the leaders, present and absent, must face a daily challenge that affects the entire region: migration. Most of the more than seven million Venezuelans who left searching for opportunities have settled in Latin American countries, mainly Colombia, Peru, Chile, and Ecuador. Between Colombia and Panama, hundreds of people risk their lives every day crossing the Darién jungle, one of the planet's most inhospitable and dangerous territories. Thousands of migrants pile up on Mexico's southern and northern borders while the US Supreme Court is pending a decision on Title 42, a measure allowing hot returns to Mexico. The Santo Domingo Declaration advocates "safe, orderly and regular migration" but at the same time calls for "mechanisms that guarantee adequate management of migratory flows, agile and accessible migration regularisation processes, the socio-economic integration of migrants, support for host communities and the coordinated fight against transnational organised crime." With these premises, a forum on migration will be held in Ecuador in the second half of this year.

Borrell: a "key" year for relations between Europe and Latin America

The European Union's High Representative for Foreign Policy, Josep Borrell, took part in the 28th Ibero-American Summit as a special guest. In his speech, Borrell pointed out that 2023, which will coincide with the Spanish Presidency of the Council of the EU in the second half of the year, will be a "key" year for relations between Brussels and Latin America. He said that both the Santo Domingo meeting and the Summit of the Community of Latin American and Caribbean States (CELAC) scheduled for next July send "a powerful message and show our desire for greater collaboration." "It will be the first EU-CELAC summit since 2015. We have done something wrong for so much time to have passed without sharing a common reflection," he said.

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Cooperate with objective and ethical thinking…

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Image: Germán & Co

Russia may demand compensation over Nord Stream pipeline explosions - diplomat

In an interview with the news agency, Dmitry Birichevsky, the director of the department for economic cooperation in the Russian Foreign Ministry, stated, "We do not rule out the subsequent raising of the question of compensation for damage as a result of the explosion of the Nord Stream gas pipes."

Reuters

MOSCOW, March 27 (Reuters) - Moscow may seek compensation over damage from last year's explosions on the Nord Stream gas pipelines, news agency RIA Novosti reported on Monday, citing a Russian diplomat, who also said that the future of the projects was unknown.

The pipelines, which connect Russia and Germany under the Baltic Sea, were hit by unexplained blasts last September in what Moscow called an act of international terrorism.

"We do not rule out the later raising of the issue of compensation for damage as a result of the explosion of the Nord Stream gas pipelines," Dmitry Birichevsky, the head of Russia's Foreign Ministry department for economic cooperation, said in an interview with the news agency.

He did not say from whom Russia would seek damages over the incidents at the pipelines, which were jointly able to export 110 billion cubic metres (bcm) of gas per year, more than Russia's total gas exports of 101 bcm outside the former Soviet Union in 2022.

Birichevsky also said the future of the pipelines was not clear.

"At the moment, it's very difficult to speak about the future of the Nord Stream pipelines system. On the whole, according to experts, the damaged lines could be restored," he said.

The Kremlin has said it was for all shareholders to decide whether the Nord Stream pipelines should be mothballed.

Sources familiar with the plans told Reuters last week that the ruptured Nord Stream 1 and Nord Stream 2 pipelines, built by Russia's state-controlled Gazprom (GAZP.MM), were set to be sealed up and mothballed as there were no immediate plans to repair or reactivate them.

Nord Stream 1 had started operations in November 2011 having cost 7.4 billion euros ($8 billion). Construction of the $11 billion Nord Stream 2 was completed in September 2021, but it never entered into operations after Germany shunned the project days before Russia sent troops into Ukraine on Feb. 24, 2022.

Birichevsky added that Western countries were opposing a Russia-prepared draft U.N. Security Council resolution urging an independent international investigation of the Nord Stream blasts.

"Despite this, we intend to continue to insist on a comprehensive and open international investigation with the mandatory participation of Russian representatives," Birichevsky said.

News round-up, March 24, 2023

Reflections by the editor…

Calligrammes; “poèmes de la paix et da la guerre”, 1913-1916, by Guillaume Apollinaire; 1918; Paris.

Guillaume Apollinaire, (26 August 1880 – 9 November 1918) was a French poet, playwright, short story writer, novelist, and art critic of Polish descent. Apollinaire is considered one of the foremost poets of the early 20th century, as well as one of the most impassioned defenders of Cubism and a forefather of Surrealism. He is credited with coining the term "Cubism" in 1911 to describe the emerging art movement, the term Orphism in 1912, and the term "Surrealism" in 1917 to describe the works of Erik Satie. He wrote poems without punctuation attempting to be resolutely modern in both form and subject. Apollinaire wrote one of the earliest Surrealist literary works, the play The Breasts of Tiresias (1917), which became the basis for Francis Poulenc's 1947 opera Les mamelles de Tirésias.

while we may call snow a flute — which among all the flutes
of language is the finest stem — the deepest well to hide
sounds, the fanfares of interwar silence, so beloved of the lieu-
tenant: who tells his soldiers to study the military trade

snow in the business of war is no fault of flutes or fanfares
a plane flies like an angel through the heavens, scattering the feathers
of the hawk’s victim wrapped in white, like a cut-out sheet of darkness
nervously sealing the holes in the flute’s ragged corpse

perhaps in that music between silver and bronze — all snow and water —
it rises like a sail, like a ship’s pitch-covered bottom —
the lieutenant forgets orders and hallucinates: the almonds will flower
and the soldiers melt like snow through the village, seeking port wine

lucid in his dreams, he bleeds from his head — Apollinaire
has forgotten something — in the end he’ll ask for pickled cabbage juice,
but there are no villagers here, the angel of death arrives, opens the door
shuts his eyes, wraps him in music, and then cuts loose

his boat on the river, the soldiers bring wine, sit downcast on the hilltop,
make a tent from their rifles and pull dried bread from their pockets
washing it down with their wine, sadness and surrealism —
death is here — all around them lurk ravens and foxes

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Most read…

Humanity Is Facing a Great Injustice.

The World Bank Must Respond…

The World Bank and the donor countries that control it can do more to step up and tackle this generational challenge.

NYT By The Editorial Board, March 18, 2023

No Trump bump in New Hampshire as possible criminal charges loom

The vice chair of the Republican Party in Belknap, the most red county in the state, Lambert said, "With my primary vote I want to make sure that I put somebody up that I can agree with, that supports my principles, but is also electable." Lambert supported for Trump in both 2016 and 2020.The vice chair of the Republican Party in Belknap, the most red county in the state, Lambert said, "With my primary vote I want to make sure that I put somebody up that I can agree with, that supports my principles, but is also electable." Lambert supported for Trump in both 2016 and 2020.

Reuter By Nathan Layne

Geothermal Power, Cheap and Clean, Could Help Run Japan. So Why Doesn’t It?

For decades, new plants have been blocked by powerful local interests, the owners of hot spring resorts, that say the sites threaten a centuries-old tradition.

NYT by Hiroko Tabuchi, Photographs and Video by Chang W. Lee

Tabuchi and Lee traveled across Japan to understand the resistance to a valuable energy source in the climate fight.

Scotland's offshore wind winners set to cut North Sea carbon emissions

Initial investments from BP's Alternative Energy Investments and TotalEnergies total 1,670,917 pounds each

Reuters

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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CreditCredit...Illustration by Rebecca Chew/The New York Times; photographs by Getty Images

Humanity Is Facing a Great Injustice.

The World Bank Must Respond…

The World Bank and the donor countries that control it can do more to step up and tackle this generational challenge.

NYT By The Editorial Board, March 18, 2023

The editorial board is a group of opinion journalists whose views are informed by expertise, research, debate and certain longstanding values. It is separate from the newsroom.

It’s one of the great injustices of this era that countries contributing negligible amounts to global carbon emissions are now feeling the most harrowing impacts of climate change. Pakistan, which makes up less than 1 percent of the world’s carbon footprint, had a third of its territory under water in last year’s floods. Parts of Kenya, Ethiopia and Somalia are experiencing the worst drought in 70 years of record-keeping, threatening millions with famine, even though the entire continent of Africa contributes less than 4 percent of global carbon emissions. Small island developing countries such as Papua New Guinea account for less than 1 percent of global carbon emissions, yet they stand to lose the most when sea levels rise.

The World Bank and the donor countries that control it can do more to step up and tackle this generational challenge. To make the World Bank and other multilateral lending institutions fit for purpose in the 21st century, leaders need to figure out how to raise and leverage the massive amounts of capital that are going to be necessary in the coming years to help countries adapt to and mitigate a changing climate.

For years, climate financing took a back seat to the bank’s twin goals of reducing extreme poverty and promoting shared prosperity. Today, it is integral to achieving those goals. Helping the poorest of the poor will increasingly mean ensuring access to drought-resistant seeds and access to water as lakes dry up. In middle-income countries, promoting shared prosperity will increasingly mean expanding access to reliable, affordable clean energy. The World Bank has played an active role in making progress in those areas. It has begun to help countries incorporate climate change into their overall economic development plans and should continue this necessary work.

Climate-related funding has already grown in importance at the bank; in fact, some of the poorest countries are already worried that it will cut into funding for basics like education and health care. That’s why additional funding is needed to assure them that taking global action on climate won’t come at the expense of their development. About 36 percent of the money the World Bank lent last year was classified as climate related, although questions have been raised about how classifications are made. That comes to nearly $32 billion — a big jump from previous years, but still far short of what is needed.

In 2009, donor countries promised to mobilize $100 billion a year by 2020 to help lower income countries with mitigation and adaptation. They only mustered $83 billion, $36.9 billion of which came from multilateral development banks and climate funds, in 2020. Those unfulfilled promises haven’t gone unnoticed. According to Ephraim Mwepya Shitima, chair of the African Group of Negotiators on climate change, many developing countries, including those in Africa, have put forth ambitious plans to curb emissions in the future, but have been “hampered by the pledged financial support, which are falling short of expectations.”

A changing climate, a changing world

Climate change around the world: In “Postcards From a World on Fire,” 193 stories from individual countries show how climate change is reshaping reality everywhere, from dying coral reefs in Fiji to disappearing oases in Morocco and far, far beyond.

The role of our leaders: Writing at the end of 2020, Al Gore, the 45th vice president of the United States, found reasons for optimism in the Biden presidency, a feeling perhaps borne out by the passing of major climate legislation. That doesn’t mean there haven’t been criticisms. For example, Charles Harvey and Kurt House argue that subsidies for climate capture technology will ultimately be a waste.

The worst climate risks, mapped: In this feature, select a country, and we'll break down the climate hazards it faces. In the case of America, our maps, developed with experts, show where extreme heat is causing the most deaths.

What people can do: Justin Gillis and Hal Harvey describe the types of local activism that might be needed, while Saul Griffith points to how Australia shows the way on rooftop solar. Meanwhile, small changes at the office might be one good way to cut significant emissions, writes Carlos Gamarra.

Although Covid, inflation and the energy crisis related to the war in Ukraine have strained government budgets everywhere, it would be shortsighted to ignore the significance and potential of investing in climate financing. According to Devesh Kapur, a professor at Johns Hopkins and co-author of a history of the World Bank, raising an additional $100 billion in lending capacity for the World Bank could require donors to put up about $20 billion in cash. The cost to the United States, which holds 16 percent of shares, would be $3.2 billion, an amount that could be paid out over five years.

Getting new money in the door is important, but it’s not enough. The bank also should adopt new strategies and new rules that will allow it to funnel money more quickly to where it is needed the most and will be used most effectively. For instance, some small island states have per capita incomes that are too high for concessional loans according to World Bank rules, despite their acute vulnerability to climate change. Those rules should be revisited, in some cases, to make sure that climate financing is prioritizing the areas that will make the biggest difference.

The bank should also provide more grants and below-market financing related to climate, as Senator Ed Markey of Massachusetts has called for. The World Bank and multilateral development banks provided only 15 percent of their adaptation finance and less than 5 percent of mitigation finance through grants — a fraction he called “shockingly low.” By comparison, Green Climate Fund, a multilateral climate fund, issued grants 41 percent of the time for adaptation and mitigation projects.

The transformation that is required at the World Bank will not be easy. But the departure of its former president, David Malpass, who says he will resign in June, might help build confidence in the bank’s climate work. Mr. Malpass, who was nominated by the Trump administration in 2019, has been the subject of controversy since his bewildering public refusal last year to acknowledge the role of human activity in extreme weather resulting from climate change.

Ajay Banga, the former chief executive of Mastercard, is President Biden’s nominee to lead the bank, and is likely to be confirmed next month. The leadership change presents an opportunity to clarify the bank’s role and lay out an ambitious vision for its future. Mr. Banga, who has recently visited several African countries, has said that he sees the bank’s goals of addressing poverty, shared growth and climate as “intertwined.”

Treasury Secretary Janet Yellen, who has been at the forefront of calls to overhaul the bank and to elevate the issue of climate, also noted the need for more concessional financing in a recent speech at the Center for Strategic and International Studies. The bank was designed to lend to individual countries to spur economic growth within their own borders, but that model doesn’t work to address global problems like climate change, she said, because the benefits “stretch far beyond the borders of the country where a given project takes place.”

If the benefits of investing in climate change adaptation and mitigation are shared, so should the costs.

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Image: Germán & Co

No Trump bump in New Hampshire as possible criminal charges loom

The vice chair of the Republican Party in Belknap, the most red county in the state, Lambert said, "With my primary vote I want to make sure that I put somebody up that I can agree with, that supports my principles, but is also electable." Lambert supported for Trump in both 2016 and 2020.The vice chair of the Republican Party in Belknap, the most red county in the state, Lambert said, "With my primary vote I want to make sure that I put somebody up that I can agree with, that supports my principles, but is also electable." Lambert supported for Trump in both 2016 and 2020.

Reuter By Nathan Layne

LACONIA, New Hampshire, March 24 (Reuters) - Longtime Donald Trump supporter Doug Lambert agrees with the former president that the potential criminal charges he faces in New York are being cooked up by his enemies on the left. But, Lambert worries about the "messiness" of a Trump presidential candidacy and is leaning towards voting for someone else.

Like other Republicans in New Hampshire, which traditionally holds the second nominating contest in presidential election years, Lambert, 58, the owner of a manufacturing company, will be among the earliest to weigh in on Trump's viability for the Republican nomination in 2024.

"With my primary vote I want to make sure that I put somebody up that I can agree with, that supports my values, but is also electable," said Lambert, who voted for Trump in both 2016 and 2020 and is vice chair of the Republican Party in Belknap, the state's reddest county.

"If I was voting today I would vote for Ron DeSantis," he said, referring to the Florida governor who has not yet officially announced a White House run but is seen as a leading contender for the nomination and is Trump's biggest challenger.

Trump has sought to solidify support for his candidacy by presenting himself as a victim of a politically motivated investigation by New York prosecutors that could lead to his indictment for alleged hush money payments he made to porn star Stormy Daniels during his 2016 election campaign. Trump has denied making the payments.

But interviews with a dozen Republican voters in Belknap this week found that while Trump supporters still held affection for the former president and were considering his candidacy, many were also looking at who else is in the field.

A majority of those interviewed said they agreed with Trump's allegations - for which he has offered no evidence - that Democrats were using the legal system to hurt his candidacy, but none saw the indictment as a persuasive argument to firmly back him.

Nearly all said they were also interested in DeSantis, who is visiting New Hampshire next month, as well as their own state's governor, Chris Sununu, who is flirting with a run.

"I think our governor here in New Hampshire would be a very good choice. He's a real level-headed guy," said Raymond Peavey, 56, a former Marine who voted for Trump twice but wants to assess the other candidates before committing to him again.

POLLING IS MIXED

Benefiting from a large field of candidates and tapping into the angst of working-class voters, Trump handily won the New Hampshire primary in 2016 in a prelude to victories across the Northeast and ultimately the Republican nomination.

With at least 10 months to go before the primary, surveys have provided a mixed picture of Trump's chances in 2024.

In a University of New Hampshire poll in January, likely Republican voters preferred DeSantis over Trump by a 12-point margin, 42% to 30%, with Sununu at 4%. That contrasts with an Emerson College poll released this month before Trump announced he would be arrested that showed the former president with 58% support in the state, trouncing DeSantis at 17%.

Dante Scala, a politics professor at the University of New Hampshire, said he believed most Republican voters would shrug off any charges brought by Manhattan District Attorney Alvin Bragg, a Democrat who Trump has accused of reviving a case already reviewed by federal prosecutors for political ends.

"But when you get to the case in Georgia or indictments concerning January 6th, they might be more serious problems," he said, referring to a Fulton County, Georgia investigation into Trump's efforts to overturn the 2020 election results there and a separate federal probe into his role in the Jan. 6, 2021 attack by his supporters on the U.S. Capitol.

"The more indictments, the more points of leverage a DeSantis or whoever can use to make the case against Trump."

Even with its relatively small population of 1.4 million, New Hampshire has for decades held the second nominating contest in presidential election cycles, giving its voters outsized influence in the pivotal early days of White House campaigns.

While Trump is seen as having a lock on 25-30% of Republican voters, there are signs across the country that many Republicans are looking for an alternative candidate who can achieve conservative policy wins but without the drama the real estate magnate brought to the White House.

Political strategists and analysts say if Trump is charged he may succeed in rallying diehard supporters to his side but that independents and Republican moderates will almost certainly distance themselves.

Prudy Veysey, a Republican from Belknap, is hoping her state will send an early message on Trump's viability.

"We’ve seen the chaos and the havoc," said the 63-year-old retired office manager who has never voted for the former president. "It's just time to move on from Trump."

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Image: Chang W. Lee is a staff photographer. He was a member of the staff that won two 2002 Pulitzer Prizes: one for Breaking News Photography and the other for Feature Photography. Follow him on Instagram @nytchangster. 

Geothermal Power, Cheap and Clean, Could Help Run Japan. So Why Doesn’t It?

For decades, new plants have been blocked by powerful local interests, the owners of hot spring resorts, that say the sites threaten a centuries-old tradition.

NYT by Hiroko Tabuchi, Photographs and Video by Chang W. Lee

Tabuchi and Lee traveled across Japan to understand the resistance to a valuable energy source in the climate fight.

A treasured getaway for travelers in Japan is a retreat to one of thousands of hot spring resorts nestled in the mountains or perched on scenic coasts, some of which have been frequented for centuries.

All are powered by Japan’s abundant geothermal energy. In fact, Japan sits on so much geothermal energy potential, if harnessed to generate electricity, it could play a major role in replacing the nation’s coal, gas or nuclear plants.

For decades, however, Japan’s geothermal energy ambitions have been blocked by its surprisingly powerful hot spring owners.

“Rampant geothermal development is a threat to our culture,” said Yoshiyasu Sato, proprietor of Daimaru Asunaroso, a secluded inn set next to a hot spring in the mountains of Fukushima Prefecture that is said to date back some 1,300 years. “If something were to happen to our onsens,” he said, using the Japanese word for hot springs, “who will pay?”

Japan, an archipelago thought to sit atop the third-largest geothermal resources of any country on earth, harnesses puzzlingly little of its geothermal wealth. It generates about 0.3 percent of its electricity from geothermal energy, a squandered opportunity, analysts say, for a resource-poor country that is in desperate need of new and cleaner ways of generating power.

A solitary hot spring at Yoshiyasu Sato’s property in the mountains of Fukushima Prefecture.

Mr. Sato, who leads the Society to Protect Japan’s Secluded Hot Springs, and the monitoring gear he installed.

A small geothermal site near a hot spring resort in Oguni, Japan.

One answer to that puzzle lies in Japan’s venerable hot springs like the one at the inn run by Mr. Sato. For decades, inns like his have resisted geothermal projects out of fears that they will damage their mineral-rich hot springs.

In a pre-emptive move, Mr. Sato has fit Asunaroso with monitoring equipment that tracks water flows and temperatures in real time, and is pushing for onsens across the country to do the same. He has led the opposition to geothermal development as the chairman of an organization that translates loosely as the Society to Protect Japan’s Secluded Hot Springs.

Understand the Latest News on Climate Change

Running out of time. A new report by the Intergovernmental Panel on Climate Change, a body of experts convened by the United Nations, said that Earth is likely to cross a critical threshold for global warming within the next decade, and nations will need to make an immediate and drastic shift away from fossil fuels to prevent the planet from overheating dangerously beyond that level.

A species in danger. Federal officials said that sunflower sea stars, huge starfish that until recently thrived in waters along the west coast of North America and that play a key role in keeping marine ecosystems balanced, are threatened with extinction and should be protected under the Endangered Species Act.

PFAS chemicals. The E.P.A. announced that the U.S. government intends to require utilities to remove from drinking water perfluoroalkyl and polyfluoroalkyl substances, part of a class of chemicals known as PFAS. Exposure to the chemicals, which are found in countless household items, has been linked to cancer, liver damage and other health effects.

Measuring droughts and deluges. Scientists have long cautioned that warming temperatures would lead to wetter and drier global extremes such as severe rainfall and intense droughts. A new study that used satellites that can detect changes in gravity to measure fluctuations in water shows where that may already be happening.

Bureaucrats in Tokyo, Japan’s giant electrical utilities and even the nation’s manufacturing giants have been no match. “We can’t forcibly push a project forward without the proper understanding,” said Shuji Ajima of the Tokyo-based Electric Power Development Company, also called J-Power, which operates just one geothermal plant in Japan, accounting for 0.1 percent of its power generation. The utility has been forced to give up on a number of geothermal projects in past decades.

“Geothermal plants are never going to be game-changers, but I believe they can still play a role in carbon-free energy,” he said.

‘It’s All the Things Japan Needs’

Hot springs are a small miracle of nature, fed by rainwater that seeps into the rock that is heated by the earth’s interior before bubbling up to the surface, a process that takes years, even decades.

More than 13,000 onsen inns and baths dot the country. There are strict rules, displayed in numerous languages on posters plastered on onsen walls. No bathing suits. No soapy bodies allowed. And an additional Covid-era requirement, “mokuyoku,” or silent bathing — no chatter in the baths.

Geothermal power plants, on the other hand, draw on wells drilled deeper in the earth’s crust, pumping up steam and hot water to power giant turbines that generate electricity. Developers say that because plants draw from sources deep beneath onsen springs, there is little possibility one will affect the other.

Still, the interconnection between hot springs and deeper geothermal heat remains something of a mystery. When hot spring flows change, it’s often difficult to pin down a cause.

“We don’t yet fully understand the full consequences of geothermal development, said Yuki Yusa, a professor emeritus and expert in geothermal sciences at Kyoto University.

Japan, the world’s fifth-largest emitter of planet-warming gases, needs more clean energy to meet its climate goals and to rein in its dependence on fossil fuel imports. Much of its nuclear power program remains shuttered after the 2011 Fukushima nuclear disaster. Geothermal power’s green credentials, combined with its relatively low cost and its ability to produce electricity consistently round the clock, have made it a promising source of renewable energy.

The Japanese government, which seeks to triple the country’s geothermal capacity by 2030, has tried to smooth the way for more projects by opening up geothermal development in national parks and speeding up environmental assessments.

If Japan were to develop all of its conventional geothermal resources for electricity production, it could provide about 10 percent of Japan’s electricity, according to the Institute for Sustainable Energy Policies in Tokyo. That would be more electricity than Japan generated from hydropower, solar, wind or nuclear in 2019.

“It’s domestic, it’s renewable,” said Jacques Hymans, an energy expert at the University of Southern California. “It’s all the things Japan needs.”

But across Japan, local governments have recently introduced a fresh round of restrictions. Kusatsu, an onsen resort town north of Tokyo, passed an ordinance last year that would place the onus on developers seeking the town’s approval to prove that a geothermal project wouldn’t affect local hot springs, a difficult hurdle. Oita, a prefecture that has more onsen springs than any other in Japan, recently expanded a no-drill zone in the city of Beppu, considered Japan’s onsen capital.

“We understand the nation’s energy needs,” said Yutaka Seki, an executive director at the National Hot Spring Association, which represents inns nationwide. “We aren’t opposed to geothermal energy for the sake of opposing it,” he said. “But we strongly caution against unchecked large-scale development.”

A Town Defined by Steam

In Beppu, steam is everywhere. It courses through its streets and envelopes its townhouses.

For decades, large hotels, inns, and even private residences drew from the region’s onsens, severely depleting the thermal spring resources. Most of its onsens now use pumps to force hot water from the ground.

Steam rises from the streets of Beppu, a resort town on the southern island of Kyushu.

There’s so much steam in Beppu that some restaurants use it to cook.

“Blood Pond Hell,” a thermal pool in Beppu that is naturally red from minerals and geothermal heat.

Large-scale geothermal development is out of the question. “We’re talking about what we must do to sustain Beppu’s culture, its established way of life,” said Hidehiko Hida, head of the city office responsible for onsens.

Some 40 miles away stands a rarity: A big geothermal plant. It’s the nation’s largest. But it’s also four decades old, and Kyushu Electric, the regional utility, hasn’t been able to build plants of a similar scale since.

“It’s difficult to find a place that’s willing to say yes,” said Takanori Senju, who heads the utility’s geothermal survey team.

A generous government policy that pays above-market prices for geothermal power has more recently spurred a flurry of smaller geothermal projects. But most plants built since the policy was adopted are tiny, powering perhaps just a few hundred homes. That way they can avoid environmental assessments and restrictions.

But they’re too little to have a significant effect on Japan’s overall energy market, experts say.‌

Signs of Change

The Abe Ryokan resort in the town of Yuzawa.

Yuzawa, in the snowy northern province of Akita, is a rare example of a hot spring town that has embraced geothermal energy.

An early developer, Dowa Mining, involved local community leaders in its planning, hiring the city’s best graduates, sending officials to local festivals and even offering to drill springs for local onsens. The local government, for its part, was eager to foster a new industry in a remote region of Japan. A local milk farmer now uses the hot spring water to pasteurize his milk and yogurt.

Japan had hoped for more Yuzawas. The nation opened its first commercial, large-scale geothermal power plants in 1966, and in the following decades operators added about a dozen more, including one in Yuzawa. But with rising local opposition from hot spring inns, Japan has added almost no geothermal capacity since the 1990s. 

That’s even as Japanese manufacturing giants, like Toshiba, have come to dominate the global market for geothermal turbines. Very little of their business is on their home turf.

A shop in Yuzawa uses geothermal power to pasteurize milk and yogurt.

“I can’t say I’m not concerned,” said Masami Shibata, owner of the Abe Ryokan resort.

A bather at Abe Ryokan.

So in 2019, when Japan’s first large geothermal plant in 23 years opened in Yuzawa, with the ability to power almost 100,000 homes, it was a breakthrough.

The toughest challenge facing any geothermal project in Japan isn’t related the geology or technology, said Shun Iwata, a retired Dowa Mining executive who embedded in Yuzawa for nearly two decades to bring locals round on the idea. He is now an adviser to the city. “What’s more important is working on the community and building relationships,” he said.

Even in Yuzawa, though, there has been controversy. Since late 2020, a local inn has had to periodically close after its spring dwindled.

Yuzawa city maintains the city’s geothermal development wasn’t the cause.

“I can’t say I’m not concerned,” said Masami Shibata of Abe Ryokan, one of Yuzawa’s hot spring inns. Still, geothermal energy has become a part of Yuzawa city’s fabric, she said. “I think it’s possible for both hot springs and geothermal to coexist.”

Hiroko Tabuchi is an investigative reporter on the Climate desk, reporting widely on money, influence and misinformation in climate policy. @HirokoTabuchi • Facebook

Chang W. Lee is a staff photographer. He was a member of the staff that won two 2002 Pulitzer Prizes: one for Breaking News Photography and the other for Feature

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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General view of the Walney Extension offshore wind farm operated by Orsted off the coast of Blackpool, Britain September 5, 2018. REUTERS/Phil Noble//File Photo

Scotland's offshore wind winners set to cut North Sea carbon emissions

Initial investments from BP's Alternative Energy Investments and TotalEnergies total 1,670,917 pounds each

Reuters

LONDON, March 24 (Reuters) - BP (BP.L), TotalEnergies and UK renewable companies were among 13 awarded leases to develop offshore wind to supply power mainly to North Sea oil and gas platforms to lower the sector's emissions, Crown Estate Scotland said on Friday.

The 13 were chosen from 19 bidders for agreements to start offshore wind development work for total initial investment of around 260 million pounds ($317.28 million).

Those set to be the biggest investors are Flotation Energy and Cerulean Winds, who are spending respectively almost 96 million pounds Sterling and 138 million pounds.

BP's Alternative Energy Investments is set to initially invest 1,670,917 pounds and TotalEnergies 200,000 pounds.

The Crown Estate is an independent commercial business that oversees the seabed around Britain.

Through a leasing process called INTOG (Innovation and Targeted Oil and Gas), it aims to attract investment in innovative offshore wind projects in Scottish waters to help decarbonise North Sea operations.

The maximum capacity of all the projects that are awarded contracts to supply power to oil and gas installations is 5 gigawatts (GW), and 500 megawatt (MW) for smaller innovative projects, Crown Estate Scotland said.

Crown Estate Scotland will offer a seabed lease of 25 to 50 years for these projects, it said.

Britain is a world leader in wind power, which generated a record amount of energy in the country in 2022, supplying more than 25% of its electricity, National Grid says.

As the largest renewable source in Britain, offshore wind can power about 40% of UK homes, the Crown Estate said

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Cooperate with objective and ethical thinking…

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News round-up, March 23, 2023

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Most read…

The Fed, Still Inflation-Focused, Raised Rates Amid Bank Uncertainty

Federal Reserve officials raised interest rates by a quarter-point while they noted that bank turmoil could help slow the economy.

NYT by Jeanna Smialek

Donald Trump Grand Jury Is Called Off for Wednesday

Panel’s activities are closely watched as hush-money investigation nears its end

TWSJ by Corinne Ramey and Jennifer Calfas

Big Oil Eyes New Deals in North Africa Amid Rising Energy Demand

Halliburton and Honeywell in advanced talks to develop oil fields and refineries in Libya; Eni importing more oil and gas from Algeria

“North Africa’s massive oil-and-gas reserves and its proximity to Europe make it an attractive alternative energy supplier to Russia.

By Chao Deng and Benoit Faucon, March 23, 2023

Xi’s delay of Siberia pipeline signals limits to his embrace of Putin

Putin is desperately scouting for hungry new gas markets after Russia lost the bulk of its most important export market, Europe, following his invasion of Ukraine. That loss included Putin’s ill-considered move to cut gas supplies to Germany through a significant pipeline last year.

TWP By Robyn Dixon, March 22, 2023

Corporate profits: Macron favors 'exceptional contribution' over tax

The government wants to require companies that employ more than 5,000 people and that are buying back shares to better share profits with employees.

Le Monde by Elsa Conesa and Audrey Tonnelier, published on March 23, 2023

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Note: The rate since December 2008 is the upper limit of the federal funds target range. Source: Federal Reserve. By Karl Russell

The Fed, Still Inflation-Focused, Raised Rates Amid Bank Uncertainty

Federal Reserve officials raised interest rates by a quarter-point while they noted that bank turmoil could help slow the economy.

NYT by Jeanna Smialek

WASHINGTON — Federal Reserve officials raised interest rates by a quarter-point on Wednesday as they tried to balance two conflicting problems: the risk that inflation could remain rapid and the threat that turmoil in the banking system could slow the economy drastically.

The Fed on Wednesday pushed interest rates to a range of 4.75 percent to 5 percent, and officials forecast one more rate increase in 2023 — though they hinted even that was uncertain. In doing so, policymakers tried to signal that they remained focused on wrestling down price increases but were also paying attention to financial threats.

“In assessing the need for further hikes, we’ll be focused on incoming data and the evolving outlook, and in particular on our assessment of the actual and expected effects of credit tightening,” Jerome H. Powell, the Fed chair, suggested at his post-meeting news conference.

The Fed’s statement said that some additional rate moves “may be” warranted, and Mr. Powell emphasized that “may” was crucial: Officials do not know that yet.

His comments underlined that the outlook for whether rates would rise further — and, if so, by how much — had been made uncertain by turmoil in the banking industry that could make loans harder to come by, slowing the economy.

Officials forecast that next year they would lower rates more slowly than they had anticipated, so that rates linger at 4.3 percent by the end of 2024, up from 4.1 percent. That suggested that the fight for stable inflation could be a longer and more gradual one than many had expected even a few months ago, though the outlook is complicated by the bank turmoil.

The forecasts and Mr. Powell’s remarks together underlined that his central bank is confronting a complicated moment — and trying to buy itself the time to decide how to react.

The Fed has raised interest rates at the fastest pace since the 1980s over the past year to try to cool a hot economy. Yet inflation has been surprisingly stubborn, and the job market remains strong. Those facts would likely have called for a more aggressive Fed response.

But high-profile bank collapses in recent weeks have underscored the risk that rapid Fed rate moves could stoke financial instability. Silicon Valley Bank, which failed on March 10, did so partly because it had amassed big losses on its portfolio of securities as interest rates climbed. And even more critically, the bank problems threaten to weigh on lending and spending, which ramps up the risk of a recession.

“The bottom line is: Credit conditions are going to tighten, and the Fed is acknowledging that,” said Diane Swonk, the chief economist at KPMG. The Fed “would like a slow cooling,” she added. “They just don’t want a deep freeze. And this increases the chances that the economy falls through the ice.”

Stocks, which initially jumped after the Fed’s decision was announced, fell sharply on Wednesday, finishing the day down 1.65 percent as investors digested the Fed’s interest rate move and comments by Janet Yellen, the Treasury secretary, suggesting that the government was not looking into a plan to extend broad protection for uninsured deposits.

The continuing jitters about the banking system come at a time when the economy has otherwise appeared strong — in spite of the Fed’s policy adjustments.

The Fed has been rapidly raising its policy interest rate since March 2022, making it more expensive to borrow money in hopes of cooling spending and eventually weighing down inflation. Officials made four straight three-quarter-point rate increases last year before slowing to a half-point in December and a quarter-point in early February.

Just two weeks ago, many economists and investors thought central bankers might speed their rate moves back up at this meeting because incoming economic data had retained so much momentum. Policymakers had hinted that they might revise up their forecasts for how much interest rates would rise in 2023.

“As of a couple of weeks ago, it looked like we’d need to raise rates — over the course of the year — more than we’d expected,” Mr. Powell acknowledged on Wednesday.

But the Fed chair explained that the bank problems had changed the outlook. By making it harder for consumers to access credit to buy houses or cars, or make other big purchases, the issues could weigh on demand, allowing the Fed to adjust interest rates less drastically.

“Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation,” the Fed’s policy committee said in its post-meeting statement. “The extent of these effects is uncertain.”

Economists at Goldman Sachs estimate that the effect could be equivalent to the slowdown prompted by one or two Fed rate increases. Mr. Powell seemed to suggest during his news conference that his estimate — while far from clear — was in that ballpark.

“You can think of it as being the equivalent of a rate hike, or perhaps more than that,” he said. “Of course, it’s not possible to make that assessment today with any precision whatsoever.”

How the Fed’s projections for future interest rates have evolved

The evolution of the federal funds target rate from March 2018 to March 2023. As of March 2023, the target rate is 5 percent. The latest projections show, on average, an increase by the end of 2023 and decreases in subsequent years.

But even with a bank-induced hit to the economy, the process of restoring stable inflation could take time.

Policymakers expected rapid price increases to be a more lasting problem, based on their fresh economic estimates. Officials thought inflation would finish 2023 at 3.3 percent, up from 3.1 percent in their December projections. That inflation measure was 5.4 percent in January.

Central bankers aim for 2 percent inflation on average over time. While price increases have been slowing from very elevated levels last year — the Fed’s preferred inflation index peaked at about 7 percent last summer — that progress has not been as steady as many hoped.

Continued price increases are weighing on family budgets, and there is a risk that a long period of quick inflation could make price increases a more permanent feature of the American economy.

That is what central bankers are trying to avoid. By lifting rates quickly over the past year, they have hoped to cool growth and bring inflation under control promptly. While brisk monetary policy adjustments increase the risk of financial turmoil and other problems, central bankers have worried that inflation will be harder and more painful to stamp out if it becomes entrenched in daily household and business behavior.

Once people are used to asking for big pay raises to cover climbing costs, and companies are used to making regular price increases, it could take a bigger economic downturn to rewire those habits and change the course of price increases.

“We have to bring inflation down to 2 percent,” Mr. Powell said. “The costs of failing are much higher.”

Jerome H. Powell said that the Federal Reserve raised interest rates to combat inflation amid turmoil in the banking system.CreditCredit...T.J. Kirkpatrick for The New York Times

A critical question is whether the Fed will be able to slow the economy enough to cool inflation without a recession. Mr. Powell suggested that he still thought such a “soft landing” was possible — though he acknowledged that the recent banking upheaval has not helped.

“I think that pathway still exists,” Mr. Powell said. “We’re certainly trying to find it.”

Wall Street analysts have pointed out that the risks are greater in a world with financial turmoil, given that problems in the banking sector can easily spill over to hit Main Street.

“You have the trigger that can make it into a deeper recession — can make it into a hard landing,” said Priya Misra, the head of global rates strategy at TD Securities.

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Image: Germán & Co

Donald Trump Grand Jury Is Called Off for Wednesday

Panel’s activities are closely watched as hush-money investigation nears its end

TWSJ by Corinne Ramey and Jennifer Calfas

The Manhattan grand jury investigating Donald Trump’s role in a hush-money payment to a porn star was instructed not to meet Wednesday, according to people familiar with the matter, delaying any potential indictment of the former president.

The district attorney’s office notified court officials Tuesday night about the change in plans, the people said. The grand jury is now scheduled to reconvene Thursday, according to the people. It wasn’t clear what prompted the change.

A spokeswoman for Manhattan District Attorney Alvin Bragg said the office couldn’t comment on grand-jury matters. 

The change in schedule was earlier reported by Insider.

The grand jury’s activities have been closely watched as the hush-money investigation into Mr. Trump, run by Mr. Bragg, nears its end. The jury could still hear from additional witnesses, or prosecutors could formally present charges, which is the final step before the panel votes on whether to indict.

Any potential indictment wouldn’t be public until it is unsealed by a judge. While the timing of any possible surrender by Mr. Trump is unknown, law-enforcement officials said they anticipated it likely wouldn’t happen this week.

Mr. Trump has said he didn’t do anything wrong and accused Mr. Bragg, a Democrat, of damaging his electoral prospects. On Tuesday he criticized Michael Cohen, a key potential prosecution witness who served as his personal lawyer at the time of the payment, on the eve of the 2016 presidential election. “In the history of our Country there cannot have been a more damaged or less credible witness at trial than fully disbarred lawyer and felon, Michael Cohen,” Mr. Trump wrote on his social-media network. Over the weekend, he called on his supporters to protest.

Meanwhile, police have erected barricades around and near a lower Manhattan courthouse as people in the city and across the U.S. await the grand jury’s vote. Very few demonstrators of any political persuasion had gathered by mid-day Wednesday. Television-news crews packed the sidewalks near the court building, while reporters and a handful of lookers-on awaited the potential arrival of witnesses. A tour guide chaperoning a group past the scene asked the scrum, “any Trump sightings yet?”

On a street corner across from the city’s Collect Pond Park, California painter John Paul Marcelo contemplated his canvas, adding a stroke of pale yellow to capture the late-morning light shining on the court buildings he was painting. “It’s the first time in American history that this is happening,” he said, referring to the potential indictment of a former president. “And if it does happen, I feel like that’s a super rare thing to paint.”

The New York Police Department said it was ready to respond to any protests or counter protests. A department representative said there would be an uptick in uniformed officers in each of the city’s five boroughs. New York City Mayor Eric Adams said Monday the city was monitoring comments on social media and police were “making sure that there’s no inappropriate actions in the city.”

The grand jury has been hearing testimony about the payment to porn star Stormy Daniels and its aftermath since late January. Robert Costello, a lawyer who briefly advised Mr. Cohen, appeared Monday at the request of Mr. Trump’s lawyers. He told reporters after his testimony that in 2018, Mr. Cohen said the payment to Ms. Daniels was intended to protect Mr. Trump’s wife.

Mr. Cohen has said publicly that Mr. Trump told him to pay Ms. Daniels to keep her from going public about an alleged affair with Mr. Trump, which he denies.

Prosecutors have considered charging Mr. Trump with falsifying business records because reimbursements to Mr. Cohen were falsely labeled as legal expenses.

All of the major players involved in the payment, including Mr. Cohen, have testified before the grand jury. While Ms. Daniels has met virtually with prosecutors, she hasn’t appeared before the panel.

At Trump Tower in Midtown Manhattan Wednesday morning, barricades were present at the Fifth Avenue building, as well as at stores across the street. Inside, Trump Tower’s lobby was open to the public with a couple of police officers by the entrance.

Law-enforcement officials met this week to make security plans and the Secret Service is working with local authorities on discussions.

In Washington, D.C., the Metropolitan Police Department was monitoring the situation, according to a spokesman. He said he wasn’t aware of any plans related to the possible indictment. A representative for Capitol Police said Tuesday the department “cannot discuss potential security plans.”

—James Fanelli  and Will Parker contributed to this article.

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Image: TWSJ

Big Oil Eyes New Deals in North Africa Amid Rising Energy Demand

Halliburton and Honeywell in advanced talks to develop oil fields and refineries in Libya; Eni importing more oil and gas from Algeria

“North Africa’s massive oil-and-gas reserves and its proximity to Europe make it an attractive alternative energy supplier to Russia.

By Chao Deng and Benoit Faucon, March 23, 2023

CAIRO—After years of underinvestment in North Africa’s energy infrastructure, global oil-and-gas giants from Halliburton Co. and Chevron Corp. to Eni SpA are ramping up their presence in the region as demand from Europe grows.

Executives in the industry are betting it is worth drilling again in some of the hardest places to do business in the world as Europe increasingly turns to other sources for its energy needs after shunning its main supplier, Russia, over the invasion of Ukraine. In recent months, a string of European officials have visited the region to help advance talks over potential supply deals.

Halliburton and Honeywell International Inc. are hammering out $1.4 billion worth of deals to develop an oil field and refinery with National Oil Corporation in Libya, which has the largest known oil reserves in Africa, according to the chairman of state-owned firm, Farhat Bengdara. Italy’s Eni is planning investments aimed at replacing nearly half of the gas it was importing from Russia with gas from Algeria.

Chevron is also looking to seal an energy exploration deal in Algeria, The Wall Street Journal reported last month. In January, the U.S. oil major announced a sizable natural-gas discovery in Egypt.

“North Africa has been slow to develop its potential because of political risks, either related to insecurity or bureaucracy,” said Geoff Porter, president of U.S.-based North Africa Risk Consulting Inc. But with Europe needing to replace Russian energy, “this is their moment,” he said.

Western oil executives say they see a more stable political climate in North Africa, especially in countries such as Libya where fighting between local militias has been subdued in the past two years following nearly a decade of civil war. Many American firms had pulled back from the region, viewing it as politically too risky, to focus on shale production at home. The region’s proximity to Europe and massive reserves, with Algeria holding the third-largest recoverable shale resources in the world, also make doing business there worth the risk, they say.

At the same time, state-owned firms in the North African region have been eager to strike deals, as they see an opportunity to fill a gap left by Russia and take advantage of higher global commodity prices. Some countries, such as Egypt, are eager to bring in additional revenue from selling energy, as their economies struggle with higher import costs including for food. The Ukraine war has disrupted shipments and pushed up global commodity prices.

“I think we can be a good replacement for Russian gas to Europe,” NOC’s Mr. Bengdara said.

Farhat Bengdara, chairman of National Oil Corporation in Libya, which he says has the largest known oil reserves in Africa.

The Libyan state-owned company is expected to soon sign a $1 billion agreement with Halliburton that will allow the U.S. firm to rebuild the al-Dhara oil field, according to Mr. Bengdara. The oil field in central Libya was destroyed by Islamic State militants in 2015 and is now run by ConocoPhillips and TotalEnergies SE, Mr. Bengdara said. It would be one of the biggest deals for the U.S. oil-services giant clinched in the Middle East and North Africa in recent years.

Halliburton and Total didn’t respond to requests for comment. ConocoPhillips declined to comment.

Libya’s NOC and Honeywell are set to unveil a contract related to the construction of a refinery in southern Libya, Mr. Bengdara and a spokesman for the American firm said. The initial deal, expected to be announced this weekend, is for the design of the plant, the spokesman said, which would be followed by a $400 million pact to build the entire plant.

Libya relies heavily on its oil resources for income, although it has struggled for years to turn its own crude into motor fuel, making it largely dependent on costly gasoline imports.

As of last year, the North African nation was divided politically again, with a United Nations-appointed prime minister, Abdul Hamid Dbeibeh, remaining in control of the capital Tripoli and a rival prime minister taking charge of the country’s east. The country is again pushing to hold presidential and legislative elections this year, after plans fell through in 2021.

State-owned firms in the North African region have been eager to strike deals with Europe.

Still, there have been no serious clashes since last summer and its eastern government in recent months has unlocked some of the budget needed by the state oil company to clinch deals with international companies.

Secretary of State Antony Blinken told a senate committee on Wednesday that the U.S. was actively working to reopen an embassy in Libya, in part so it could better support the prospect of Libyan elections. The U.S. shut its embassy in Tripoli in 2014 following violent clashes between militias.

The U.S. also pressured a top Libyan commander in mid-January to expel Russia’s paramiliatry Wagner Group, the Journal reported last month, amid fears the unit may tap into the country’s oil riches. Khalifa Haftar, commander of a faction that controls eastern Libya, is aligned with the government in Tripoli.

“There is recognition in the U.S. that Libya is a workable environment,” said Mr. Porter, who advises U.S. oil companies in the region. He added that firms now see it as “an environment in which you can operate reasonably safely, where you can more predictably invest in ways that you could not have a few years ago.”

NOC exports most of its gas to Europe through a pipeline from Libya to Italy. Over the next three to five years, it aims to increase oil production to 2 million barrels a day, from around 1.2 million currently, and to produce 4 billion standard cubic feet of gas a day, up from roughly 2.6 billion.

In January, NOC and Eni, which produces the majority of the country’s gas, signed an $8 billion deal for the Italian energy giant to develop two gas fields to pump 850 million cubic feet a day for 25 years. Under the agreement, production of gas will start in 2025, ramping up to full capacity of 850 million cubic feet a day by 2026.

In Algeria, Eni is aiming to export an additional 3 billion cubic meters of gas annually, starting this year, to help make up for gas that used to flow from Russia. Algeria will become the firm’s top region for investment in the next four years.

“Algeria is a reliable partner of absolute strategic importance,” said Italian Prime Minister Giorgia Meloni during a visit to Algiers in January.

From Egypt, Eni aims to export three billion cubic meters of liquefied natural gas to Italy starting this year, after regas capacity was built up on the receiving end. That compares with roughly 1 billion cubic meters being exported last year.

Egypt’s ability to export gas is limited given the growing electricity demand of its more than 100 million population. It doesn’t have any pipelines to Europe. Still, the country has ambitions to become a hub for energy distribution in the Mediterranean, importing more gas from Israel and exporting liquefied gas on ships to Italy.

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Image: Snow covers sections of pipework at Gazprom's Atamanskaya compressor station near Svobodny, Russia, on Dec. 11, 2019. (Andrey Rudakov/Bloomberg News)

Xi’s delay of Siberia pipeline signals limits to his embrace of Putin

Putin is desperately scouting for hungry new gas markets after Russia lost the bulk of its most important export market, Europe, following his invasion of Ukraine. That loss included Putin’s ill-considered move to cut gas supplies to Germany through a significant pipeline last year.

TWP By Robyn Dixon, March 22, 2023

Snow covers sections of pipework at Gazprom's Atamanskaya compressor station near Svobodny, Russia, on Dec. 11, 2019. (Andrey Rudakov/Bloomberg News)

RIGA, Latvia — Russian President Vladimir Putin this week called the Power of Siberia pipeline, which carries Russian gas to China, the “deal of the century.” But Putin’s hopes of swiftly securing a sequel of the century — the giant Power of Siberia 2 — deflated over two days of talks with Chinese leader Xi Jinping this week.

Putin is desperately scouting for hungry new gas markets after Russia lost the bulk of its most important export market, Europe, following his invasion of Ukraine. That loss included Putin’s ill-considered move to cut gas supplies to Germany through a major pipeline last year.

Russian gas giant Gazprom has been pushing the Siberia pipeline plan for years, and all eyes were on the meetings with Xi this week for signs of agreement. It never materialized.

Xi’s support for Putin, despite his invasion of Ukraine, is a geopolitical milestone — the Chinese leader called it a change “that hasn’t happened in 100 years” — as Beijing positions itself for an era of growing confrontation with the United States and presses for a multipolar world to end Washington’s global dominance.

But Xi’s failure to give Russia the additional symbolic boost of a giant gas pipeline deal showed that he would not sacrifice China’s economic self-interest, and it highlighted Putin’s weakness and growing dependence on his “dear friend.”

Even if there had been an agreement, the pipeline would take many years to build and would not help Russia’s short-term economic problems with its shrinking revenue due to sanctions.

Xi’s trip offered Putin important moral support, and Chinese trade has bolstered Russia’s economy, but the lack of a deal on Power of Siberia 2 showed the limits of what Xi is willing to do, said Janis Kluge, an expert on Russia’s economy with the German Institute for International and Security Affairs.

“Russia needs a lot from China right now, and it’s in a very weak position,” Kluge said.

“Basically, it would be a gesture of trust or loyalty from the Chinese side because, of course, these gas deals are always very long-term commitments,” he said, adding that it was questionable if Power of Siberia 2 pipeline would ever be built, which in turn raises doubts about whether Russia’s western Siberian gas would ever be exported.

China does not want Russia to lose the war in Ukraine or to see the collapse of Putin’s regime, Kluge continued. “But this doesn’t mean that the relationship is blossoming,” he said. “There is now a clear dependency where there used to be a more symmetrical relationship. We can see that China is not offering anything more than the symbolics of this visit, and we can see that China is also more careful in its dealings with Moscow.”

Putin said on Tuesday that “practically all the parameters” of the Power of Siberia 2 deal had been agreed, but his comments concealed a defeat of Russian efforts to get final agreement from China.

“Unfortunately, ‘almost all’ is not ‘all’ of the parameters,” wrote Moscow-based analytical firm BKS, adding that “the agreement has been discussed in one form or another since 2004 or earlier, but the price issue has been a stumbling block again and again.

“If this aspect is not resolved, serious negotiations are still ahead and success is not guaranteed,” BKS wrote.

The leaders’ joint statement referred vaguely to “strengthening the comprehensive partnership in the energy sector” but, tellingly, only agreed to “make efforts to advance work on studying and agreeing” on the landmark project.

At the conclusion of Xi’s state visit, Deputy Prime Minister Alexander Novak could only say that details of the deal were yet to be worked out and that he hoped an accord would be reached sometime this year.

Konstantin Simonov, director of the National Energy Security Fund, a think tank, said Xi and Putin had been expected to sign the deal during their meetings.

“It is obvious that Russia needs the contract,” Simonov told Business FM, a Russian radio station. “Gazprom needs the contract, because last year we had a drop in supplies to the European Union of over 80 billion cubic meters. This is quite a serious volume, and this year we may lose another 30 to 40 billion cubic meters.”

“The fact that the contract has not been signed so far means that China believes that today Russia needs this project more, and it tries to drag out this delay in order to, most likely, get the most favorable conditions for itself,” he said.

…”Xi and Putin showcase alliance but offer no path to peace in Ukraine

Kremlin spokesman Dmitry Peskov denied reports that the failure to get a deal was a defeat for Putin, calling these “low-quality fake stories.”

“The reality is totally different,” Peskov said. “The expansion [of cooperation] was discussed.”

But there are plenty of uncertainties, including the expected level of Chinese gas demand in the 2030s, the price of gas at that time, China’s ready access to many other global suppliers and its capacity to increase its own domestic gas production.

From 2019 to 2020, Russia supplied 3 percent of China’s natural gas, compared with 10 percent from Turkmenistan and 12 percent from Australian liquefied natural gas (LNG), according to the Energy Policy Research Foundation. However, the original Power of Siberia project, which went onstream in December 2019, has increased supplies since. The foundation noted that China has kept its natural gas supplies well diversified, unlike many European nations before Putin’s invasion.

After meeting Xi on Tuesday, Putin said Power of Siberia 2, which would carry gas to China through Mongolia, is a “good project” and extolled Russia’s “reliable, stable” supply. In fact, analysts say, Moscow has often used its gas supplies to exert damaging political pressure on its neighbors, including Ukraine, Georgia and recently Moldova.

In a blatant example, Russia indefinitely cut the supply to Germany via the Nord Stream 1 pipeline in September, citing maintenance issues, while the Kremlin denied manipulating supplies.

“I think that China was watching very closely what happened there, and they will try to stick to their strategy of diversification and not allowing a single supplier to have a significant chunk of the Chinese market,” Kluge said.

Weeks later, a pipeline attack by unknown saboteurs severed supplies via Russia’s Nord Stream 1 and the new Nord Stream 2 pipeline, which had yet to receive regulatory approval to begin operations.

…”As Xi visits Russia, Putin sees his anti-U.S. world order taking shape

Mongolian Prime Minister Luvsannamsrain Oyun-Erdene recently told Reuters that his country was waiting for China and Russia to agree on the details of the Power of Siberia 2 pipeline before going through the trouble of deciding on the route through his country. Gazprom needs agreement that China will purchase a certain volume of gas to make the project viable.

The biggest question mark is Chinese gas demand in the 2030s. The International Energy Agency’s World Energy Outlook last year reported that China’s LNG contracts, existing pipelines and new domestic gas projects would exceed its requirements up to 2035, as the growth in demand for gas slows.

“There are no easy options for Russia in its search for new markets for the gas it was exporting to Europe,” the agency reported. “Sanctions undercut the prospects for large new Russian LNG projects, and long distances to alternative markets make new pipeline links difficult.”

It predicted that Russia’s share of internationally traded gas would fall to less than 15 percent in 2030 from 30 percent in 2021, and that its net income from exports would plummet to less than $30 billion from $75 billion over that tim

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Emmanuel Macron, during an interview with TF1 and France 2 televisions, Elysée Palace, March 23, 2023. LUDOVIC MARIN / AFP

Corporate profits: Macron favors 'exceptional contribution' over tax

The government wants to require companies that employ more than 5,000 people and that are buying back shares to better share profits with employees.

Le Monde by Elsa Conesa and Audrey Tonnelier, published on March 23, 2023

Since the Covid-19 pandemic, share buybacks have reached record levels in France: Nearly €29 billion in 2021, over €27 billion in 2022, three times more than before the pandemic. Such figures are politically touchy, at a time when many are struggling with the cost of living.

On Wednesday, March 22, during a televised interview on TF1 and France 2, French President Emmanuel Macron singled out the "cynicism" of "these large companies that we helped" during the pandemic, adding he wanted to "work on an exceptional contribution so that when there are exceptional profits by companies that are ready to buy back their own shares, workers will be able to benefit from it."

But Macron ruled out the possibility of taxing these exceptionally high profits. The objective remains to encourage companies to better compensate their employees through existing profit-sharing mechanisms. He reaffirmed on Wednesday his desire to pursue a pro-business, supply-side policy, his economic common thread since 2017. This, he said, "implies assuming the tax choices we have made for companies: If we want to keep reindustrializing, we need more work and more capital."

Bruno Le Maire, the French finance minister, later said that this contribution would only apply to companies with a staff of more than 5,000. "We want to require them to engage in more profit-sharing, more participation, more tax-free bonuses when they buy back shares. We could consider, for example, a doubling of the amounts paid."

According to the French national statistics office INSEE, there were 273 companies with more than 5,000 employees in France in 2020, amounting to a total of 3.9 million employees.

'Feeling of injustice'

The government intends to let unions and employer organizations decide what this incentive should look like. It will come as a "third layer" in the process of improving the distribution of value, according to Le Maire, after a first set of measures introduced in 2017 with a simplification of profit-sharing and participation agreements, the elimination of the lump-sum tax on social security contributions and the tripling of a "Macron bonus" and a second set of measures, which included a levy on energy companies introduced in the fall of 2022 to finance aid given to consumers to compensate for rising energy prices.

"If it can go into effect in 2023, all the better," a source at the Finance Ministry said. The ministry, however, was not able to list the number of companies affected and the sums involved or say whether the measure would be included in a "labor law" or hypothetical legislation on value sharing. The 2024 budget could also be used to contain the measure.

This "exceptional contribution" was in the pipeline for several weeks. The unions and employer federations reached an agreement on profit sharing in February which Prime Minister Elisabeth Borne has since pledged to transcribe into legislation.

The settlement requires companies with 11 to 49 employees to set up a profit-sharing mechanism if they meet certain financial criteria. But within the majority, some elected representatives wanted to go further. They had worked on a system of "super participation" similar to Wednesday's announcement.

Presented by Macron as a response to the "feeling of injustice" regarding the pension reform, is this new contribution, which essentially targets employees of large listed companies, a response to the anger shown in the streets?

"Surely, this measure is not aimed at the worst-off employees," said Louis Margueritte, a member of Parliament with Macron's Renaissance party in charge of an information mission on the fiscal and social tools for sharing value. "But no one believes this measure will be enough to ease the tensions and anger in the country for a second. It's just a signal showing that we haven't exhausted the subject [of profits] with the energy companies."

During the 2022 presidential campaign, Macron had promised the introduction of an "employee dividend", before the idea, which looked politically attractive but vague from an economic point of view, was postponed. It emerged again during the budget debates in the fall as a response to purchasing power issues and to the grumbling of the opposition in the face of profits made by certain companies in a context of high inflation, in vain.

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Cooperate with objective and ethical thinking…

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News round-up, March 22, 2023

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Quote of the day…

“Humanity is on thin ice, and that ice is melting fast,” the United Nations Secretary-General, António Guterres, said.

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'Disgusting LNG'

…”For the time being, the protagonists in this dispute are focusing on a renewable energy directive. Two camps, one led by Germany and the other by France, are fighting it out, each with a blocking minority on a specific point: Should low-carbon hydrogen be taken into account when measuring the efforts of member states to reach the target of 45% of renewables in their energy mix by 2030?

For Berlin and its Spanish, Luxembourgish and Austrian allies, only green hydrogen, produced with wind or photovoltaic electricity, is eligible. This is unacceptable for Paris and its partners, mostly from Eastern and Central Europe. They are banking on nuclear energy to help them comply with the Paris Agreement.

Most read…

Rally in Bank Shares Lifts U.S. Stocks

Treasury yields surge ahead of Wednesday’s interest-rate decision, with traders expecting 0.25-percentage-point increase

WSJ By Sam GoldfarbFollow and Caitlin McCabeFollow

‘Rocking Chair Rebellion’: Seniors Call On Banks to Dump Big Oil

Older climate activists gathered in cities around the country for a day of action targeting banks that finance fossil fuel projects.

NYT by Cara Buckley, Published March 21, 2023

POLITICAL MEMO

Head of the Eurogroup"We Have to Recognize How Quickly Things Can Change"

It has been a bad couple of weeks for banks in the U.S. and Europe. In an interview, Eurogroup head Paschal Donohoe discusses the possible dangers facing the euro area and why he remains confident.

Spiegel Interview Conducted by David Böcking, 20.03.2023

France and Germany square off in Brussels over nuclear power

Nuclear energy and its potential use for producing low-carbon hydrogen are at the heart of fierce battle between Paris and Berlin over European policy.

LE MONDE BY VIRGINIE MALINGRE (BRUSSELS, EUROPE BUREAU)

The U.N. Issues a Final Warning on the Climate—and a Plan

The I.P.C.C. report contains no new data; nevertheless, it manages to alarm in new ways.

The New Yorket by Elizabeth Kolbert

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: Germán & Co

Rally in Bank Shares Lifts U.S. Stocks

Treasury yields surge ahead of Wednesday’s interest-rate decision, with traders expecting 0.25-percentage-point increase

WSJ By Sam GoldfarbFollow and Caitlin McCabeFollow

Increased investor optimism about the banking system helped lift U.S. stocks Tuesday, with shares of regional banks including First Republic Bank FRC 29.47% at the forefront of a broad market rally.

Buoyed in part by reassuring comments by global financial authorities, both the S&P 500 and the Dow Jones Industrial Average posted their second consecutive day of gains for the first time since Silicon Valley Bank and Signature Bank collapsed less than two weeks ago.

Yields on U.S. government bonds also climbed sharply—with the two-year Treasury yield notching its largest single-day gain since 2009—as investors scaled back recent bets that an economic downturn could force the Federal Reserve to start cutting interest rates in the near future.

The S&P 500 gained 51.30 points, or 1.3% to 4002.87. The Dow Jones Industrial Average rose 316.02 points, or 1%, to 32560.60 and the technology-focused Nasdaq Composite climbed 184.57 points, or 1.6%, to 11860.11.

The KBW Bank index rose 5%. Shares in big U.S. banks such as JPMorgan Chase posted strong gains, while some smaller lenders surged. Shares in big U.S. banks such as JPMorgan Chase posted strong gains, while some smaller lenders surged. First Republic stock jumped $3.59, or 29%, to $15.77 after shedding nearly half of its value Monday. Western Alliance and PacWest, two other midsize banks that have come under pressure, each climbed more than 14%.

Stocks advanced ahead of Wednesday’s interest-rate decision from the Fed. Having once thought that the central bank could raise rates by 0.5 percentage point this month, investors have recently been debating whether officials will keep up their fight against inflation with a more modest 0.25 percentage increase or refrain from raising rates altogether until financial conditions stabilize.

Aiding Tuesday’s rally, Treasury Secretary Janet Yellen suggested the government could, if necessary, take further steps to shore up the banking system. Earlier this month, Ms. Yellen and other federal regulators used emergency powers to guarantee uninsured deposits at Silicon Valley Bank and Signature, while also setting up a new Federal Reserve lending program to help banks to meet withdrawal requests. 

“Our intervention was necessary to protect the broader U.S. banking system. And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion,” Ms. Yellen said.

Meanwhile, some banking-industry representatives and lawmakers have called for an expansion of deposit insurance, although it isn’t clear whether such a move would be politically viable in Congress.

JPMorgan Chief Executive Jamie Dimon is leading discussions about new efforts to stabilize the troubled First Republic, The Wall Street Journal reported Monday. The bank has become a focus of investors worried that a flight of deposits from midsize banks triggered by the run on Silicon Valley Bank could lead to a pullback in lending and drag on economic growth.

“The equity market is not pricing in a full banking crisis,” said Seema Shah, chief global strategist at Principal Asset Management. “There’s not panic setting into that investor space, which is certainly a very important thing.”

In Europe, bank stocks and bonds also recovered, following choppy trading Monday sparked by UBS’s emergency takeover of Credit Suisse. UBS’s stock climbed 12% to 19.43 Swiss francs.

Regulators made attempts Monday to calm bond investors after a risky type of bank debt, known as additional tier 1 bonds, tumbled. The selloff came after Credit Suisse’s AT1 bonds were wiped out as part of the troubled Swiss bank’s hastily arranged sale to rival UBS.

Additional tier 1 bonds ticked higher Tuesday, with a roughly $1 billion AT1 exchange-traded fund from Invesco gaining 16 cents, or 0.8%, to $20.86.

Wall Street and investors have deliberated over whether the Fed will raise interest rates again this week.

The Fed, meanwhile, was looming larger in investors’ minds after days spent intensely focused on the banking sector.

Some analysts have argued in recent days turmoil in the banking sector would keep the Fed from raising rates on Wednesday. Nevertheless, a growing consensus has emerged that the Fed will still lift rates by 0.25 percentage point.

Fed-funds futures showed Tuesday afternoon that investors were pricing in a roughly 86% chance that the central bank lifts interest rates by 0.25 percentage point for a second consecutive time, according to data from CME Group.

“I probably agree with consensus that they are likely going to hike 25 basis points tomorrow,” said Blake Gwinn, head of U.S. rates strategy at RBC Capital Markets. “I don’t necessarily think it’s the right option, but I just think…they really want to separate out the financial stability tool kit from the inflation fighting tool kit.”

Along with its decision on interest rates, Fed officials could have a significant impact on markets by signaling what their plans are for the future.

Some analysts have warned that Fed officials, including Fed Chair Jerome Powell, may be less concerned than investors that rate increases pose a serious threat to financial stability. If that becomes apparent on Wednesday, stocks could decline, these analysts say.

In a sign that investors were already recalibrating their interest-rate bets, prices of U.S. Treasurys posted major declines Tuesday, pushing their yields higher.

The yield on the two-year U.S. Treasury note, which is especially sensitive to changes in the near-term interest-rate outlook, settled at 4.175%, according to Tradeweb, up from 3.922% Monday.

The yield on the 10-year note also climbed, to 3.603% from 3.477% Monday. Yields on both bonds, however, remain well below their levels from two weeks ago.

Wednesday’s interest-rate decision, along with accompanying economic projections and Mr. Powell’s post-meeting press conference, could have a complicated impact on the bond market, some investors said.

Typically, bond prices would fall in response to Fed guidance suggesting that higher interest rates are ahead. Yet, in the current climate, some believe that longer-term bonds could actually rally in such a scenario if investors were worried enough that higher rates would drive the economy quickly in a recession.

If it looks like Fed officials are “just going to put blinders on and hike their way through this thing, I think markets are going to look at that and just say ‘Man, this is going to break,” said Mr. Gwinn.

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Image: “I think anybody is complicit that is not trying to do anything,” one protester said.Credit...Craig Hudson for The New York Times

‘Rocking Chair Rebellion’: Seniors Call On Banks to Dump Big Oil

Older climate activists gathered in cities around the country for a day of action targeting banks that finance fossil fuel projects.

NYT by Cara Buckley, Published March 21, 2023

They were parents, grandparents, great-aunts and great-uncles, ranging in age from their 50s to their 80s and beyond, and together they braved frigid temperatures to protest all through the night, and to rock.

Bundled in long johns, puffer coats, layered knit hats and sleeping bags, and fortified by cookies sent by courier from a sympathetic supporter, dozens of graying protesters sat in rocking chairs outside of four banks in downtown Washington for 24 hours, in a nationwide protest billed as the largest climate action ever undertaken by older folks.

Calling themselves the Rocking Chair Rebellion, they were part of more than 100 climate actions staged across the country Tuesday by Third Act, a protest group for people aged 60 and older, co-founded by Bill McKibben, the author and climate campaigner.

Their targets were Chase, the subsidiary of JP Morgan Chase, Wells Fargo, Citibank and Bank of America, the biggest investors in fossil fuel projects, according to a 2022 report by the Rainforest Action Network and other environmental groups. Collectively, the four banks have poured more than $1 trillion between 2016 and 2021 into oil and gas.

“This is the world we helped create,” said Katie Ries, 66, who is retired from the National Oceanic and Atmospheric Administration, as she sat in a rocking chair outside the Chase branch in downtown Washington shortly after an unseasonably cold dawn on Tuesday. “When you put this temporary discomfort in perspective, against what we are out here for, what we are facing, it just pales, it disappears.”

Formed in 2021, Third Act has some 50,000 members on its mailing list, according to Mr. McKibben, including a few centenarians. While the group has staged protests before, sometimes bearing signs that read “fossils against fossil fuels,” they said that Tuesday’s actions were the biggest yet, with participants driven in part by the conviction that it was unfair to lay responsibility for fixing the climate crisis at the feet of younger generations who will bear its brunt.

“I think anybody is complicit that is not trying to do anything,” one protester said.Credit...Craig Hudson for The New York Times

“For all their energy and intelligence and idealism, young people lack the structural power to make change on the scale we need in the time that we have,” said Mr. McKibben, who is 62, chatting early Tuesday before an anti-big bank climate rally in Washington’s Franklin Park. “We all vote, we ended up with most of the resources in our society. If we’re going to make Washington and Wall Street change, it’ll take a few people with hairlines like mine.”

The protests came on the heels of the latest dire report from the Intergovernmental Panel on Climate Change, which forecast that within the next decade, average global temperatures are likely to increase by 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, compared to preindustrial levels and making catastrophic weather events harder for human and other life-forms to bear. To ward off the worst, nations must cut greenhouse gasses by half by 2030, the report said, and stop adding carbon dioxide to the atmosphere by the early 2050s.

Understand the Latest News on Climate Change

Running out of time. A new report by the Intergovernmental Panel on Climate Change, a body of experts convened by the United Nations, said that Earth is likely to cross a critical threshold for global warming within the next decade, and nations will need to make an immediate and drastic shift away from fossil fuels to prevent the planet from overheating dangerously beyond that level.

A species in danger. Federal officials said that sunflower sea stars, huge starfish that until recently thrived in waters along the west coast of North America and that play a key role in keeping marine ecosystems balanced, are threatened with extinction and should be protected under the Endangered Species Act.

PFAS chemicals. The E.P.A. announced that the U.S. government intends to require utilities to remove from drinking water perfluoroalkyl and polyfluoroalkyl substances, part of a class of chemicals known as PFAS. Exposure to the chemicals, which are found in countless household items, has been linked to cancer, liver damage and other health effects.

Measuring droughts and deluges. Scientists have long cautioned that warming temperatures would lead to wetter and drier global extremes such as severe rainfall and intense droughts. A new study that used satellites that can detect changes in gravity to measure fluctuations in water shows where that may already be happening.

Yet in 2022, carbon emissions hit record highs and the top oil producers reaped a record-breaking $220 billion in profits.

And though major oil-funding banks are also investing in renewable energy sources, several protesters dismissed such efforts as greenwashing. “They’re running ads on TV, a lot of the big oil companies, about how they’re doing all these environmentally friendly things, but they’re doing record oil exploration,” said Fred Solowey, 71. “And then these phony offsets that they use a lot, to pretend that they’re going to be carbon neutral. It’s hogwash.”

For the rockers, the goal was to urge people to pull their money out of the oil-funding banks, and to goose the consciences of bank executives.

“I think anybody is complicit that is not trying to do anything,” said Pam Murphy, 64, as she sat outside the Chase branch early Tuesday, in front of a sign that read “This bank funds climate chaos.” One rocking chair over sat Susan Flashman, 68, a retired electrician who lives in Mount Rainier, Md. “We’re the activists, we’re the boomers,” Ms. Flashman said. “People our age, we’re just incensed that no nobody’s doing anything. So here we are.”

The protests came on the heels of the latest dire report from the Intergovernmental Panel on Climate Change.Credit...Craig Hudson for The New York Times

Organizers hosted a rocking chair painting party before driving the chairs to Washington.Credit...Craig Hudson for The New York Times

Most of the rocking chair activists were from the Washington metropolitan area, and sat in three-hour blocks throughout Monday night, though Ellen Barfield, 66, opted to sit multiple shifts from Monday evening until 5 a.m. Tuesday. She was a night owl anyhow, she said, and still up for the occasional all-nighter. “It’s better than a camp chair,” she said, of the seating arrangement, “And it’s poetic.”

“I mean, our climate is getting worse and worse,” Ms. Barfield continued. “We are far from doing what we need to do about it. And these banks are a big part of why, because they keep pouring money into this horrendous industry. And that has got to change, right?”

Most of the rocking chairs (there were about 50 in all) had been gathered by Lisa Finn, 57, and her husband, who live outside of Alexandria, Va., and hosted a rocking chair painting party before driving the chairs up in a U-Haul.

Along with the rally at Franklin Park (speakers included Ebony Twilley Martin, the co-executive director of Greenpeace USA; and Ben Jealous, executive director of the Sierra Club) there were marches featuring banners, outsize puppets and at least one shofar, and the blockading, with even more rocking chairs, of Wells Fargo and Chase. One protester was arrested after using paint on the street, organizers said.

Before addressing the rally, Mr. Jealous said pressure from older activists ought to make the banks take notice.

“For the banks, this is a very worrisome signal,” he said. “They can write off young people, they don’t see them as having a whole lot of money right now. They know these folks do.”

For his part, Mr. McKibben conceded that closing personal accounts in oil-funding banks was not likely to impose enough financial harm to force change, but said that merely underscored the urgent need to do more.

“We can put serious pressure on their reputations, their images, their brands, and their sense of themselves,” he said. “Right now, the most powerful people in the world are deeply complicit in the gravest crisis that the world has ever experienced. So part of today is an attempt to rouse these guys to some kind of sense of their place in history.”

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Image: Germán & Co

Head of the Eurogroup"We Have to Recognize How Quickly Things Can Change"

It has been a bad couple of weeks for banks in the U.S. and Europe. In an interview, Eurogroup head Paschal Donohoe discusses the possible dangers facing the euro area and why he remains confident.

Spiegel Interview Conducted by David Böcking, 20.03.2023

The banking quarter of Frankfurt: Eurogroup head Paschal Donohoe has "great confidence" in the euro area.

Foto: Jürgen Ritter / IMAGO

DER SPIEGEL: Mr. Donohoe, during the European debt crisis several years ago, the Eurogroup put together bailout packages worth hundreds of billions of euros. Are we currently heading for a repeat?

Donohoe: I have great confidence in the euro area and in the euro. The frequency of economic shocks has accelerated in recent years. But the recovery from these shocks is stronger than is currently being acknowledged. Last year the question I faced everywhere was whether the euro area was going into recession. Now, we’re revising those forecasts upwards. I can’t be certain about what lies ahead. But I’m confident that we can navigate our way through a more volatile world.

Paschal Donohoe, 48, has been president of the Eurogroup - made up of finance ministers and economy ministers from the euro zone - since July 2020. Prior to entering politics, he worked for Procter & Gamble. Even though Donohoe is no longer his country's finance minister, having taken over the budget portfolio, he was re-elected as president of the Eurogroup until 2025.

DER SPIEGEL: It seems quite volatile indeed. In the U.S., Silicon Valley Bank has collapsed and a regional bank, First Republic, had to be propped up by other banks to the tune of almost $30 billion. Over the weekend, UBS took over Credit Suisse after a 50-billion-franc loan from the Swiss National Bank apparently wasn’t enough to calm the markets. Larry Fink of Blackrock is predicting that more "dominoes” might fall. Do you agree?

Donohoe: There are always risks when an economy is as deeply interconnected as the European one. But I believe that we are monitoring risks very closely and have regulated our banks much better to keep our banking system secure. Our European banks now hold far more liquidity and are much more regulated than a couple of years ago.

DER SPIEGEL: Still, we are seeing banks bailed out with public money, as in the case of Credit Suisse. What became of the promise made following the last financial crisis that banks would never again become too big to fail?

"We need to be humble and recognize how quickly things can change."

Donohoe on the situation of the banks

Donohoe: The key thing for me are banks in the euro area. And I am confident that we can manage any exposure we have to developments elsewhere in the world. We need to be humble and recognize how quickly things can change. But I believe that what we have in place will work and will make a difference this time around.

DER SPIEGEL: Nevertheless, the projects of forming banking union and unifying capital markets are far from complete.

Donohoe: Yes, but the banking union in particular is deeper and better than a decade ago. And I believe that developments over the last year will provide further momentum for the capital markets union. We have a duty to invest, especially to fight climate change. But the economic consequences of the war on Ukraine, the return of inflation and the increase in borrowing costs have made it harder to find money. That’s where a capital markets union can help.

DER SPIEGEL: The EU is currently discussing new fiscal rules. German Finance Minister Christian Lindner is unhappy with the European Commission’s plan to already apply new rules in 2024, even though they haven’t even been agreed on yet. Does the rest of the Eurogroup share that criticism?

Donohoe: There are different views, and Minister Lindner made his view very clear during the last Eurogroup meeting. Now we need to find an agreement. But what’s even more important in the short term: We have to change budgetary and fiscal policy in the aftermath of the COVID crisis.

DER SPIEGEL: You must be referring to programs like Italy’s "Superbonus 110%,” which was recently suspended. It promised up to 110 percent of renovation costs in tax credits. Have subsidies gone off the rails in recent years?

Donohoe: I make the general point that the economic policies that were put into place during COVID reflected the economic context of the time. That context has now changed, because both inflation and borrowing costs have gone up dramatically. Budget policy needs to reflect that. There is much common ground on this in the Eurogroup.

DER SPIEGEL: Is there? Countries like Germany and Italy certainly don’t seem to be on the same page.

Donohoe: There is enough agreement. But 2023 has to be the year where we turn that agreement into policy change. And there are signs of change: Italy, Spain and France have now phased out the very big tax reductions for energy that they put in place in 2022.

DER SPIEGEL: How about Germany? The German government has been heavily criticized for unilaterally announcing a 200-billion-euro package to combat the energy crisis.

Donohoe: Minister Lindner is one of the champions within the Eurogroup of sustainable public spending. Each government must decide what is the appropriate journey for them to change their energy support. And I know Minister Lindner and the German government will do the same.

DER SPIEGEL: In the past, there have been numerous violations of EU fiscal rules, but not a single country has ever actually been sanctioned. Will that ever change?

Donohoe: Yes. Credible sanctions will be an essential element of our future rules. But financial markets also evaluate whether they find national finance plans credible – and they respond if they don’t.

"Even though we will lose a lot of tax revenue, I believe it was the right thing to do."

Donohoe on Ireland's approval of a minimum tax

DER SPIEGEL: Another reform on the way is the global minimum tax. Your home country of Ireland has profited from a statutory corporate tax of only 12.5 percent in the past, and you expect to lose around a fifth of your corporate tax revenue as a result of the reform. Why did you still agree to it?

Donohoe: Because the absence of an agreement would have generated very significant risks with regards to tax policy and trade. And it would not have fit our world view to stop a process that matters to citizens all over the world. Even though we will lose a lot of tax revenue, I believe it was the right thing to do.

DER SPIEGEL: What feedback are you receiving from companies?

Donohoe: They understand why we did it. Ultimately, they want to be based in a country that is part of a global policy framework, has a good reputation and is willing to be collaborative. And we are still going to have a very competitive tax rate.

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Image: A nuclear power complex in Civaux, central France. ALAIN LE BOT / PHOTONONSTOP / ALAIN LE BOT / PHOTONONSTOP

France and Germany square off in Brussels over nuclear power

Nuclear energy and its potential use for producing low-carbon hydrogen are at the heart of fierce battle between Paris and Berlin over European policy.

Le Monde by Virginie Malingre (Brussels, Europe bureau)

Since Germany decided to pull out of nuclear power after the Fukushima disaster in Japan in 2011, Paris and Berlin have been fighting each other over nuclear power.

In recent months, this diplomatic, political and economic dispute has become unusually intense as the battle against global warming and the war in Ukraine leads Europe to move away from fossil fuels.

It is in Brussels that the match is being played. Blackmail, haggling, a struggle for influence and high-dose communication make up the ingredients of this confrontation which has kept specialists on their toes. At least five EU legislative projects are already affected, struggling to deliver progress: Renewable energies, a gas package, air and maritime fuels as well as the hydrogen bank.

France and Germany are also readying their arguments for two other strategic pieces of legislation that the European Commission will soon be presenting. The first relates to the reform of the European electricity market and the second to ways to develop a competitive green industry in the European Union in the face of Chinese and American offensives.

Some of these regulations under development concern the fate of low-carbon hydrogen, i.e. produced with nuclear power to decarbonize industry and long-distance transport alongside renewable hydrogen. Others will be highly significant for the economic viability of the French nuclear sector and the competitiveness of the country.

'Disgusting LNG'

For the time being, the protagonists in this dispute are focusing on a renewable energy directive. Two camps, one led by Germany and the other by France, are fighting it out, each with a blocking minority on a specific point: Should low-carbon hydrogen be taken into account when measuring the efforts of member states to reach the target of 45% of renewables in their energy mix by 2030?

For Berlin and its Spanish, Luxembourgish and Austrian allies, only green hydrogen, produced with wind or photovoltaic electricity, is eligible. This is unacceptable for Paris and its partners, mostly from Eastern and Central Europe. They are banking on nuclear energy to help them comply with the Paris Agreement.

"Banning the use of nuclear power, which is an energy that emits less carbon than photovoltaic or wind power, is absurd," Agnès Pannier-Runacher, the French minister of energy transition, has said on multiple occasions.

"If France relies on its nuclear power, it will not do what is necessary in terms of renewables," the Germans say. "When it comes to importing disgusting LNG from shale gas or running its coal-fired power plants, Germany is less critical," French officials argue.

Paris believes that, with more than 90% of its electricity already decarbonized, it is impossible to focus on renewable energy only without eventually reducing nuclear power production. Germany, on the other hand, whose electricity is almost half fossil fuel-based, has more leeway.

The standoff could take on the same magnitude as the debate on the inclusion of nuclear power in the taxonomy, the labeling of green activities that allows private investment to be directed and which has divided Europeans for many months. Today, "two blocking minorities are facing each other. I have the feeling of being in an arena with two bulls facing each other. For the moment, everything is calm," a source told Le Monde.

On February 28, on the sidelines of a European Council of Ministers in Stockholm, Pannier-Runacher attempted a show of force. She brought together 10 countries – Slovakia, Slovenia, Bulgaria, Croatia, Poland, the Czech Republic, Hungary, Finland, Romania and the Netherlands – with the intention of laying the first foundations of a "nuclear alliance."

They signed a joint statement recognizing the role of nuclear power in securing energy supplies and meeting climate objectives. But Paris did not obtain recognition of the role of nuclear power in European legislation. This was noticed by Germany, which is convinced "that the pro-nuclear coalition around France is fragile. It is playing for time," a European diplomat said.

Empty words

"Both France and Germany are sticking to ideological positions. We have to get out of this, otherwise, it will undermine the Green Deal and the energy transition," said Pascal Canfin, chairman of the European Parliament's Environment Committee and an MEP with the pro-European party Renew Europe.

In Paris, the matter was thought to be settled after a French-German Council of Ministers on January 22. Admittedly, the negotiations had been tough and it was only the day before the meeting at the Elysée Palace between French President Emmanuel Macron and German Chancellor Olaf Scholz that the passage devoted to hydrogen in their joint declaration had been finalized.

But in the end, Macron and Scholz committed to "ensure that renewable and low-carbon hydrogen can be taken into account in the decarbonization objectives set at the European level."

This, it was thought at the Elysée, was the equivalent of German approval for any text dealing with the question of hydrogen. Even if, as a diplomat said, "it is not certain that the Chancellor had informed the Greens, who are very hostile to nuclear power. Robert Habeck, the German minister of economic affairs (Greens), immediately nuanced what was said in the joint declaration."

A few days earlier, in Barcelona on January 19, Macron and Spanish Prime Minister Pedro Sanchez had signed a treaty of friendship that also lifted – Paris believed – the Spanish obstacle on this issue. In truth, the issue of hydrogen was still open when the two leaders met face-to-face at the National Art Museum of Catalonia.

"Sanchez eventually agreed but it is not certain that he understood everything. He got a hard time from his teams and from Berlin," a source said. In return, France agreed to extend to Germany a future hydrogen pipeline that will link Barcelona and Marseille (H2Med), thus responding to a pressing request from Madrid and Berlin.

Very soon, however, France realized its partners did not feel committed in Brussels by the agreements they had signed in Paris and Barcelona. "Perhaps Germany and Spain see no reason to make concessions to France, whose nuclear power guarantees relatively low electricity prices," a source close to Macron said.

Many boundaries have moved in Germany since the start of the war in Ukraine [end of February 2022], especially on defense. Scholz cannot do everything at the same time, especially since his coalition is difficult to govern," a European diplomat added.

In any case, France's response was not long in coming. It rallied its allies and is now threatening to block the H2Med project. On the other side, the blackmail is not well received and positions have become even tenser. As a result, a February 7 negotiation meeting on the renewable energy directive was canceled. Pannier-Runacher's cries of victory on February 13, when the Commission, in a delegated act on green hydrogen, gave France a point, did not help.

Time is running out

EU leadership, which is as divided on nuclear power as the 27 member states are, is not at ease in this matter. "The Commission is tetanized, it has waited a long time for the member states to come to an agreement," Canfin said.

European Commission President Ursula von der Leyen, who has had several exchanges with Macron and Scholz on the subject, is more pragmatic but she is no less German. Above all, she has a political agenda: With the European elections of 2024 looming, Angela Merkel's former minister may want to remain in office. She cannot risk angering Paris, let alone Berlin.

"Von der Leyen is trying to balance the two," a diplomat said. In January, she gave Berlin the upper hand when she signed a memorandum of understanding with Kyiv, intended to increase cooperation between the two parties. The agreement provided for the import of only green Ukrainian hydrogen, even though Ukraine has nuclear power plants. Paris eventually obtained a correction to the text in favor of low-carbon hydrogen.

As this case shows, such memorandums between the EU and third countries also reflect the Franco-German row. "We do not want the EU to engage in an anti-nuclear crusade abroad," stressed a senior French official. On the German side, the government is counting on these agreements to secure supplies of renewable hydrogen.

"After Russian gas, Berlin is creating new dependencies," a pro-nuclear European diplomat said. "Besides, importing hydrogen by boat from Chile or New Zealand [with whom memorandums of understanding are being negotiated] is not necessarily very green."

"Every time the word hydrogen is mentioned somewhere, Paris and Berlin clash," an EU official said. Even when the issue is minor. The latest example came on February 20, when the European foreign ministers were to adopt conclusions on climate diplomacy, a classic exercise that is repeated every year after the United Nations Conference of the Parties. But this year, because it was also about hydrogen, it was not possible.

"Germany must let France develop its low-carbon hydrogen while France must let Germany develop its imported renewable hydrogen model," Canfin said. "To achieve climate neutrality in 2050, we will need nuclear and renewable energy, we must add up the solutions."

"It will take time for de-escalation to take place," a European diplomat said. For the time being, Scholz and Macron have been avoiding frontal exchanges on the subject while, behind the scenes, experts from both sides are looking for an agreement.

But time is running out. The Commission is to present its proposals for reforming the European electricity market and helping the member states develop a competitive green industry, the implications of which for nuclear power will be decisive.

If a French-German compromise on the subject has not emerged by then, discussions between European leaders, who are due to meet in Brussels on March 23-24, are likely to be much heated.

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Media

The U.N. Issues a Final Warning on the Climate—and a Plan

The I.P.C.C. report contains no new data; nevertheless, it manages to alarm in new ways.

The New Yorket by Elizabeth Kolbert

The “window of opportunity to secure a liveable and sustainable future” is “rapidly closing.” So warns the United Nations’ Intergovernmental Panel on Climate Change in its latest report, released on Monday. The findings in the document, officially known as the AR6 Synthesis Report, might be summed up as “Wake up! This is your last chance, humanity.”

According to the I.P.C.C., average global temperatures have already increased 1.1 degrees Celsius—two degrees Fahrenheit—from the late nineteenth century, and this is causing “widespread adverse impacts” for people and for other living things. “Impacts on some ecosystems are approaching irreversibility,” the report states. For every additional increment of warming, the chances of catastrophe will only increase, and the options for adaptation will contract. Climate-related and climate-unrelated disasters will begin to interact, resulting in risks that cascade “across sectors and regions.” And those who are likely to suffer the most are those who have done the least to cause the problem.

“Humanity is on thin ice, and that ice is melting fast,” the United Nations Secretary-General, António Guterres, said in a video message released for the occasion.

As the name of the synthesis report suggests, the latest from the I.P.C.C. contains no new data; it simply pulls together information that has already been published. Nevertheless, the synthesis manages to alarm in new ways. So much damage is already occurring with 1.1 degrees of warming, it observes, that probably the harms of further climate change are even greater than had been predicted. Meanwhile, the odds of avoiding a temperature increase of 1.5 degrees C—considered by many scientists to be a key threshold—are approaching zero. Even under a best-case scenario, with global greenhouse-gas emissions declining both quickly and dramatically, “warming is more likely than not to reach 1.5° C,” the report states.

The I.P.C.C. operates under extraordinary political constraints. Although its work is largely scientific, its reports are subject to approval by a global cast of diplomats. To hash out the final language for the synthesis report, delegates from all around the world gathered last week in Interlaken, Switzerland. Tellingly, the deadline for the final document kept being pushed back. According to news reports, one of the major sticking points was how to decide which nations will be eligible for aid from a new “loss and damage” fund agreed on last year, during the cop27 conference, in Egypt. (The fund is supposed to funnel money from wealthy nations that have emitted the most to poorer countries that are bearing the brunt of climate change.)

When the agreed-upon report was released, U.N. officials tried to characterize it as terrifying but also as inspirational. Guterres described it as a “how-to guide to defuse the climate time bomb.” The chair of the I.P.C.C., Hoesung Lee, an economist from South Korea, told reporters that “this report offers hope.”

The synthesis report does, indeed, show how humanity could still avoid the worst effects of climate change. Were global carbon-dioxide emissions to be cut in half by 2030 and effectively eliminated by 2050, there would, according to the I.P.C.C., still be a chance of limiting warming to 1.5° C.

“The systemic change required to achieve rapid and deep emissions reductions and transformative adaptation to climate change is unprecedented in terms of scale, but not necessarily in terms of speed,” the report notes. “Feasible, effective, and low-cost options for mitigation and adaptation are already available.”

But to imagine at this point that the latest warning from the I.P.C.C. will spur action, when so many previous ones have failed to, requires not just hope but, it would seem, something close to delusion. (The latest report is known as the AR6 Synthesis because it is part of the I.P.C.C.’s sixth assessment; this assessment and the five earlier ones each produced hundreds of pages of documentation.)

Just last week, the Biden Administration approved an enormous new oil-drilling venture, the Willow project, in Alaska. ConocoPhillips, the company in charge, plans to pump oil out of the project for thirty years, which is to say well beyond mid-century. According to a recent report by the Finland-based Centre for Research on Energy and Clean Air and the California-based Global Energy Monitor, last year China approved a hundred and six gigawatts’ worth of new coal-fired power plants, “the equivalent of two large coal power plants per week.”

Can actions like this be squared with halving emissions by 2030 and eliminating them by 2050? The simple answer is no. The I.P.C.C. is already gearing up for a seventh assessment cycle, set to begin this summer. Even before this next cycle begins, a summary of the results can be composed with, in I.P.C.C.-speak, “high confidence.” The world will continue to warm, the damage will increase, and the global response will be inadequate.

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Cooperate with objective and ethical thinking…

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News round-up, March 21, 2023

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Most read…

Global energy use and emissions hubs set to shift by 2050

Over the past century, China, the United States, and Europe have accounted for the bulk of historic carbon dioxide (CO2) emissions and energy use, as well as the majority of spending on renewable energy and emissions reduction.

Reuters by Gavin Maguire, editing by Germán & Co

Switzerland's secretive Credit Suisse rescue rocks global finance

Behind closed doors, the struggle to save the country's second-largest bank was underway even though Credit Suisse was publicly considered sound by the country's central bank and financial regulator.

Reuters by John O'Donnell and Andres Gonzalez, editing by Germán & Co

“UBS agrees to buy Credit Suisse in shotgun merger…

POLITICAL MEMO

‘The Circus Continues’: For Trump, Legal Woes Resurrect Old Habits

The former president strengthened his political position in recent weeks, but an impetuous response to his potential indictment could alienate voters he will need to win back the White House.

NYT by Michael C. Bender, March 21, 2023

The Marvellous Boys of Palo Alto

From Silicon Valley Bank to Sam Bankman-Fried, the recent scandals upending the tech industry are rooted in a longer tradition of innovation and impunity.

The New Yorker By David Leavitt

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: A general view of power plants of Adani Power is seen at Mundra town in the western Indian state of Gujarat April 1, 2014. REUTERS/Amit Dave

Global energy use and emissions hubs set to shift by 2050

Over the past century, China, the United States, and Europe have accounted for the bulk of historic carbon dioxide (CO2) emissions and energy use, as well as the majority of spending on renewable energy and emissions reduction.

Reuters by Gavin Maguire, editing by Germán & Co

LITTLETON, Colorado, March 20 (Reuters) - The Indian subcontinent, Southeast Asia and Sub-Saharan Africa will overtake China, North America and Europe as the key drivers of world energy use through 2050, with implications for global emissions potential and accountability.

China, the United States and Europe have been the main sources of economic growth and pollution for the past century, accounting for over half of all historic carbon dioxide (CO2) emissions and energy use, but also the majority of spending on renewable energy and emissions abatement.

In contrast, the emerging markets within South Asia, Southeast Asia and Sub-Saharan Africa currently account for less than 20% of worldwide energy use and emissions, data from Norway-based risk assurance firm DNV shows, and have less funding available for energy transition efforts than larger peers.

Global primary energy use will remain fairly flat through 2050 despite steep cuts from China, North America & Europe

Even so, thanks to strong investment and demographic trends within several key countries including India, Indonesia, and Nigeria, these regions will boost their collective consumption of primary energy supplies - which includes transport fuels - by nearly 60% through 2050, according to DNV data.

This collective rise in energy use across emerging Asia and lower Africa will more than offset the expected contraction in energy consumption in China, Europe and North America through 2050, DNV data shows.

Combined primary energy use in the Indian subcontinent, Southeast Asia and Sub-Saharan Africa will grow from roughly 115,000 petajoules in 2023 to nearly 194,000 petajoules by 2050, an expansion of more than 78,000 petajoules.

Over the same period, China, Europe and North America are expected to trim their collective energy use from around 326,000 petajoules to 250,000 petajoules, or by around 76,000 petajoules.

South Asia, Southeast Asia & Sub-Saharan Africa to be main drivers of global energy use by 2050

This means that global energy consumption will continue to grow from current levels by 2050, despite the efforts of current energy transition leaders to reduce energy use by mid-century, DNV data shows.

FOSSIL FUELLED

In addition to growing overall energy use, most Asian and African countries will remain overwhelmingly reliant on fossil fuels for at least the next decade, due to the slow roll out of green energy and underdeveloped electricity grids that will struggle to accommodate intermittent renewable energy supplies.

This will likely result in a widening in the number of heavy emissions hubs from mainly in China and South Asia currently to parts of Southeast Asia and lower Africa, undermining efforts to cap pollution totals in all areas.

South Asia's largest economy, India, is expected to rely on coal, natural gas and oil for more than 70% of primary energy needs through 2040, after which solar, wind and other clean energy supplies will emerge as the dominant sources of power.

Indian subcontinent source of primary energy 2020-2050

In Southeast Asia, more than 70% of primary energy is set to come from coal, natural gas and oil through 2035, while in Sub-Saharan Africa the share of fossil fuels in primary energy supplies is set to continue expanding until the mid-2040's, despite steep simultaneous advances in renewable energy supplies.

MANUFACTURING MOMENTUM

Adjustments in manufacturing capacity are set to be a key driver of energy demand growth across Asia and Africa over the coming years.

Downsizing of outdated or uncompetitive capacity is set to reduce Greater China's energy demand from manufacturing by 23% between 2025 and 2050, DNV data shows.

Over the same period, Sub-Saharan Africa is set to experience a nearly 200% climb in energy demand for manufacturing as more factories and industrial plants emerge in the region in response to favourable labour market and capital investment trends.

Strong growth rates in manufacturing energy demand are also expected in the Indian subcontinent (up 93% from 2025 to 2050), Southeast Asia (up 42.5% from 2025 to 2050) as well in as the Middle East, North Africa and Latin America.

Manufacturing energy use is seen growing sharply in Indian subcontinent, Southeast Asia & Sub-Saharan Africa from 2025 to 2050

Currently, coal, natural gas and biomass are the primary sources of power for manufacturing in Africa and Asia, where abundant and affordable energy supplies are often more important to a manufacturers' bottom line than the emissions toll linked to its fuel source.

However, given the widespread global support for rapid renewable energy deployment in all regions, it is likely that increased volumes of cheap green energy may displace some fossil fuels in certain markets over time.

If so, the global energy landscape of 2050 will not just have drastically different geographic concentrations of energy use, but also a cleaner emissions profile that may support energy transition efforts.

The opinions expressed here are those of the author, a columnist for Reuters.

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Image: Germán & Co by Shutterstock

Switzerland's secretive Credit Suisse rescue rocks global finance

Behind closed doors, the struggle to save the country's second-largest bank was underway even though Credit Suisse was publicly considered sound by the country's central bank and financial regulator.

Reuters by John O'Donnell and Andres Gonzalez, editing by Germán & Co

“UBS agrees to buy Credit Suisse in shotgun merger…

ZURICH, March 21 (Reuters) - Days before a hastily convened press conference late on Sunday that would make the world's front pages, Switzerland's political elite were secretly preparing a move that would jolt the globe.

While the nation's central bank and financial regulator publicly declared that Credit Suisse was sound, behind closed doors the race was on to rescue the nation's second-biggest bank.

The chain of events, led to the erasure of one of Switzerland's flagships, a merger backed by 260 billion Swiss francs ($280 billion) of state funds and a move that would upend global finance: favoring the bank's shareholders to the detriment of bond investors.

The events that unfolded in the landlocked nation -- long a bastion of political neutrality that has secured its standing as a safe-haven favourite for wealthy elites -- go against one of the key lessons of the 2008 financial crisis. The rescue concentrates even greater risks into one banking behemoth, UBS Group AG.

What is more, making bondholders cushion the blow to stock investors from the UBS-Credit Suisse tie-up rattled lenders, pushing up their borrowing costs in a threat to world economic growth.

The Swiss National Bank declined to comment while the finance ministry did not respond to a request for comment.

Reuters Graphics Reuters Graphics

Battered by years of scandals and losses, Credit Suisse for months had been battling a crisis of confidence of its own making. In a matter of days its demise was sealed.

Soon after news broke on March 12 that the United States would step in to guarantee all the deposits of two mid-sized lenders struggling to keep up with demands for cash, the spotlight was on Credit Suisse and how it would maintain depositor confidence.

Customers had already pulled $110 billion from the Zurich-based bank in the last three months of 2022, outflows that it was fighting to reverse.

A rainmaker who brokered a number of European bank rescues during the financial crisis, speaking on condition of anonymity, told Reuters that after seeing the U.S. banking collapses there was little doubt UBS would be called upon to shore up Credit Suisse.

The banker on March 13 rang up UBS warning the world's biggest wealth manager that it should prepare to receive a call from Swiss authorities.

By Wednesday, two days later, Credit Suisse was swept up in a full-blown crisis. Comments by the chair of Saudi National Bank, Ammar Al Khudairy, who said that he could not invest further in the Swiss bank sent Credit Suisse shares into a tailspin.

It mattered little that Credit Suisse's biggest investor also reiterated confidence in the lender. "They're a globally systemically important bank so ... monitored on a daily basis," he told Reuters. "There's no surprises like you would have in a middle-sized bank in the US. It's a completely different ecosystem."

Significant deposit outflows followed, the source who would go on to advise UBS on the merger told Reuters, declining to put a number on them.

In banking center Zurich and Bern, the Alpine state's capital, pressure was building. Yet as the discussions to salvage Credit Suisse got underway, Swiss regulators FINMA and the Swiss National Bank said that "the problems of certain banks in the USA do not pose a direct risk of contagion for the Swiss financial markets", conceding, however, that they would fund the bank with unlimited access to funding.

Credit Suisse too was conveying stability. The bank told Reuters on Thursday that its average liquidity coverage ratio, a key measure of how much cash-like assets the bank has, did not change between March 8 and March 14, despite the global banking crisis.

Swiss Finance Minister Karin Keller-Sutter, a former translator and teacher just months on the job, told the Sunday media conference that additional support for Credit Suisse had been agreed but held secret for fear of panicking people with a succession of emergency announcements.

She said was in close contact with U.S. Treasury Secretary Janet Yellen and British finance minister Jeremy Hunt. Both countries have large Credit Suisse subsidiaries employing thousands.

Reuters Graphics Reuters Graphics

There was far less communication with the European Central Bank in Frankfurt, said one person familiar with the matter. Credit Suisse's arms in Luxembourg, Spain and Germany were far smaller.

European regulators were, in particular, worried that the Swiss could impose losses on bondholders - a radical step that they did take, as the costs of a rescue spiralled for taxpayers.

"They did this on their own," said the person, asking not to be named, describing the outcome as a "big surprise".

A spokesperson for FINMA said that although it laid emphasis on Britain and the U.S. because of the scale of Credit Suisse's business in those countries, it had also informed European authorities.

Not everyone, however, was kept in the dark.

Saudi investors, with roughly a 10% stake in the bank, put pressure on the Swiss, warning that they could take legal action if they did not recover some of their ill-fated investment, said another person with knowledge of the matter.

Saudi National Bank did not immediately respond to a request for a comment

"The money had to come from somewhere," said one of the officials involved in the negotiations.

The Credit Suisse board, interested in preserving some unity in an increasingly fractious setting, stood behind them, and argued for a payout to shareholders, said the person.

Regulators too wanted to avoid a wipeout for shareholders that would have resulted in the winding up of the bank, potentially a bigger headache for the nation and a loss of face just hours after standing by Credit Suisse.

In the end, the Swiss agreed, choosing to wipe out 16 billion of francs of bonds, compensating shareholders with 3 billion francs and turning a key principle of bank funding on its head - namely, that shareholders rather than bondholders take the first hit from a bank failure.

It marks an ignominious end for an institution founded by Alfred Escher, a Swiss magnate affectionately dubbed King Alfred I, who helped build the country's railways. Credit Suisse banks many Swiss companies and citizens - including finance minister Keller-Sutter.

On Sunday, as a panel of Swiss officials and executives announced the deal, they were unrepentant.

"This is no bailout," Keller-Sutter told journalists. Thomas Jordan, the central bank chief, defended the package, as necessary to counter any wider shock.

"The taxpayer in this scenario has less risk," said Keller-Sutter. "The bankruptcy would have been the highest risk because the cost to the Swiss economy would have been huge."

Still, markets are reeling from the extraordinary turn of events.

"When you are a bank for billionaires, deposits can fly away very quickly," said one of the people involved. "You can die in three days."

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Image: Media

POLITICAL MEMO

‘The Circus Continues’: For Trump, Legal Woes Resurrect Old Habits

The former president strengthened his political position in recent weeks, but an impetuous response to his potential indictment could alienate voters he will need to win back the White House.

NYT by Michael C. Bender, March 21, 2023

Donald J. Trump, the former prime-time reality TV star known for his love of big stages and vast crowds, has embraced a more humbling and traditional style on the campaign trail in recent months.

He held intimate events in New Hampshire and South Carolina. He fielded questions from voters in Iowa. And in multiple cities, he surprised diners with unannounced visits to restaurants where, with his more familiar Trumpian flair, he made a dramatic show of sliding a wad of cash from his pocket to buy everyone a bite to eat.

This strategy has highlighted the billionaire’s counterintuitive political strength at connecting with voters on a personal level — while also underscoring the chief weakness of his main potential Republican rival, Gov. Ron DeSantis of Florida, who can often come across as snappish or uncomfortable.

But now Mr. Trump faces a likely indictment in New York in the coming days, and how he responds to this moment could determine whether he continues to stabilize his standing as the Republican presidential front-runner or whether he further alienates the voters he will need to return to the White House.

The result will help answer a pressing question about his candidacy for many Republican primary voters: Can Mr. Trump show enough restraint to persuade moderate Republicans and independent swing voters to choose him over President Biden in 2024?

The Looming Indictment of Donald Trump

So far, he has returned to old habits.

Since Saturday, Mr. Trump has unleashed a series of personal, unproven and provocative attacks against investigators, Democrats and fellow Republicans. He accused Alvin L. Bragg, the Manhattan district attorney bringing the case against Mr. Trump, of being a “woke tyrant” who was “destroying Manhattan.” He called his Democratic opponents “animals and thugs.” He insinuated baselessly that Mr. DeSantis might be gay.

It was the kind of behavior that swing voters and moderate Republicans tend to dislike most about Mr. Trump: the long tail of chaos that often drags behind him; an inclination to focus on personal attacks instead of policy solutions; and his inability, particularly in 2020, to settle on a forward-looking message to explain his candidacy.

For three consecutive elections, these voters have largely abandoned Mr. Trump, as well as the candidates and causes he has endorsed. In 2020, he bled twice as much support among Republican voters as Mr. Biden did among Democratic ones, an outcome the former president will have to address in order to win in 2024.

“The circus continues,” former Gov. Chris Christie of New Jersey, a Republican and a former federal prosecutor, said on Sunday on ABC. “He only profits and does well in chaos and turmoil, and so he wants to create the chaos and turmoil on his terms — he doesn’t want it on anybody else’s terms.”

“But, look, at the end, being indicted never helps anybody,” Mr. Christie continued. “It’s not a help.”

How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.

Taylor Budowich, a Trump adviser who now runs the main super PAC supporting the former president’s White House bid, defended Mr. Trump’s approach, saying he was “campaigning harder than every other candidate combined, while staying focused on the issues voters care about.”

“This is allowing the contrast to be made,” said Mr. Budowich, whose group filed a complaint last week accusing Mr. DeSantis of breaking state ethics law. “Donald Trump is the true fighter for the people, while every other candidate is different versions of the same.”

Some Trump allies believe that becoming the first former president to face criminal charges would carry a political upside for Mr. Trump, at least in a Republican primary. The former president has skillfully persuaded many supporters to metabolize critiques from opponents, investigations by law enforcement and impeachments by Congress as deeply personal attacks on them.

Mr. Trump has started to amplify the anger and the energy of his most ardent followers as he tries to fight his legal battle on a political playing field.

His muscular online fund-raising machine has started leveraging the potential indictment in appeals for campaign contributions, returning to a well-worn page in his campaign playbook. Mr. Trump and his team turned his first impeachment into tens of millions of dollars, and collected similar amounts as he made false claims of a stolen 2020 election. Last year, his two single biggest fund-raising days came after the F.B.I. searched his South Florida home for missing government documents.

But whether Mr. Trump’s attempt to galvanize his base is worth the political cost that he may pay in a general election is far from certain.

The first signs of regression appeared early Saturday, when Mr. Trump surprised his campaign aides with a social media post that declared he would be arrested on Tuesday. (A spokesman later clarified that Mr. Trump did not have direct knowledge of the timing of any arrest.)

On Sunday, he resurfaced his lies about the 2020 election, which had recently started to fade from his public speeches. But as a reminder that Mr. Trump still hasn’t turned the page, he injected false claims of election fraud into a social media post complaining about the Manhattan district attorney’s office.

On Monday, he hurled a crude joke at Mr. DeSantis after the Florida governor broke his silence about the potential indictment, criticizing it as politically motivated but drawing attention to Mr. Trump’s sordid behavior at the center of the case, which revolves around hush-money payments to a porn star who said she had an affair with the former president.

Whether three consecutive days of escalation was a temporary or lasting step away from the relative discipline that defined his last few months of campaigning remained to be seen.

But at the very least, it signaled a long week ahead. On Saturday in Waco, Texas, Mr. Trump is set to host the first large event of his 2024 campaign, returning to his cherished rally stage — where he is often at his most reckless.

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Image: Germán & Co

The Marvellous Boys of Palo Alto

From Silicon Valley Bank to Sam Bankman-Fried, the recent scandals upending the tech industry are rooted in a longer tradition of innovation and impunity.

The New Yorker By David Leavitt

Not long before his death in 2007, my father told me that he “thought he might have” coined the term information technology. It turns out he was right. In an article titled “Management in the 1980’s,” published in the November, 1958, issue of the Harvard Business Review, Harold J. Leavitt and his co-author, Thomas L. Whisler, identify a “new technology” that “has begun to take hold in American business, one so new that its significance is still difficult to evaluate.” Since this technology “does not yet have a single established name,” the article notes, “we shall call it information technology. It is composed of several related parts”: “techniques for processing large amounts of information rapidly”; “the application of statistical and mathematical methods to decision-making problems”; and “in the offing, though its applications have not yet emerged very clearly . . . the simulation of higher-order thinking through computer programs.” By the end of his life, my father had adopted a far more skeptical attitude toward the organizations he earned his living trying to understand and improve. I am convinced that, if he soft-pedalled his immense if unwitting contribution to twenty-first-century English, it was because, in the deep pessimism of his old age, the last thing he wanted was to be remembered as the progenitor of the I.T. guy.

When my father co-wrote “Management in the 1980’s,” he was thirty-six and a professor at the Carnegie Institute of Technology (now Carnegie Mellon), in Pittsburgh. He was married and had two children. I was born in 1961, and in 1966 he accepted a position at the Stanford Graduate School of Business—an upheaval for my mother, who was forced to give up the dream house in Pittsburgh that they had just built, and a trauma for my brother and sister, who had to face the unhappy prospect of changing schools as teen-agers.

For me, on the other hand, the timing couldn’t have been better. At five, I hadn’t had enough of a life in Pittsburgh to register the loss. Instead, from the morning I started kindergarten at Stanford Elementary School (now defunct) to the afternoon I graduated from Henry M. Gunn Senior High School, Palo Alto was my home, its streets my streets, its parks my parks. When I wasn’t at school, I could usually be found biking around the some eighty-thousand-acre Stanford campus, which I regarded as my own personal back yard. The campus opened out directly from our house, a 1917 exemplar of the “California Cottage Style,” situated amid redwoods and sloping lawns in a neighborhood known colloquially as the faculty ghetto. Because Stanford’s charter forbade the sale of any of its some eighty-thousand acres in perpetuity, only professors and administrators could buy houses in the faculty ghetto—and only houses. To the land on which the houses were built—Stanford land—they were given a fifty-one-year lease, a policy that has led to what Theresa Johnston aptly termed the Stanford inheritance quandary, since it effectively bars homeowners from leaving their houses to their children, and that provided the jumping-off point for my novel “The Body of Jonah Boyd.”

My parents were the house’s third owners. We owed to their predecessors the fire pit that had been dug as a swimming pool but repurposed during the Depression, and the koi pond in which the koi kept dying, and the orchard of guava and persimmon trees where, as a small child, I played barefoot, sometimes stepping on bees. All told, it was an idyllic place to grow up, adults kept assuring me, the very threshold of a future that promised to be progressively governed, spiritually fulfilling, and technologically mind-blowing—which may be why, as I hit puberty, my intellectual and emotional compass began to point ever more intently East, or “back East,” as Californians say, since, for us, the East signified regression, retrogression, withdrawal into a stodgy and mildewed past. Yet this was precisely what I wanted. I wanted the stodgy and mildewed past. “Haunted” is the word that Malcolm Harris uses to describe Palo Alto, in “Palo Alto: A History of California, Capitalism, and the World,” his welcome and necessary new book—and it’s exactly right. To grow up in Palo Alto is to grow up amid obsolete visions of the future (“Management in the 1980’s”), unsettling relics of the past, marvellous dead boys. It is to grow up haunted.

Of course, if you keep travelling west to east, you end up back where you started. In 1992, in the wake of my mother’s death and my father’s remarriage, he called to tell me that he had decided to sell the house in which I’d grown up. By then, I was living in Italy, the third stop in an eastward journey that had already taken me to New Haven and New York. My brother was in Montreal. Only my sister remained close enough to home to suffer any real pangs of loss when our father, forbidden by Stanford to leave his own house to his own daughter, sold it instead to Joe Bankman and Barbara Fried, married law professors. That same year, the elder of the Bankman-Frieds’ two sons was born. His name was Sam.

I met the Bankman-Frieds once, in 2015. “Houses have no loyalty,” Geoff Dyer writes, in “Out of Sheer Rage,” a sentiment that echoed in my mind as Joe and Barbara, in shorts and T-shirts, took me on a tour of the rooms in which I had grown up and that, after nearly forty years, I barely recognized. Both of them struck me as intellectually restless and professionally ambitious in a way that reminded me of the adults I had known as a child—my parents’ friends and my friends’ parents. In addition to teaching at the law school, Joe was getting a doctoral degree in psychology, and Barbara had started a second career as a fiction writer. (The previous year, I had published one of her stories in the literary journal that I edit. A few years on, she would help to found the Democratic fund-raising organization Mind the Gap.) My memory of the hour or so that I spent with the Bankman-Frieds is tinged with an unease of which even now I have trouble locating the source. Possibly, it was an intimation of Palo Alto’s hauntedness, but one that seemed to emanate more from the future than the past—as if the multibillion-dollar failure of FTX, which Sam Bankman-Fried would not co-found for another four years, and as a result of which he would be placed under house arrest in his family home (my family home), were already exerting a proleptic influence, as if his fall were foreordained. Probably it was just the disquiet you experience when your childhood quarters take on the patina of new inhabitants and reveal the truth that they were never really yours.

The legend of Stanford is the legend of a marvellous boy. On March 13, 1884, Leland Stanford, Jr., Leland and Jane Elizabeth Lathrop Stanford’s only son, died of typhoid in Florence, two months shy of his sixteenth birthday. Demolished, his parents decided to memorialize him with a university, and in so doing unleashed upon the land they owned south of San Francisco the ghost of the tall, handsome, white boy genius who wanders its porticoes to this very day. True, Leland, Jr., himself died before his potential could be tapped, but that didn’t mean there weren’t plenty of other tall, handsome, white boy geniuses for Stanford to foster—an ethos that led Lewis Terman, who introduced the Stanford-Binet I.Q. test, to undertake the famous “genius study.” Using his own test as a measure, he winnowed out from California’s population of schoolchildren those who scored higher than 135—they were known colloquially as the Termites—and set about monitoring their intellectual progress. As Harris observes in his book, Terman’s belief “that the adult’s potential was always already observable in the child” effectively defined “potential” as a marketable commodity in its own right, and initiated a Stanford version of the drama of the gifted child.

“The children of California shall be our children,” Leland Stanford told his wife when they decided to found the university. The next question—a contentious one, as it turned out—was what the university was supposed to do with these children. For her part, Jane Stanford hoped to cultivate what she called the “soul germ” in her students. She also wanted to make psychical research part of the Stanford curriculum, much to the chagrin of the university’s first president, David Starr Jordan, whose vision of Future Stanford was as a training ground for the cadre of (tall, handsome, white, male) geniuses into whose hands its legacy—and money—could be safely passed. The conflict came to a head in 1905, when Jane, at a moment when Jordan was trying to scrape together the funds needed to pay his faculty what he felt they deserved, allocated five thousand dollars to bring no less a star of psychical research than William James to Palo Alto. But then Jane died of strychnine poisoning. At last unfettered, he diverted the psychical research money to psychology studies and went full steam ahead with his plan for a technocratic Stanford, leaving its appendix, Palo Alto, to absorb the soul germ, which flourished in its soil.

The Palo Alto of my youth was a far stranger and more remarkable place than I gave it credit for being. On California Avenue, there were head shops and herbal-medicine shops and an old-fashioned pharmacy with Clairol boxes and comic-book racks. There was the Fine Arts Theatre with its Art Deco façade. There was Sheik’s, the Indian restaurant where you sat on metal chairs exactly like the ones at my elementary school and ate off paper plates. Other streets offered other wonders: Plowshare Books, on University Avenue; East West Books and the legendary Kepler’s, on El Camino Real; both World’s Indoor Records and Chimera Books and Music were situated in the grid of streets that made up downtown Palo Alto. (With the exception of East West and Kepler’s, all these places are long gone.) At the Stanford Coffee House, my guitar teacher, Linda Waterfall (her real name), performed on Friday nights. Transcendental meditation, Gestalt therapy, and E.S.T. (Erhard Seminars Training) were at the apex of their popularity in the Bay Area, as was IAMathon, a sort of junior version of E.S.T. that my chemistry teacher suggested I join in order to alleviate my test anxiety. (Test anxiety! The middle school I’d attended was named after Terman. In such an atmosphere, how could one not have test anxiety?)

At the Printers Inc. bookstore, where I worked in the summer of 1979, the biggest sections were Computer Science and New Age, with Poetry coming in a close third. This coupling of hard science and soft theology wasn’t anything new. On the contrary, it dated back at least to the early years of the twentieth century, when the Irish poet John Varian moved to Palo Alto with his wife, Agnes. Ardent theosophists, and part of the Dublin literary circle in whose center W. B. Yeats stood, the Varians belonged to the Temple of the People, a theosophist community with headquarters in Halcyon, near Pismo Beach, and a thriving Palo Alto base. They had three sons, two of whom, Russell and Sigurd, would go on to develop the klystron tube and subsequently found Varian Associates, one of Palo Alto’s first tech firms. (As Harris notes, it was in Halcyon, just inland from the Oceano dunes, that the Varians did their initial work on the klystron—further evidence of the extent to which technological and New Age endeavors, which Jordan regarded as inimical, were becoming elsewhere in California ever more entwined.) Every weekday, I biked past the Varian headquarters on my way to school. A good friend of my sister’s lived in Ladera, a neighborhood that had begun life in the mid-nineteen-forties as a housing coöperative organized along Halcyonic lines. Sigurd Varian and the novelist Wallace Stegner were among its early members. The coöperative failed, and today a house in Ladera costs upward of three million dollars.

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Cooperate with objective and ethical thinking…

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News round-up, March 20, 2023

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Most read…

Global stocks sink after Credit Suisse takeover

Investors worry banks are cracking under the strain of unexpectedly fast, large rate hikes over the past year to cool economic activity and inflation.

Le Monde with AP and AFP, March 20, 2023

Putin praises China's willingness to play 'constructive role' in ending War in Ukraine

Xi Jinping heads to Russia on Monday hoping to deliver a breakthrough on Ukraine as Beijing seeks to position itself as a peacemaker.

Le Monde with AFP, March 19, 2023   

Solar energy is being harnessed everywhere (except France)

Thanks to falling costs, easy construction, and flexibility, solar power installations are being built everywhere from China to the United States.

Le Monde by Luc Bronner, March 19, 2023 

US and EU begin negotiations on critical minerals access for EV batteries

European leaders are worried that EU-based energy and auto companies will be shut out or move to the US. They hope the talks will result in one significant exemption for the EU.

Le Monde with AFP, March 10, 2023 

In Rio de Janeiro, rooftop tanning is all the rage

The practice is mostly reserved for women, and is especially popular in suburban outskirts, far from the beach. But it is criticized by dermatologists, who consider it harmful to the skin.

Le Monde by Bruno Meyerfeld (Rio de Janeiro, March 19, 2023

SVB's European ShockwavesSilicon Valley Brings Disruption to Global Finance

Rising interest rates have plunged the financial markets into turbulence. Regional banks in the U.S. are facing bank runs while in Europe, Credit Suisse is on the brink. Is a new global financial crisis coming?

Spiegel by Tim Bartz and Michael Brächer, 17.03.2023

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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UBS Group and Credit Suisse logos are seen in this illustration taken March 18, 2023. DADO RUVIC / REUTERS

Global stocks sink after Credit Suisse takeover

Investors worry banks are cracking under the strain of unexpectedly fast, large rate hikes over the past year to cool economic activity and inflation.

Le Monde with AP and AFP, March 20, 2023

Global stock markets sank on Monday, March 20, after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.

Hong Kong's main index slid more than 3%. Market benchmarks in Frankfurt and Paris opened down more than 1%. Shanghai, Tokyo and Sydney also declined. Wall Street futures were off 1%. Oil prices plunged more than $2 per barrel.

Swiss authorities on Sunday announced UBS would acquire its smaller rival as regulators try to ease fears about banks following the collapse of two U.S. lenders. Central banks announced coordinated efforts to stabilize lenders, including a facility to borrow US dollars if necessary.

The collapse earlier this month of regional lenders Silicon Valley Bank, Signature Bank and Silvergate has sparked fears of contagion across the industry as worried customers withdraw their cash.

The crisis led US authorities last week to promise support for other lenders and depositors, in a move aimed at preventing a run on banks. Also, Wall Street titans including JP Morgan, Bank of America and Citigroup pledged to inject $30 billion into under-pressure lender First Republic Bank.

Every morning, a selection of articles from Le Monde In English straight to your inbox

However, fears of another financial crisis flared again when the biggest shareholder in Credit Suisse, Switzerland's second-biggest bank, said it would "absolutely not" up its stake a day after its annual report cited "material weaknesses" in internal controls at the firm.

The lender later announced it would borrow nearly $54 billion from the nation's central bank to provide "support."

But that was not enough to lift confidence and on Sunday UBS – Switzerland's biggest bank – said it would buy the firm for $3.25 billion following crunch talks in hopes of stopping a wider international banking crisis. The deal was vital to prevent economic turmoil from spreading throughout the country and beyond, the government said. The move was welcomed in Washington, Frankfurt and London.

Meanwhile, the Fed and the central banks of Canada, Britain, Japan, the European Union and Switzerland said they would launch a coordinated effort Monday to improve banks' access to liquidity, hoping to calm worries.

Focus on Fed decision

But Asian traders tracked Friday's losses in New York and Europe.

Hong Kong fell 3.5%, with heavyweight HSBC off more than six percent on worries about its exposure to risky bonds related to Credit Suisse. Standard Chartered was down a similar amount and Hang Seng Bank lost more than two percent.

The losses came even as the city's de facto central bank said its banking sector had "insignificant" exposure to Credit Suisse. Japan's government also said the country's "financial organizations on the whole have ample liquidity and capital, and the financial market is stable overall."

France's central bank chief said Credit Suisse woes "don't concern" European banks.

Other regional bank shares also hit, with Japan's Mitsubishi UFJ Financial, National Australia Bank and India's ICICI down more than one percent each. Tokyo, Sydney, Seoul, Singapore, Taipei, Wellington, Manila, Mumbai and Jakarta were well in the red.

Shanghai rose after the Chinese central bank cut the amount of cash banks must keep in reserve, hoping to boost the country's economy. Futures in the United States and Europe reversed earlier gains.

"Investors are likely keeping a look over their shoulder for the next disaster in a high-interest rate (and inflationary) environment, so at best we might see markets recover some of last week's losses," said Matt Simpson at City Index.

Traders are now nervously awaiting the Fed's next policy meeting, which ends Wednesday. They were already in a downbeat mood before the latest crisis erupted as they contemplated more rate hikes to rein in stubbornly high inflation.

There is a debate about whether it will continue lifting as the collapse of SVB has been widely linked to the sharp rise in borrowing costs over the past year. Some observers expect at least one more increase but possibly a hold afterward, while there is a growing belief that cuts could be announced before the end of the year, despite prices still rising faster than the Fed would like.

Data showing that bank borrowing from the Fed's discount window hit a record high of more than $150 billion for the week ending March 15 indicated stress in the sector, analysts said.

Oil prices extended the big losses suffered last week on worries about demand as traders fret over a possible recession.

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Image: In this file photo taken on June 6, 2019, Russia's President Vladimir Putin (L) and China's President Xi Jinping attend a ceremony presenting Xi with a degree from the Saint Petersburg State University on the sidelines of the St. Petersburg International Economic Forum in Saint Petersburg. DMITRY LOVETSKY / AFP

Putin praises China's willingness to play 'constructive role' in ending War in Ukraine

Xi Jinping heads to Russia on Monday hoping to deliver a breakthrough on Ukraine as Beijing seeks to position itself as a peacemaker.

Le Monde with AFP, March 19, 2023   

President Vladimir Putin on Sunday, March 19, welcomed China's willingness to play a "constructive role" in ending the conflict in Ukraine, saying Sino-Russian relations were "at the highest point". His Chinese counterpart Xi Jinping heads to Russia on Monday hoping to deliver a breakthrough on Ukraine as Beijing seeks to position itself as a peacemaker.

The quality of ties between Moscow and Beijing is "higher than the political and military unions of the Cold War era", Putin said in an article written for a Chinese newspaper and published by the Kremlin on the eve of Xi's visit. Putin said he had "high expectations" of his talks with the Chinese leader. "We have no doubt that they will give a new powerful impetus to the whole bilateral cooperation," he added.

Putin hailed "China's willingness to play a constructive role in resolving" the year-long conflict in Ukraine. He said he was grateful to Beijing for its "balanced" stance on events in Ukraine and its understanding of the conflict's backstory and the "real reasons" behind it.

"Russia is open to a settlement of the Ukrainian crisis by political-diplomatic means," Putin assured in the article. However, he insisted on Kyiv's recognition of "new geopolitical realities", namely Russia's annexation last year of four Ukrainian regions, as well as Crimea back in 2014. "Unfortunately, ultimatums to Russia show that (their authors) are far from these realities and have no interest in seeking a solution," he added.

Announcing the trip Friday, Chinese foreign ministry spokesman Wang Wenbin said Beijing would "play a constructive role in promoting peace talks". Freshly reappointed for a third term in power, Xi is pushing a greater role for China on the global stage, and was crucial in mediating a surprise rapprochement between Middle Eastern rivals Iran and Saudi Arabia this month.

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Image: Le Monde

Solar energy is being harnessed everywhere (except France)

Thanks to falling costs, easy construction, and flexibility, solar power installations are being built everywhere from China to the United States.

Le Monde by Luc Bronner, March 19, 2023 

Workers have been installing a solar panel on average every two minutes at the massive Al Dhafra solar power plant, south of Abu Dhabi. Launched in 2020 by a consortium of the French EDF Renewables, the Chinese Jinko Power and Emirati public operators, the construction site is nearing completion. With 4 million solar panels and an installed capacity of 2 gigawatts (GW), it is one of the largest in the world. The electricity that it will generate for the next 30 years – enough to power 160,000 homes – has already been bought up.

Solar panels can be seen everywhere: in the middle of desert areas, on private roofs, in parking lots, above warehouses and factories, on lakes, at the edge of highways and on agricultural land as well as in cleared forests. They are now being installed at an unprecedented rate across the globe due to the breathtaking speed at which photovoltaic technology is expanding its reach. According to the International Energy Agency (IEA), solar power is expected to account for 2,350 GW worth of potential power worldwide within four years, surpassing hydroelectricity in 2024, natural gas in 2026 and coal in 2027 in terms of electricity production.

In 2021, the sun – which by its nature can only provide energy during the day – accounted for 1,000 terawatt-hours (TWh) of electricity worldwide out of 27,000 TWh consumed (from nuclear, hydroelectric, wind, etc.). Solar power's share for 2022 is on track to exceed 25%, spurred by the fight against climate change and the rise in energy prices, in a trend that is only expected to continue rising. In its annual Renewable Energy Report, the IAE concludes that despite currently higher capital costs due to raw material prices, large-scale solar photovoltaics is the cheapest option for new electricity generation in a large majority of countries around the world. "The cost of solar has dropped," said Bruno Bensasson, CEO of EDF Renewables. "What had appeared to be an expensive product just for rich countries has become competitive for all the world's economies."

Accelerating the transition

Most major industrialized countries have broken their own records in 2022 or will break them in 2023: in new power plants installed, in energy produced or in projects scheduled for the next few years. "The energy crisis we are experiencing has accelerated the transition to renewables that we were having difficulty making for reasons of climate alone," said Richard Loyen, one of France's leading experts and the president of Enerplan, an organization of professionals in the field.

Take China: 87.4 GW of solar capacity was installed in 2022, per the National Energy Administration, far exceeding the previous record of 54.9 GW in 2021. The figure could have been even higher if supply difficulties had not slowed production. For 2023 and the ensuing seven years, Chinese manufacturers expect between 95 to 120 GW of capacity to be installed annually around the country. Chinese companies have also been investing abroad, as demonstrated by an agreement with Uzbekistan, announced in mid-February, for the development of 2 gigawatts of panels within a few months. Nonetheless, this progress only marginally offsets the impact of carbon-based energy (gas and coal) in this country with enormous energy demands.

The trend has also been stunning in the United States, particularly in states like California and Texas. The Inflation Reduction Act (IRA), championed by President Joe Biden as accelerating the energy transition and promoting the country's reindustrialization, will further intensify efforts. For 2023, the US Energy Information Agency has announced projects representing 29 GW, nearly triple the figures from 2020. A study by Princeton University has suggested that growth will continue, equating to 75 and 105 GW from panels to be installed in 2026 and 2027 thanks to IRA funding, with thousands of potential new jobs.

Nuclear lobby

The same applies to Brazil and India and also across Europe (an additional 41 GW installed). Germany (7.9 GW), Spain (7.5), Poland (4.9) and the Netherlands (4) have experienced particularly significant increases. In the Netherlands, solar accounted for 14% of electricity consumption over the year, a record in Europe, even though the country experiences less sunlight than the continent's southern nations do. "The Netherlands has shown that simple and effective policies can promote the growth of solar," according to the think tank Ember Climate, calling attention to an increase in the number of rooftop installations.

France appears to be moving in the opposite direction. In 2022, 2.6 GW worth of solar panels were installed, a figure lower than that for 2021 (2.8 GW). "In the context of inflation, where many projects seemed to have become stymied, we've finally had a rather good year, even if it is not entirely satisfactory," said associates of Minister for Energy Transition Agnès Pannier-Runacher, in an attempt to put things into perspective. There are several reasons for the lag in France. First, there is the role played by nuclear power, a decarbonized form of energy that has supplied energy companies with a reason for not advancing in solar as quickly as they do in other countries. Then there were the mishaps that France experienced in the 2000s, when the development of photovoltaic panels was subsidized at a considerable cost. This put the Ministry of Finance in a difficult situation and gave the nuclear lobby additional arguments not to make solar energy a priority. It is true that photovoltaic energy accounted for 4.2% of national electricity consumption in 2022, or 4 TWh more than in 2021. At the same time, in order to cope with a shortfall of nuclear power, gas production increased by 11 TWh and imports by 30 TWh, according to RTE, which manages high-voltage lines in France.

The French Renewable Energy Acceleration Bill, adopted in January, marks an important but inadequate step in the view of industry players. To meet France's commitments, 4.4 GW of solar power must be in place by 2023. "To keep up with the pace of the PPE [multi-year energy plan] and terms outlined by the president [Emmanuel Macron] in his speech on energy in Belfort [in February 2022], we must therefore aim for more than 3 GW per year by 2028. It's a challenge, but we can do it," said the office of the minister for energy transition. According to RTE, 16 GW from solar projects were pending installation as of early 2023, a figure that has never before been reached. Consequently, when making its projections, RTE will explore a scenario in which the growth of solar could even exceed 7 GW per year. For its part, the government intends to promote individual usage by households or small businesses, just as the Spanish have done on a major scale. "Rather than having a tariff shield, in the face of the energy crisis, they have promoted home consumption from rooftop solar installations," said Loyen.

A tall order

The other issue is the manufacturing of panels. With solar's emergence as a strategic energy source, the ability to produce its components has become a matter of sovereignty. Yet, according to the IEA, more than 80% of the various components come from China, whether it be silicon, cells, panels or other parts. "China’s investment in clean energy supply chains has been instrumental in bringing down costs worldwide for key technologies, with multiple benefits for clean energy transitions. At the same time, the level of geographical concentration in global supply chains also creates potential challenges that governments need to address," said the IEA. The challenge is a global one. Biden, through the IRA, is seeking to attract investors and relocate some industrial production. India has ambitions to build giant factories. In Europe, the European Commission has launched a solar industry alliance to increase panel production from 4 to 30 GW by 2025.

The hurdle is especially high for the European continent. One of China's leading manufacturers, Longi Green Energy Technology, announced in early February that it was planning a $6.7 billion investment to double its manufacturing capacity. Within a rather short time frame, the new plant could produce an additional 50 GW of solar cells per year. In comparison, Europeans welcomed the announcement by Enel (an Italian energy company at the forefront of renewable energy) of a €600 million investment to support a 15-fold increase in production at a plant in Sicily. By 2025, this plant will be the largest in Europe... with an expected 3 GW.

The challenge of connecting to the grid

EDF Renewables holds Photowatt, a pioneering panel production company in its portfolio, but is looking to sell it. The company is losing €30 million a year, EDF Renewables CEO Bensasson said at his hearing before the parliamentary commission of inquiry into France's energy sovereignty. Projects are being developed, such as the one backed by Carbon, a company that announced on March 3 that it wanted to set up a multi-gigawatt cell and panel factory by 2025 on an industrial site in Fos-sur-Mer, in southern France. Pierre-Emmanuel Martin, one of the company's founders, said, "The Germans and the Chinese are leading the way today. We're starting from a long way back in terms of industry. But solar energy is booming around the world and we want to position ourselves on the international market."

The issue goes far beyond the energy crisis and the consequences of the war in Ukraine. All projections have pointed to a huge increase in global electricity consumption due to the development of battery-powered vehicles and the gradual decarbonization of industry. "The progress underway could increase demand faster this decade than most experts had envisioned," the think tank Ember noted in its latest report. Most of this increase is expected to be absorbed by renewables, especially solar, which is easier to install.

That is, provided that the millions of new panels are able to be connected to electrical transmission networks. Bill Gates, whose first student job was writing software for one of the power grids in the US, sees this as a critical issue for the energy transition. "Right now, over 1,000 gigawatts worth of potential clean energy projects are waiting for approval − about the current size of the entire US grid − and the primary reason for the bottleneck is the lack of transmission," he wrote in late January on his public blog.

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Image: European Commission President Ursula von der Leyen speaks as she meets with President Joe Biden in the Oval Office of the White House on March 10, 2023. ANDREW HARNIK / AP

US and EU begin negotiations on critical minerals access for EV batteries

European leaders are worried that EU-based energy and auto companies will be shut out or move to the US. They hope the talks will result in one significant exemption for the EU.

Le Monde with AFP, March 10, 2023 

European Commission President Ursula von der Leyen speaks as she meets with President Joe Biden in the Oval Office of the White House on March 10, 2023. ANDREW HARNIK / AP

President Joe Biden and top EU official Ursula von der Leyen announced Friday, March 10, the start of negotiations on granting access to European producers seeking to export critical minerals for EV batteries under a new US program to stimulate the green economy.

"We intend to immediately begin negotiations on a targeted critical minerals agreement for the purpose of enabling relevant critical minerals extracted or processed in the European Union" to qualify for the US government subsidies under Biden's signature Inflation Reduction Act [IRA[ stimulus plan," they said in a joint statement.

Batteries are a vital part of the US plan for a massive expansion of electric vehicle production. The IRA sets aside some $370 billion for tax credits and clean energy subsidies but contains a "made-in-America" requirement for qualification.

European leaders have grown worried that EU-based energy and auto companies will be shut out or move to the United States. The aim of the critical mineral talks will be to provide one significant exemption for the EU.

"Today we agreed that we will work on critical raw materials that have been sourced or processed in the European Union and to give them access to the American market as if they were sourced in the American market. We will work on an agreement," von der Leyen told reporters after meeting with Biden.

In their joint statement, the two leaders stressed that the IRA and new European initiatives meant to mirror the program, such as the Green Deal Industrial Plan, should work in tandem. "Both sides will take steps to avoid any disruptions in transatlantic trade and investment flows that could arise from their respective incentives. We are working against zero-sum competition so that our incentives maximize clean energy deployment and jobs – and do not lead to windfalls for private interests," the statement said.

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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On Elaine Figueiredo dos Santos' rooftop tanning salon, one of the most famous in Rio. BRUNO MEYERFELD / LE MONDE

In Rio de Janeiro, rooftop tanning is all the rage

The practice is mostly reserved for women, and is especially popular in suburban outskirts, far from the beach. But it is criticized by dermatologists, who consider it harmful to the skin.

Le Monde by Bruno Meyerfeld (Rio de Janeiro, March 19, 2023

On Elaine Figueiredo dos Santos' rooftop tanning salon, one of the most famous in Rio. BRUNO MEYERFELD / LE MONDE

"Hey, girls, is anyone naked? No one has their little boobs out?!" Amused, Elaine Figueiredo dos Santos asked us to wait a few moments before going up to the roof of her little house. Long enough to make sure that her rooftop, on the skirt of a mountain dotted with tropical bushes, was ready to welcome a male journalist. Usually, men remain strictly prohibited.

It was almost 11 o'clock in the morning, on a Sunday in March, and Rio de Janeiro was baking under a sweltering summer sun. But Elaine's rooftop terrace was crowded: about 20 women in bikinis, lying on deck chairs, were offering their skin to the burning rays. Some were on their stomachs, others on their backs. Young employees passed by to spray them with cold water, under the watchful eye of the proprietress.

In Realengo, a working-class district in western Rio de Janeiro, lajes de bronzeamento ("tanning slabs") have become popular venues for Cariocas (women from Rio) to bask in the sun. At 47 years old, Elaine runs one of the city's most famous lajes, painted and decorated in green, her favorite color. Around here, the "boss" is known by her nickname, Nani Chicleteira (meaning "Nani Gum-Chewer").

A grail called 'marquinha'

"I've always loved to sunbathe. My friends would ask me if I could help them get a good tan. That's how I decided to open this place five years ago," said this cheerful woman, born and raised in Realengo. Success came quickly: Nani (who charges 50 reais, equivalent to €9, per session) employs six assistants and has to turn people away on sunny days. "When there's a line, we hand out entry tickets in order of arrival!"

"Nani Gum-Chewer" does not just provide deck chairs. What her Carioca clients want first and foremost is to get a marquinha ("little mark"), the thin pale tan line left by a bikini. A kind of natural tattoo, the marquinha is all the rage at Rio's parties and beaches, as well as in many other parts of Brazil.

It requires strategy. To obtain the perfect marquinha, Nani has her technique. She makes bikinis out of adhesive tape (called a fitinha), to be stuck directly on the clients' skin, and rubs them with a homemade cream containing paraffin, a petroleum derivative that accelerates tanning. "In just one hour, we get the result of a whole day in the sun!" Nani proclaimed proudly.

'It has become a social institution'

In Rio alone, there are said to be several hundred of these tanning rooftops. "Walk around Realengo, you'll see that 80% of women have a marquinha," said Tatiana, 41 years of age, who came to enhance her "little mark" at Nani's place. "It's super sexy, men love it! Today, everyone wants one: black, white, old, young, fat, skinny... For me, it's impossible to go out without my marquinha!"

It is difficult to ascertain the origin of this trend. According to some, the first lajes appeared 20 years ago in the rural state of Goias, in central western Brazil, before spreading to the coasts. In any case, it has exploded since 2017 and the release of the famous music video "Vai Malandra" by Anitta. The superstar of Brazilian funk appears in the video dancing at a rooftop tanning parlor, her body covered with a tiny bikini made of tape.

In six years, the phenomenon has become increasingly professional. Some laje owners have become famous businesswomen, such as Erika Romero Martins, known as "Erika Bronze." Also from Realengo, this 40-year-old has become a key player in the industry, with 10,000 reported clients, 344,000 followers on Instagram, and her own line of bikinis and tanning products. She was the person Anitta contacted for a place to shoot "Vai Malandra."

"The —laje— has become a social institution," said Euler David de Siqueira, a sociologist at the Rural University of Rio, one of the few researchers who have studied the phenomenon. "The rooftop tanning parlor is a key place for women from the outskirts of the city who don't have access to the beach, which is too far away." Indeed, Realengo is over 50 kilometers from Copacabana, a distance that takes two hours to travel.

'The elite prefers to repress the culture of the peripheries'

The marquinha is both an aesthetic and a social marker. "In addition to the 'sexy' aspect, the women of the favelas can show that they also sunbathe, that they have time to take care of their bodies and have access to leisure activities. We can read it as an affirmation that the privilege of tanning is not the exclusive domain of the rich and the Whites," said Siqueira.

In spite of its popularity, the practice of marquinha is still frowned upon. Dermatologists are up in arms against this trend, which they consider harmful to the skin. They warn of the risks of paraffin, sun exposure, and especially ultraviolet radiation lamps – available at many rooftop parlors – which are used when the weather is cloudy. This is prohibited by Brazilian law, which forbids the use of UV equipment for artificial tanning.

'Most of these women are working in a totally illegal manner. The police can come at any time to end their business and throw them in jail.' José Dimas Marcondes, lawyer.

"The result of this unfair law is that most of these women are working in a totally illegal manner. The police can come at any time to end their business and throw them in jail," said José Dimas Marcondes, a lawyer for many rooftop owners in Rio. "Instead of integrating and helping the phenomenon, the elite prefers once again to repress the culture of the Black and poor peripheries, as was the case with samba, capoeira or funk."

Nani Chicleteira makes sure to take the greatest precautions, with the sun as well as with UV. Her protocols include careful examination of the skin, timed and limited tanning time, and mandatory use of sunscreen. "I am very careful with the sun and with UV. I don't let the girls tan for more than an hour. I prefer to send them home all white rather than all burned!" she said. Her wall is covered with about twenty framed diplomas and certificates in dermatology, cosmetology and first aid.

"We are described in the media as agents of cancer, while we are just entrepreneurs who create jobs and beauty," said Nani Chicleteira, who also offers training for women who want to open their own rooftops. The battle for the marquinha has just begun, "and we will win it!" said Nani. In Rio, the summer is almost over.

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Cooperate with objective and ethical thinking…

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Image: Germán & Co by Shutterstock

SVB's European ShockwavesSilicon Valley Brings Disruption to Global Finance

Rising interest rates have plunged the financial markets into turbulence. Regional banks in the U.S. are facing bank runs while in Europe, Credit Suisse is on the brink. Is a new global financial crisis coming?

Spiegel by Tim Bartz and Michael Brächer, 17.03.2023

It’s not often that central bank executives directly inform the public at large about what they discuss behind closed doors. But Thursday saw one of those rare moments. Christine Lagarde, president of the European Central Bank (ECB), went before the press in Frankfurt to announce that it was bumping up interest rates by half a percentage point, just as it had in February.

Unusually, though, Lagarde made clear that the decision had not been unanimous. She said that of the 26 members of the bank’s Governing Council, there were "three or four that did not support the decision" to raise rates and would have preferred to wait and see how the situation in the banking sector would develop. As she made clear: "It’s not business as usual."

Lagarde’s noteworthy comments came on the heels of several days of turbulence on global capital markets that awakened ominous memories of autumn 2008 and the ensuing financial crisis. A number of pressing questions have suddenly arisen, and the press conference held by the ECB president did little to change that: Whether the markets can be restabilized; whether more banks will start wobbling; whether we are facing a new crisis.

It all began a week ago with the collapse of the Silicon Valley Bank (SVB) in California, a financial institution known in the startup scene, but which most average investors had never heard of before. The bank experienced rapid growth in recent years, but completely misjudged the consequences of the recent interest rate increases and was facing collapse as its panicked clients rushed to empty their accounts.

Following a series of emergency meetings, American financial authorities were forced to do something a number of regulatory and liquidation provisions had been designed to prevent: rescue a bank with government help.

Shortly afterward, U.S. President Joe Biden spoke to the country: "Americans can have confidence that the banking system is safe," he said on Monday. "Your deposits will be there when you need them."

They were statements reminiscent of pledges made by other leaders during the last crisis. Then-German Chancellor Angela Merkel told her compatriots: "Your savings are secure." Mario Draghi, Lagarde’s predecessor at the ECB, was even more dramatic: "Whatever it takes," were his words.

“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them."

U.S. President Joe Biden

Despite Biden’s efforts, though, stock markets around the world plunged this week, with bank shares bearing the brunt of the slaughter. Investor trust eroded by the minute, and even German financial institutions, like Deutsche Bank and Commerzbank, saw their stock prices temporarily plummet into the abyss.

The situation at Credit Suisse then provided the cherry on top of this troublesome week. For years, the Swiss bank has been stumbling from one homemade scandal to the next. Once a beacon of the Alpine banking industry, the institution burned through billions with bad investments in addition to providing financial services to corrupt politicians, war criminals, human traffickers and drug dealers. In the fourth quarter of 2022 alone, wealthy and concerned clients withdrew 107 billion francs from the financial institution. The exodus has continued this year.

Founded in 1856, Credit Suisse is intricately linked internationally and considered "too big to fail" – and is now seen as the greatest threat currently facing the global financial system. In an effort to plug the gap, Credit Suisse last October turned to the Saudi National Bank for fresh capital, an ignominy for a country that sees itself as a bastion of stability and political independence. The Swiss still haven’t gotten over the trauma of Swissair’s collapse in 2001 and the 2008 bailout of its largest bank, UBS, the headquarters of which lie across Zurich’s Paradeplatz square from Credit Suisse.

With its 10-percent holding, Saudi Arabia is now Credit Suisse’s largest investor, but the Gulf country’s financial elite is clearly not entirely pleased about that fact. In a televised interview on Wednesday, Saudi National Bank President Ammar Al Khudairy ruled out sending additional cash to Switzerland, saying it was "a regulatory issue" – only to then add: "I can cite five or six other reasons."

He had hardly finished speaking before Credit Suisse stocks fell off a cliff – to the point that the Swiss National Bank had to step in. Credit Suisse "meets the capital and liquidity requirements imposed on systemically important banks," the SNB said in a public statement. Such statements are only made when the financial system faces a systemic danger.

And Credit Suisse is, in fact, well endowed with capital and securities that can quickly be sold off if necessary. But once customers lose trust and begin to abandon a bank en masse, survival can quickly be at stake – as happened in faraway California.

Overnight Bailout

Just how acute worries have become about Credit Suisse could be seen overnight from Wednesday to Thursday. The SNB quickly put together a package of 50 billion francs (the equivalent of 51 billion euros) to boost Credit Suisse’s liquidity in case customers continued to withdraw their assets. No details were provided regarding the conditions attached to the liquidity injection, but they were likely generous. As a sign of strength, the beleaguered bank also announced it was buying back up to 3 billion francs worth of debt.

"Without SNB intervention, Europe would have had its own Lehman moment," says Volker Brühl, the managing director of the Center for Financial Studies who was active as an investment banker during the 2008 financial crisis. And the move produced the desired results for now: Credit Suisse share prices stabilized on Thursday, as did those of most other European financial institutions. In Frankfurt, Lagarde assured that "the euro area banking sector is resilient, with strong capital and liquidity positions" – only to then add: "In any case, our policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed."

It remains unclear, though, whether a Lehman moment may ultimately materialize anyway, and what the consequences of the sudden panic on the markets might have for the real economy. "These events could very well lead to a recession," says economist Tiffany Wilding from Allianz subsidiary Pimco, one of the largest investors in the world.

A man walking out of the Lehman Brothers building in September 2008 after losing his job: "Without SNB intervention, Europe would have had its own Lehman moment."

The latest signs of instability come just as it seemed the global economy had finally managed to get past the coronavirus pandemic and learned to live with Russia’s invasion of Ukraine. Furthermore, the banks – which were responsible for triggering the financial earthquake of 2008 – seemed solid, aside from Credit Suisse. Even longtime laggards like Deutsche Bank and Commerzbank have been earning billions in profits of late, thanks to a favorable climate.

They have profited from state aid to industry, a program that prevented large bankruptcies. And banks have also been able to borrow money from the ECB for the last several years without having to pay it back completely. And since the recent reversal in interest rate policy, they have been able to rake in billions without risk by parking their customers’ savings at the ECB.

Lagarde’s Thursday announcement that the ECB was raising its key rate by half a percentage point is yet another windfall for the banks. Deposits with the ECB now earn 3.5 percent, translating to additional earnings in the three-figure billions.

That is the positive side of the interest rate hikes that Lagarde, her U.S. counterpart Jerome Powell and others have introduced. Initially, they had underestimated the inflationary pressures that began accumulating in the real economy in 2021. But ever since Russia’s invasion of Ukraine and the resulting explosion in energy prices, they have been combating rising prices with a rapid series of interest rate increases.

The strategy pursued by Lagarde and Powell has yet to bear fruit when it comes to getting inflation under control. But the downsides of their monetary policy are becoming increasingly clear: Rapidly climbing interest rates weigh on stocks and bonds, threaten the investment plans of industrial corporations, hamstring real-estate markets and drastically limit the financial flexibility available to governments. The capitalist system, which is built on a foundation of debt, is under permanent duress.

"This is one price we’re already paying for years of easy money," wrote Blackrock CEO Larry Fink, founder of the world’s largest asset management company, in his annual letter to investors this week. The interest rate increases, he wrote, "was the first domino to drop." The question, he continued, is whether other dominoes are now to come.

The shift toward rising interest rates marks a radical departure from paradisiacal conditions, when the world was awash in cheap money and barriers to taking on debt were low. It was a time when business models such as the one pursued by Silicon Valley Bank found great success – until they didn’t any longer.

The San Francisco-based bank – the 16th largest in the U.S. when ranked by asset value – was at the center of an elite group of tech entrepreneurs and venture capitalists. A number of well-known startups held company and payroll accounts at SVB, flooding it with cash. The bank also accepted stakes in growth-stage startups as loan collateral. It was the financial industry groupie in digital La La Land.

It was a risky strategy, and it worked as long as new money was being injected into startups. But since the advent of inflation and rising interest rates, investors are no longer quite as free with their money. Californian tech firms have laid off tens of thousands of workers as liquidity has dried up.

Many young companies shift their money between accounts in the search for the best interest. Banks, by extension, must invest their customers’ money smartly so they can offer the best conditions.

SVB proved unable to do so. The startup stakes on the banks’ books lost significant amounts of money. And even worse were the investment mistakes made by CEO Greg Becker – in part because there was no one at the bank to look over his shoulder. For several months, the bank did without a chief risk officer, a situation which opened the door for poor investment decisions.

Becker invested his clients’ money almost exclusively in long-term U.S. government bonds. Such bonds are extremely safe, but they don’t produce much interest. And the longer the periods of such bonds are, the more difficult the situation becomes for banks when their customers begin demanding higher interest rates on their savings.

SVB could no longer navigate its way out of this corner. In order to quickly obtain cash, the bank had to sell its bonds – at a loss of $1.8 billion relative to purchase price.

That, too, is a bit of collateral damage that comes from rising interest rates: As the rates rise, bonds lose value. In the U.S. alone, banks are sitting on potential bond losses worth $620 billion. That’s not really a problem as long as they don’t have to sell those bonds and cement the losses – as SVB was forced to do.

"I understood that we had 72 hours to come up with a plan to address this catastrophe."

Anna Eshoo, Democratic Congresswoman for Silicon Valley

In Germany, the country’s Sparkassen savings banks were forced to write off 7.8 billion euros in 2022. But because their customers are frugal and stable, the institutions can simply hold onto their bonds for a couple of years until they mature and they can recoup the purchase price. They have the luxury of simply waiting out the potential losses.

SVB, however, didn’t have that luxury. Its attempt to balance out the loss by raising capital failed, triggering a chain reaction. SVB shares tanked and customers began pulling out their money – an unfathomable $42 billion just on Thursday of last week. A good, old-fashioned bank run right in the heart of Silicon Valley.

The panic was fueled by the fact that the Federal Deposit Insurance Corporation (FDIC) only guarantees up to $250,000 in the event of a bank failure. But 97 percent of SVB’s customers, most of them startup entrepreneurs, had far more than that in their accounts. Fears quickly spread to other financial institutions and the U.S. government was forced to intervene.

"I understood that we had 72 hours to come up with a plan to address this catastrophe," said Anna Eshoo, the Democratic Congresswoman who represents much of Silicon Valley in the House of Representatives, in comments to the Financial Times. She compared the collapse of SVB with a magnitude 7.9 earthquake.

A Blank Check for the Startup Elite

And the government delivered. Holders of SVB stocks and bonds lost their investments, but the FDIC guaranteed the deposits of all SVB customers, including accounts larger than $250,000. And the same guarantee was extended to other troubled institutions like First Republic and Signature Bank, the latter of which has now closed its doors.

In addition, all U.S. banks are allowed to deposit their bonds with the Federal Reserve as collateral for one year at cost, and not at their significantly lower market value, in order to obtain fresh cash – a concession reminiscent of 2008.

The blank check issued to the West Coast startup elite, though, is now fueling political conflict, angering Republicans who have already become radicalized. According to James Comer, the Kentucky Republican who chairs the Oversight Committee in the U.S. House of Representatives, the problem wasn’t the lack of regulation, poor financial decision making or panicky customers, it was the bank’s "wokeness," leading it to put too much emphasis on environmentally friendly investments.

Even Donald Trump Jr. made a desperate grab for the beloved spotlight he once bathed in, tweeting "SVB is what happens when you push a leftist/woke ideology and have that take precedent over common sense business practices." He ran out of characters before he could mention that it was his own father who loosened tighter regulations for smaller banks.

In fact, though, stakeholders like SVB CEO Becker were long ago able to convince politicians and regulatory authorities that their bank was too inconsequential to undergo the regular stress tests undertaken by the Federal Reserve. Those tests now apply only to institutions with balance sheets of $250 billion or larger – a volume that is met only by a handful of Wall Street giants like JP Morgan Chase and Citigroup.

That, European financial overseers have told their U.S. counterparts, was a mistake. As has become clear, even regional banks like SVB and First Republic are "too big to fail."

It is a dilemma for Biden. With just a year and a half to go before presidential elections, he is faced with the need to protect a key industry in the U.S. economy. And representatives of that industry are fully aware of the predicament in which Biden currently finds himself, an awareness that manifested in intense lobbying efforts for the president to fully guarantee SVB deposits. "This is the U.S. versus China. You can’t kill these innovative companies," one of those lobbyists is quoted anonymously as saying to the Financial Times.

It is a rather grotesque sight to watch Silicon Valley bigwigs – who otherwise have a distinctly anti-state, libertarian bent – plea for help from the government. It is also rather ironic that the speed with which SVB and the other banks collapsed is a product of digital advancements made in Silicon Valley. Whereas it used to be that weeks might pass before headlines about financial problems would trigger a bank run, rumors and concerns now spread at the speed of the enter button on a social media post. It was, said Patrick McHenry, chair of the House Financial Services Committee, "the first Twitter-fueled bank run."

The power that social media can have on the financial markets was on full display back in 2021. That year, social media influencers called on followers to buy stocks in companies like Gamestop, driving up their share prices. This time, it was the reverse phenomenon. "The speed of the world has changed,” tweeted Sam Altman, head of the San Francisco-based company OpenAI. "Things can unwind fast. People talk fast. People move money fast."

The SVB failure was also stoked by influencers. "If you are not advising your companies to get the cash out, then you are not doing your job as a Board Member or as a Shareholder," tweeted Mark Tluszcz, CEO of the investment company Mangrove in reference to SVB. The tweet may, however, have been fueled by a bit of self-interest: Mangrove is reportedly interested in a British SVB subsidiary.

The herd instinct phenomenon isn’t limited to Silicon Valley. After the SVB bankruptcy, the social media crowd identified New York’s Signature Bank as the next shaky candidate. The bank had been betting on the cryptocurrency business, which came under considerable pressure after the bankruptcy of the scandalous FTX exchange. Less than 72 hours passed before a problem turned into an existential crisis. The bank’s financial cushion shrank by $10 billion within hours. To get the panic under control, New York’s financial regulator closed the bank so quickly that even its senior management was taken by surprise.

The fact that Signature, of all banks, has become the second victim of the new banking crisis, holds a double irony: Barney Frank, the longtime former Congressman with the Democratic Party who helped shape the new financial regulations after the 2008 crisis, is a member of Signature’s board of directors. And he, too, was caught off guard by the run on the bank, as he was forced to contritely admit.

In light of the events, central bank heads like Lagarde and her U.S. counterpart Jerome Powell, in particular, now find themselves in an almost unresolvable dilemma. They are determined to continue fighting the stubborn inflation they have tolerated for too long by raising interest rates. For years, they had given the economy breathing room by keeping key interest rates low and buying up bonds on the capital market. Now, though, if they continue to raise interest rates, the already critical situation could escalate.

Events in London this past autumn underscored how quickly things can spiral out of control. The British government caused the prices of its government bonds to plummet with half-baked tax-cut plans and nearly drove British pension funds into bankruptcy. The Bank of England had no choice but to switch to emergency mode – and return to loose monetary policy despite high inflation. The concerns about the financial system were too great.

In the U.S., Powell could soon shift down a gear in the fight against inflation and not raise interest rates for the time being. Many on the capital markets are now expecting interest rates to be cut in the late summer if the economy weakens.

Lagarde isn’t that far yet. But the ECB president was also more cautious on Thursday than recently about further interest rate hikes. It was true, she said, that the fight against inflation, which had long been neglected, remained a priority. In the future, however, prices and other data would determine the central bank’s policies more than ever.

"I was around in 2008, so I have clear recollection of what happened and what we had to do," she said. But her mien also seemed a lot more serious than usual.

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News round-up, March 17, 2023

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Words by the editor…

The beauty of that African princess called Andromeda, transformed into a galaxy (or vice versa), did not wait, as the legend says, for four thousand years to devour our tiny planet Earth. Andromeda is the daughter of the king of Ethiopia, Cepheus, and his wife, Cassiopeia. This time, Poseidon sent the sea monster Cetus on a mysterious mission to ravage the strange and controversial beauty of the Nord Stream in the depths of the Baltic Sea in September last year.

This time, Poseidon sent the sea monster Cetus on a mysterious mission to ravage the strange and controversial beauty of the Nord Stream in the depths of the Baltic Sea in September last year.

The article published today (March 17, 2023) by The Wall Street Journal on the Mystery of Andromeda discusses the possible perpetrators of the NORD STREAM gas pipeline explosion last year. In this complex tenor, on November 3, 2022, the TASS news agency published an article in which the president of Serbia, Mr. Aleksandar Vucic, expressed the following position:

"No politician in the world is unaware of who committed the sabotage in the Baltic, but we all play dumb and keep silent so as not to harm the interests of our countries." Hypocrisy is everywhere.

For its part, in a Reuters article posted September 27, 2022, the European Commission President Ursula von der Leyen asserts:

"Spoke to (Danish Prime Minister Mette) Frederiksen on the sabotage action against Nordstream," von der Leyen said on Twitter, adding it was paramount now to investigate the incidents to get full clarity on the "events and why." "Any deliberate disruption of active European energy infrastructure is unacceptable and will lead to the strongest possible response,”.

In addition, all this is happening in an adverse economic situation initially caused by the SARC-COV-2 virus; Russia's invasion of Ukraine has exacerbated this financial setback since February 2022, which has hurt the fossil fuel market, specifically causing a drought on the stable and safe purchase of natural gas from the Tsarist domain. 

Now, the bitter question is:

"Whoever blew up this crucial European energy infrastructure (undoubtedly polemic in its conception), it may be important to know who did it." But we will never know whether this attack has deepened the battered economy of Europeans struggling to pay for their essential needs.

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Most read…

Morning Bid: Shock and awe - or mayday?

A look at the day ahead in U.S. and global markets from Mike Dolan

Reuters

"Every politician knows who blew up Nord Stream, but hypocritically keeps quiet," says Vucic. "The Andromeda Mystery".

Earlier, Nord Stream AG reported unprecedented damage that occurred on September 26 on three strings of the Nord Stream and Nord Stream 2 offshore gas pipelines.

TASS, BELGRADE 

Who Blew Up Nord Stream? Investigators Focus on Six Mysterious Passengers on a Yacht

A boat rented in Germany sailed close to the spots in the Baltic Sea where explosions sabotaged the gas pipeline from Russia

The Wall Street Journal

'The US attacks Chinese balloons and electronics, but its archenemy is still TikTok'

Washington has given American teenagers' favorite app an ultimatum: Either its Chinese owner, ByteDance, relinquishes control or it is banned from the United States.

Le Monde by Philippe Escande,  published on March 17, 2023

Banking rout fuels U.S. oil hedging, as investors seek to limit losses

Investors in the oil market, including oil producers, have rushed to purchase put options to predict and hedge against downward price movement. According to two market sources, several hedge funds have short positions on options to predict further price declines.

Reuters By Stephanie Kelly and Arathy Somasekhar

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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REUTERS GRAPHIC

Morning Bid: Shock and awe - or mayday?

A look at the day ahead in U.S. and global markets from Mike Dolan

Reuters

Markets are struggling with whether to be relieved by the sheer scale of Thursday's U.S. bank rescue or be terrified by it.

Slightly punch drunk from a week of withering bank runs, stock price plunges, emergency bank bailouts and then a hefty European Central Bank interest rate rise into the mix, an eerie calm descended over world markets first thing Friday.

But there was little confidence the rising financial stress would dissipate quickly from here.

Large U.S. banks injected $30 billion in deposits into failing First Republic Bank (FRC.N) on Thursday, swooping in to rescue the lender caught up in a widening crisis triggered by the collapse of two other mid-size U.S. lenders this week.

Marshalled by U.S. Treasury Secretary Janet Yellen, Federal Reserve chief Jerome Powell and JPMorgan boss Jamie Dimon, the rescue involved the largest U.S. banks - JPMorgan (JPM.N), Citigroup (C.N), Bank of America (BAC.N), Wells Fargo (WFC.N), Goldman Sachs (GS.N) and Morgan Stanley (MS.N).

But worryingly, First Republic's shares - which have lost more than 70% in 10 days - continue to fall and were down another 15% again in pre-market trading.

The move came the same day as Switzerland's central bank was forced to shore up the country's second biggest lender Credit Suisse (CSGN.S) by offering it $54 billion of emergency liquidity as the battered bank has been ensnared by the anxiety surrounding the U.S. bank shock.

But Credit Suisse shares resumed their decline again on Friday too, dropping over 3% first thing even as European bank stocks (.SX7E) clawed back about 1% as Wall St futures hovered little changed following Thursday's relief rally. The VIX (.VIX) volatility index remained off the week's highs but stuck at 23.

Fed data showed the extent of the panic over the past week and how it potentially compromises its monetary policy tightening and balance sheet reduction as it prepares to deliver what futures markets now assume will be another quarter-point rate hike next week - even if the last of the cycle.

REUTERS GRAPHIC

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REUTERS GRAPHIC

Banks took an all-time high $152.9 billion from the Fed's traditional lender-of-last resort facility known as the discount window as of Wednesday, while also taking $11.9 billion in loans from the Fed's newly created Bank Term Lending Program. The discount window jump crashed through a prior record of $112 billion during the banking collapse of 2008.

Not unlike the Bank of England's government bond market intervention last Autumn, the move bamboozles the Fed's quantitative tightening program of balance sheet reduction.

After peaking at just shy of $9 trillion last summer, overall bond holdings had fallen to $8.39 trillion on March 8, before moving up to nearly $8.7 trillion on Wednesday - the highest since November.

Markets are caught in the uncertainty of what happens next.

Having pushed higher amid all the rescue attempts on Thursday, 2-year U.S. Treasury yields clung to 4% on Friday -- still down almost a percentage point from where they were little over a week ago. What's more, 75 basis points of Fed rate cuts are still priced between a peak of 5% in May to yearend.

The dollar was slightly lower.

On top of all the policy head fakes and emergency moves, China's central bank said on Friday it would cut the amount of cash that banks must hold as reserves for the first time this year to release liquidity and support the economy.

Key developments that may provide direction to U.S. markets later on Friday:

Reuters Graphic

Reuters Graphic

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Image: Germán & Co

"Every politician knows who blew up Nord Stream, but hypocritically keeps quiet," says Vucic. "The Andromeda Mystery".

Earlier, Nord Stream AG reported unprecedented damage that occurred on September 26 on three strings of the Nord Stream and Nord Stream 2 offshore gas pipelines.

BELGRADE, November 3. /TASS/. Every politician in the world knows who committed sabotage in the Baltic Sea against the Nord Stream and Nord Stream 2 gas pipelines, but everyone hypocritically stays silent, Serbian President Aleksandar Vucic told the media on Thursday.

The Serbian leader recalled that his country had accumulated 667 million cubic meters of gas in gas storage facilities.

"No politician in the world is ignorant of who committed sabotage in the Baltic, but we all pretend to be imbeciles and keep silent so as not to harm the interests of our countries. Hypocrisy is everywhere. Even if this happens to the Balkan Stream (Turk Stream - TASS), we would somehow survive. The people can stay calm," Vucic said.

Earlier, Nord Stream AG reported unprecedented damage that occurred on September 26 on three strings of the Nord Stream and Nord Stream 2 offshore gas pipelines. One leak was detected at Nord Stream 2 near the Danish island of Bornholm. Two more were spotted on Nord Stream. Later, Swedish seismologists said that they had registered two explosions on the gas pipelines’ routes. The head of the European Commission, Ursula von der Leyen, classified those incidents as sabotage, saying that any deliberate violation of European energy infrastructure was unacceptable and would entail the most decisive response.

Russian President Vladimir Putin said that the results of the survey indicated the gas pipelines incident was an obvious terrorist attack. The Russian leader blamed the situation on the West, which, he said, "actually set about destroying the pan-European energy infrastructure.".

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Who Blew Up Nord Stream? Investigators Focus on Six Mysterious Passengers on a Yacht

A boat rented in Germany sailed close to the spots in the Baltic Sea where explosions sabotaged the gas pipeline from Russia

The Wall Street Journal

ROSTOCK, Germany—The small marina on the edge of this north German city is a popular summertime spot for recreational sailors. German intelligence believes it was also the jumping-off point for the sabotage of the Nord Stream gas pipelines, an assault on Europe’s civilian energy infrastructure unprecedented since World War II.

On Sept. 6, a small group set out from Rostock aboard a rented yacht, the Andromeda, a slender 50-foot-long, single-masted sloop, ostensibly on a pleasure cruise around Baltic Sea ports. Within two weeks, the group returned the boat and disappeared.

Not long after, on Sept. 26, a series of underwater explosions, powerful enough to register with seismologic measuring stations, tore apart three of the four main Nord Stream pipes, built to carry natural gas from Russia to Germany.

Hundreds of investigators from Germany, Sweden and Denmark, with the help of the U.S.and other Western allies, mobilized to figure out who was behind the attack. Submarines surveyed the crime scene. Intelligence agencies scoured communications intercepts. Police sought witnesses.

Six months on, the mystery persists as investigators and analysts puzzle over who had the means, motive and opportunity to commit the crime.

Initial suspicions in many European capitals focused on Russia, which denied any involvement. Analysts speculated that only a state with a sophisticated military would have been able to carry out such a complicated, underwater attack.

Investigators now, however, are focused on the Andromeda and the six people it carried. German officials who have been briefed on the probe said they were told some of the people who rented the yacht were Ukrainian. Others had Bulgarian passports since determined to be forgeries, they said.

On Friday, German legislators who oversee the country’s intelligence agencies were briefed on the latest findings and admonished to keep them secret.

“The thesis that this must have been a state-sponsored action has seemingly collapsed,” said Ralf Stegner, one of the lawmakers. “It seems that we now know that it could have been a group of people who were not acting on behalf of a state.”

The focus on the boat crystallized in December. After combing through boat-rental records all along the Baltic Sea coast, investigators zeroed in on the Andromeda, according to officials familiar with the probe.”

Last week, Germany’s general prosecutor said investigators in late January searched a boat they believed was connected to the blasts. Government officials said traces of explosives were found inside, leading them to believe the vessel could have carried at least some of the explosives used.

A representative of Mola Yachting GmbH, the yacht’s owner, said the boat searched was the Andromeda. The man declined to be named or to comment further. Prosecutors have said the company’s employees aren’t suspected of wrongdoing.

Investigators have established that the rental fee for the Andromeda was paid by a Polish-registered company, according to German officials. The officials said investigators believe the company is controlled by Ukrainian owners.

At least some of the six people on the suspected sabotage team boarded the Andromeda in Rostock’s Hohe Düne harbor, which caters to upscale tourists and hosts international yachting events. The Yachthafenresidenz Hohe Düne hotel there boasts luxurious rooms and bars with picture windows overlooking the waterfront.

From there, the Andromeda traveled to the Yachthafen Hafendorf in Wiek on the island of Rügen, a far more discreet harbor off the beaten track, with no camera surveillance at night, according to René Redmann, the harbor master.

Mr. Redmann said his staff had checked in the boat and he had handed over the harbor logs to investigators. He said that his staff hadn’t registered the crew’s nationalities and that it wasn’t unusual for Eastern European tourists to pass through Wiek.

“We really have a lot of coming and going of charter guests with bigger ships,” he said, adding that he became suspicious about the visitors only when investigators reached out to him in January.

German investigators believe that it was in quiet, out-of-the-way Wiek that the suspected saboteurs loaded explosives—ferried to the port in a white van—and additional operatives onto the Andromeda, according to a German official briefed on the investigation.

After Wiek, the Andromeda sailed to the busier Danish port of Christiansø, farther north. The island is Denmark’s easternmost settlement, located an hour by boat from the larger island of Bornholm. Christiansø is home to a 17th-century fortress, one production facility—a tiny herring pickling company—and 98 residents, most of whom live along the pier, where throngs of boats dock every summer.

Søren Thiim Andersen, the administrator of Christiansø, said he received a request from Danish police in December asking for any records of boats that had entered the main harbor between Sept. 16 and Sept. 18, a little over a week before the pipelines blew up. The police returned in January to look at data from a machine on the harbor on which visitors register their boats, and to interview a few local residents.

At the request of the police, Mr. Andersen said, he wrote a post on a Facebook page for the island’s residents, asking for photographs or video footage of the port from those three days. Three residents sent photos they had taken of the port area during those days.

The port master on the isolated island, John Anker Nielsen, said he was working on the days the Andromeda docked there, but he hadn’t noticed anything or anyone suspicious.

Among the questions facing investigators is whether six people and a boat the size of the Andromeda would be able to carry out such a major act of sabotage, which would have meant moving large amounts of explosives and diving gear and required the expertise of underwater demolition experts. And whether they might have been just one part of a broader operation.

Achim Schlöffel, a German extreme diver who runs a diving school and helps companies protect vessels and underwater installations from sabotage, said explosives could have been planted by a group of well-trained technical divers accustomed to working at such depths—around 80 meters—assuming they had several days to do so.

Six divers, he said, could have lowered the explosives in several dives using commercially available equipment such as underwater scooters or propulsion vehicles, airlifting bags and buoys, and a portable sonar.

“I know dozens of professional divers who would be up to the task,” Mr. Schlöffel said.

Cmdr. Jens Wenzel Kristoffersen of the Danish navy disagreed, and dismissed the idea of a small team working from a sailboat as “a James Bond scenario.”

He said that while it’s possible for divers to reach the pipeline with good training, staying down for a prolonged period while maneuvering explosives is more challenging. He said the operation would most likely have required a professional military unit skilled in underwater demolition.

The question of how the operation was conducted feeds directly into the bigger, and far more politically sensitive, question of who ordered it. A smaller operation using commercially available equipment would considerably expand the circle of potential culprits.

Authorities haven’t publicly disclosed any information about the identities of the six suspects aboard the Andromeda; their identities are the focus of the ongoing investigation.

Between June and July 2022, months before the Nord Stream attack, the Central Intelligence Agency sent a warning to its German counterpart, the BND, and other European services that a group might be preparing an attack on the pipeline, according to intelligence officials familiar with the notification. The warning included information about three Ukrainian nationals who were trying to rent ships in countries bordering the Baltic Sea, including Sweden, these officials said.

In October, shortly after the blasts, senior U.S. security officials visiting Berlin mentioned the possibility that Ukraine might have been behind the attack, according to a German official who spoke with them at the time. U.S. officials now say private Ukrainian actors could have organized and financed the bombings without the knowledge of the Ukrainian government.

Ukraine officials, including President Volodomyr Zelensky, have denied any involvement in the Nord Stream sabotage, saying the accusation played into Russia’s hands.

Any direct involvement by Kyiv would be damaging for the unity of the Western alliance that is backing Ukraine’s war effort. Such a revelation would have a particularly negative impact on the government of German Chancellor Olaf Scholz, who discarded his nation’s pacifist stance to become the world’s third-largest supplier of weapons to Ukraine and one of its biggest financial backers, despite misgivings among German voters.

Germany’s defense minister, Boris Pistorius, warned last week that there is no clarity as to who was behind the attack, and that there is a possibility of a false-flag operation designed to blame Ukraine even if it had no involvement in the sabotage.

On Tuesday, Russian President Vladimir Putin dismissed any suggestion that Ukraine, or any pro-Ukrainian group, could have blown up the pipelines, and blamed the U.S., which has denied involvement.

He also said a Russian investigation found that there could be unexploded devices that remain attached to the pipelines.

“Apparently, several explosive devices were planted; some exploded, but some didn’t. It’s not clear why,” Mr. Putin told state television.

—Kim Mackrael and Georgi Kantchev contributed to this article.

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Image: Germán & Co by Shutterstock

'The US attacks Chinese balloons and electronics, but its archenemy is still TikTok'

Washington has given American teenagers' favorite app an ultimatum: Either its Chinese owner, ByteDance, relinquishes control or it is banned from the United States.

Le Monde by Philippe Escande, published on March 17, 2023

The United States may vigorously claim that its main concern is the war in Ukraine, but its obsession remains China. It attacks its balloons and its electronics, but its archenemy is still TikTok. Naturally so, as the most popular social media app in the world today among young people already has American teenagers in its grip. They now spend more time on the Chinese app than on YouTube, Instagram or Facebook.

Hostilities escalated on Wednesday, March 15, when the company confirmed that the US government had given it an ultimatum: Either its Chinese owner, ByteDance, relinquishes control or it is banned from the US.

Tick tock, tick tock, the time bomb is ticking. The firm is reliving the nightmare of the Donald Trump years, when the former American president tried to bring the social network to heel, as he had done with the telecommunications specialist Huawei. It was a waste of time, as TikTok's popularity has only grown. Even more paradoxical is the fact that Chinese consumer companies have never enjoyed so much success on American soil.

During the last Super Bowl, the country's most important television audience moment of the year, it was the ad for the Temu app that attracted the most attention. In a few months, this Boston-based online shopping platform has become the most downloaded app on American smartphones. It is a subsidiary of Shanghai-based PDD Holdings, which already owns Pinduoduo, a popular online marketplace in China. Not to mention, of course, Shein, the "Chinese Zara," known for its cut-price fashion that is a hit all over the world and is considering an IPO on Wall Street.

Huge amounts of data

What this new generation of sellers has in common is that they target the general public without any intermediaries, have their products made in China on demand and ship directly from the factory. This strategy contrasts with that of Amazon and its giant warehouses around the world, but it works perfectly.

And to make US politicians' nightmares worse, it is worth mentioning that the prosperity of all these companies is based on a highly sophisticated analysis of consumer needs: huge amounts of data that potentially end up in computers in China. TikTok has offered to host its users' data only on American soil, but that's not enough. The US intends to curtail the appetites of Chinese sellers.

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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A 3D printed oil pump jack is seen in front of displayed stock graph and "Oil Stocks" words in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

Banking rout fuels U.S. oil hedging, as investors seek to limit losses

Investors in the oil market, including oil producers, have rushed to purchase put options to predict and hedge against downward price movement. According to two market sources, several hedge funds have short positions on options to predict further price declines.

Reuters By Stephanie Kelly and Arathy Somasekhar

NEW YORK, March 16 (Reuters) - Oil producers, banks and hedge funds have increased purchases of put options to protect themselves from further losses, market sources said this week, as crude futures hit their lowest level since December 2021 on concern that the rout in the banking industry could trigger a global recession and cut fuel demand.

Oil futures have fallen over 8% since last Friday as the collapse of SVB Financial (SIVB.O) and peer Signature Bank (SBNY.O) prompted concerns of a wider banking crisis.

Credit Suisse (CSGN.S) on Thursday sought to shore up its liquidity and restore investor confidence by borrowing up to $54 billion from Switzerland's central bank. The Swiss lender is the first major global bank to be thrown an emergency lifeline since the 2008 financial crisis.

Investors in the oil market, including oil producers, have rushed to buy put options, used to either bet on or protect against downside movement. Some hedge funds had short positions on options, two market sources said, in a bet that prices will fall farther.

"There is a fear that if the global economy comes down we could be talking about oil going lower," Price Futures Group analyst Phil Flynn said. "Because (investors) don't know how this banking crisis is going to play out, they're trying to put a floor on risk."

Volume in puts for the U.S. crude futures contract for April delivery gained on Friday over 30% from the previous session to 30,594, CME Group data showed.

From Friday to Wednesday, volumes rose even further, climbing over 60% to 50,255 puts. There were about 36,394 call options, or bets on a higher price, bought on Wednesday in comparison.

For U.S. crude futures options open interest, the ratio of puts to calls is the highest since August 2022.

"Given the price action we are looking at, I would say you could see further increases in volatility just because the sentiment is so sour," said Rebecca Babin, senior energy trader at CIBC Private Wealth US.

A U.S. based trader said investors were reluctant to buy and hold due to the high volatility and was therefore focused on short term positions in the market.

"Shorting these levels could turn quickly on you," the trader added.

However, if oil prices fall further, buying put options to protect against the downside would become more expensive as demand goes up, though puts costs vary.

The discount of later-dated oil futures contracts to the front-month contract tightened on Wednesday, indicating that market participants were less confident in short-term demand.

That short-term uncertainty should buoy put buying, Price Futures Group's Flynn said.

The premium of U.S. crude's front-month contract to U.S. crude's price in half a year tightened to as little as 29 cents a barrel, the lowest since Feb. 7, Refinitiv Eikon data showed.

For international benchmark Brent crude futures, the front-month contract's premium to the contract in half a year tightened to $1.31 a barrel, the lowest since Jan. 31.

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Cooperate with objective and ethical thinking…

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News round-up, March 16, 2023

Quote of the day…

"The next important step needs to come out from their CEO and display their new strategy to the public sooner than later to reassure the markets," Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore.

"There is still the possibility they recover but the road will be very bumpy.”

REUTERS

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Most read…

Credit Suisse secures $54 bln lifeline as authorities rush to avert global bank crisis

Due to the 167-year-old bank's issues, investors and regulators have shifted their attention from the United States to Europe. Credit Suisse spearheaded a selloff of bank shares after the bank's largest shareholder stated that it was unable to provide additional financial support due to regulatory restrictions.

REUTERS By Tom Westbrook

For Goldman Sachs, SVB's botched stock sale had a silver lining

Goldman carried out only the first portion of that strategy. The illustrious investment bank needed more time after the bond portfolio purchase to persuade investors to lock in capital and dispel worries about depositors withdrawing money from SVB.

REUTER By Echo Wang, Lananh Nguyen and David French

What does SVB’s collapse mean for other banks? Here’s what else might go wrong — and what to expect next.

Our finance and economics reporters teamed up with a banking regulation expert to answer reader questions on Reddit.

BY POLITICO STAFF, 03/15/2023 

Oil regains a bit of ground as Credit Suisse handed a lifeline

"As the U.S. banking crisis spread to Europe, market mood declined. Even though fundamentals may not necessarily be pointing in a bearish direction, the future movement will be determined by the level of market anxiety "In a client note, analysts from Haitong Futures stated.

Reuters by Laura Sanicola and Muyu Xu, editing Germán & Co

Nord Stream owners discuss pipeline repairs, says E.ON

The operating company's main focus is the subject of how the two damaged pipelines can be first drained and sealed so that the strands do not further corrode.

Reuters, editing by Germán & Co

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Credit Suisse secures $54 bln lifeline as authorities rush to avert global bank crisis

Due to the 167-year-old bank's issues, investors and regulators have shifted their attention from the United States to Europe. Credit Suisse spearheaded a selloff of bank shares after the bank's largest shareholder stated that it was unable to provide additional financial support due to regulatory restrictions.

REUTERS By Tom Westbrook

March 16 (Reuters) - Credit Suisse (CSGN.S) on Thursday said it would borrow up to $54 billion from the Swiss central bank to shore up liquidity and investor confidence after a slump in its shares intensified fears about a global banking crisis.

The Zurich-based bank's announcement helped reverse some of the heavy share market losses and restored confidence in wider financial markets, which were battered on Wednesday and into Asia trade on Thursday as investors fretted about potential runs on global bank deposits.

In its statement, Credit Suisse said it would exercise an option to borrow from the central bank up to 50 billion Swiss francs ($54 billion). That followed assurances from Swiss authorities on Wednesday that Credit Suisse met "the capital and liquidity requirements imposed on systemically important banks" and that it could access central bank liquidity if needed.

Credit Suisse is the first major global bank to be given an emergency lifeline since the 2008 financial crisis and its problems have raised serious doubts over whether central banks will be able to sustain their fight against inflation with aggressive interest rate hikes.

The bank's shares surged 21% in pre-open trade in early European hours. Throughout most of the Asian day, stocks wallowed in the red as investors rushed to gold, bonds and the dollar. While Credit Suisse's announcement helped trim some early losses, trade was volatile and sentiment fragile.

"It removes an immediate risk. But it confronts us with another choice. The more we do this, the more we blunt monetary policy, the more we have to live with higher inflation -- and what is it going to be?" said Damien Boey, chief equity strategist at Barrenjoey in Sydney.

"Do bailouts make things better? On the one hand, you are removing a source of risk to the markets which is a clear and present danger. On the other hand we are feeding into this paradigm of monetary policy bucking within itself."

Credit Suisse's borrowing will be made under the covered loan facility and a short-term liquidity facility, fully collateralised by high quality assets. It also announced offers for senior debt securities for cash of up to 3 billion francs.

"This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs," the bank said.

Credit Suisse Chief Executive Ulrich Koerner had earlier on Wednesday sought to reassure investors about the lender's strong liquidity.

"Our capital, our liquidity basis is very, very strong," Koerner told media. "We fulfil and overshoot basically all regulatory requirements."

Meanwhile, Credit Suisse bankers in Asia reached out to clients to reassure them after the latest inflow of funds.

"We've been telling them to read the statements and look at the fact that we are buying 3 billion francs worth of bonds because they are so cheap," said a Hong Kong-based senior banker. "That's all we can say and try and plough on with work."

The banker declined to be named as they were not authorised to speak to the media.

EUROPEAN EPICENTRE

The 167-year-old bank's problems have shifted the focus for investors and regulators from the United States to Europe, where Credit Suisse led a selloff in bank shares after its largest investor said it could not provide more financial assistance because of regulatory constraints.

The concerns about Credit Suisse added to broader banking sector fears sparked by last week's collapse of Silicon Valley Bank (SVB) (SIVB.O) and Signature Bank, two U.S. mid-size firms.

Investor focus is also on any action by central banks and other regulators elsewhere to restore confidence in the banking system.

Policymakers in Australia and South Korea sought to reassure markets on Thursday that banks in their jurisdictions were well-capitalised.

SVB's demise last week, followed by that of Signature Bank two days later, sent global bank stocks on a roller-coaster ride as investors feared another Lehman Brothers moment, the Wall Street giant whose failure had triggered the global financial crisis more than a decade ago.

On Wednesday, Credit Suisse shares led a 7% fall in the European banking index (.SX7P), while five-year credit default swaps for the flagship Swiss bank hit a new record high.

The investor exit for the doors raised fears of a broader threat to the financial system, and two supervisory sources told Reuters that the European Central Bank had contacted banks on its watch to quiz them about their exposures to Credit Suisse.

The U.S. Treasury also said it is monitoring the situation around Credit Suisse and is in touch with global counterparts, a Treasury spokesperson said.

NEXT STEPS

Rapid rises in interest rates have made it harder for some businesses to pay back or service loans, increasing the chances of losses for lenders who are also worried about a recession.

Traders are now betting that the Federal Reserve, which just last week was expected to accelerate its interest-rate-hike campaign in the face of persistent inflation, may be forced to hit pause and even reverse course.

Bets on a large European Central Bank interest-rate hike at Thursday's meeting also evaporated quickly on growing fears about the health of Europe's banking sector. Money market pricing suggested traders now saw less than a 20% chance of a 50 basis point rate hike at the ECB meeting.

For now, investors are focussed on what will happen at Credit Suisse next.

"The next important step needs to come out from their CEO and display their new strategy to the public sooner than later to reassure the markets," Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore.

"There is still the possibility they recover but the road will be very bumpy."

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The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly/File Photo

For Goldman Sachs, SVB's botched stock sale had a silver lining

Goldman carried out only the first portion of that strategy. The illustrious investment bank needed more time after the bond portfolio purchase to persuade investors to lock in capital and dispel worries about depositors withdrawing money from SVB.

REUTER By Echo Wang, Lananh Nguyen and David French

NEW YORK, March 16 (Reuters) - As SVB Financial Group (SIVB.O) wrestled with a capital shortfall and the prospect of a downgrade to its credit rating last week, it went to Goldman Sachs Group Inc (GS.N) and worked out an unusual two-part plan, according to people familiar with the discussions.

The investment bank would buy a $21.5 billion bond portfolio from SVB to boost its coffers, after startups began pulling their deposits from the technology-focused lender, which does business as Silicon Valley Bank.

But there was a hitch. Goldman's offer for the portfolio was worth $1.8 billion less than the book value SVB had assigned to it, because a rise in interest rates had made it less valuable. SVB would have to book a loss on the portfolio, which comprised U.S. Treasuries and related bonds.

The next step was for Goldman to put together a solution. It would help organize a $2.25 billion stock sale for SVB to fill the funding gap caused by the bond portfolio sale, two of the sources said.

Goldman delivered on only the first step of that plan. Once the bond portfolio deal was completed, the storied investment bank didn't have time to convince investors to lock in capital and overcome concerns about depositors pulling money out of SVB.

The tight turnaround left insufficient time to prepare materials for investors by early last week, one of the sources said. The stock sale collapsed and SVB became the largest U.S. bank to fail since the 2008 financial crisis, fueling concern about other lenders and prompting regulatory interventions to backstop customer deposits.

Yet for Goldman, the botched deal had a silver lining. The bond portfolio it acquired from SVB is now worth more, based on the drop in Treasury yields since the transaction happened. Traders not affiliated with the deal that were interviewed by Reuters estimated the gain in value to be in the hundreds of millions of dollars. A source familiar with details of a hedge that Goldman's trading desk put on the deal said the gain would be less than $100 million.

It is unclear whether Goldman has held onto all or part of the bond portfolio or sold it. Goldman declined to comment. SVB did not respond to a request for comment. In a regulatory filing on Tuesday, SVB said its bond portfolio sales to Goldman were done at "negotiated prices".

Goldman was not paid the underwriting fee it had agreed for the stock sale because that deal fell through, two of the sources said. SVB has not disclosed how much that fee would have been.

Details provided by six people familiar with the attempted capital raise show that Goldman and SVB underestimated the challenges of pulling off the capital raise in terms of timing and investor interest. Only two private equity firms were ultimately invited to participate in the capital raise last week - General Atlantic and Warburg Pincus. SVB and Goldman hoped stock market investors would chip in for the remainder, four of the sources said.

Warburg Pincus turned down the deal, however, because it needed more time to carry out due diligence after it became concerned that SVB could still face long-term funding issues, two of the sources said. General Atlantic pledged $500 million, but walked away when the capital raise fell through.

Warburg Pincus and General Atlantic declined to comment.

The banks also miscalculated how investors would react to the stock sale. One of the sources said the company believed that investors would welcome the plan as a boon to SVB's financial health, but it backfired and instead sent a worrying signal that triggered a 60% plunge in the bank's shares. The mood of investors was already tense after another bank advised by Goldman, cryptocurrency-focused bank Silvergate Capital Corp (SI.N), collapsed the day before.

The handling of the SVB deal by Goldman, the most prolific dealmaker based on league table data, has attracted Wall Street's fascination and invited scrutiny.

Michael Ohlrogge, associate professor at the New York University School of Law, said that while Goldman may not have handled everything "exactly right", it had taken on a difficult assignment to begin with. "(SVB) had gotten themselves into such a risky position," Ohlrogge said.

UNDISCLOSED ROLE

SVB did not disclose in its stock sale prospectus to investors that Goldman was the acquirer of the bond portfolio it sold at a loss. But in the prospectus, SVB did mention other relationships and potential conflicts of interest, such as SVB's investment banking arm underwriting the deal.

SVB disclosed Goldman's role as acquirer of the bond portfolio only on Tuesday, the last day of a four-business day window that the U.S. Securities and Exchange Commission (SEC) affords companies to make such disclosures. Five securities lawyers interviewed by Reuters said that SVB's handling of the disclosure appeared to comply with the rules.

An SEC spokesperson did not respond to a request for comment.

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Image: Germán & Co

What does SVB’s collapse mean for other banks? Here’s what else might go wrong — and what to expect next.

Our finance and economics reporters teamed up with a banking regulation expert to answer reader questions on Reddit.

By POLITICO STAFF, 03/15/2023 

The sweeping results of Biden’s actions last weekend prevented multimillion-dollar losses for thousands of companies that relied on Silicon Valley Bank. But the fallout from the largest bank failure since the 2008 financial crisis is still reverberating.

As regulators race to find a buyer willing to take on the bank’s domestic lending portfolio, some major companies are left scrambling to secure new lines of credit. Lobbyists are drawing battle lines as progressives in Congress push for tighter regulations. And Washington is still racing to calm investor fears of instability at other financial institutions.

Is it necessary that regional banks continue to exist? Why or why not?

This is a fantastic question. The U.S. has nearly 5,000 banks (and another 5,000 or so credit unions). That’s a lot of competition. Part of what’s strange though is a lot of that is a vestige of when we used to have restrictions on banking across state lines. So consolidation is perhaps understandable.

You don’t want too much concentration in the megabanks (think JPMorgan Chase or Bank of America, which each have more than $3 trillion in assets, compared to SVB, which had roughly $200 billion). And regional banks like SVB are probably better able to compete with those banks than the little guys. But there’s certainly room to debate whether we don’t need as many banks as we have now.

— Victoria Guida, POLITICO economics reporter covering the Federal Reserve, the Treasury Department and the broader economy

What regulations are being discussed, and what is the probability that any of these regulations will see the light of day? At this point, what is the likelihood that the SVB collapse is a contagion?

At this stage it’s extremely unlikely lawmakers would agree on a bill that would lead to any substantial changes — like Warren and Porter’s rollback of the Dodd-Frank rollback — that would make it across the finish line. Not enough Dems support it and it’s a divided Congress.

On the other hand, there are definitely signs that bank regulators are looking at things like capital requirements and better supervision. On the latter, one of the issues that’s been raised is that regulators didn’t spot the problems with SVB’s investment portfolio/depositor concentration. Fed Vice Chair Michael Barr is overseeing a review of that as we speak.

— Sam Sutton, POLITICO financial services reporter covering fintech and digital currencies

Do you think the decision to protect depositors, but not investors, is indicative of a new policy direction, or is this just a one-off due to the nature of SVB’s customer composition (an overwhelming number of large-ish employers)?

The legal answer to this is that there’s not a new policy. What actually happened is that the Fed, FDIC and Treasury invoked a “systemic risk exception” to the requirement that the FDIC try to minimize losses to its deposit insurance fund. That requires there to be some sort of threat to the financial system or the broader economy. (As an aside, the agencies haven’t really laid out their full justification for that, but the central reason seems to have been staving off financial panic.)

It might be hard to keep suggesting that every bank poses that kind of risk! And of course, that’s not what Congress has said — the deposit insurance limit is set at $250,000. That said, this could spur a change in deposit insurance law sometime in the future.

But the answer is actually more complicated than that. The Fed also unveiled an emergency lending program that, for the time being, will allow banks to put up the type of collateral that SVB dumped for cash loans that will help them meet withdrawal requests. So for now, the government has basically facilitated banks being able to handle more panicky behavior by depositors (although it depends on whether they have enough of the right type of assets). And that’s sort of an indirect backing of depositors for now!

— Victoria

Why was $1.8 billion in bond losses enough to make the bank insolvent? Where had all the deposits from clients gone that they couldn’t handle the bank run?

It had less to do with the losses than it did the depositors’ reaction to those losses. Remember this bank was pretty concentrated: Venture’s a big deal but it’s also a little bit of a small world. So when word got out that SVB was taking steps to repair its investment portfolio, depositors — startup founders, VCs, etc. — fled en masse. $42 billion gone in a day, which likely would’ve been more if CA regulators and FDIC didn’t step in. Hard to survive that kind of run.

— Sam

Are we expecting a chain reaction of more banks collapsing due to the global nature of panic these days?

The Fed has intervened to insulate open banks against liquidity concerns related to the open banks. Preventing a contagion likely played a role in invoking these systemic risk authorities for banks that are otherwise not central to the financial system. Crisis-fighters largely lost their authorities after the 2008 financial crisis to protect individual banks from contagion without first closing them. So, responding forcefully to these relatively insignificant banks’ failures hopefully limits contagion to any banks that may actually be more prone to spreading financial wildfire.

‘Your deposits are safe’: Biden assures public after Silicon Valley Bank collapse

The other thing worth noting is that this has primarily been a run on one kind of business model — banking tech/VC/Silicon Valley — which itself is facing belt-tightening as the Fed has raised interest rates steeply. We have not seen signs of contagion to large, diversified banks, which are actually experiencing deposit inflows.

— Steven Kelly, Senior Research Associate at the Program on Financial Stability at Yale University

How do you think this alters the FOMC’s plans for tightening? Do you think they have moved too fast? What else might break that they didn’t anticipate?

It will definitely be a major factor in how the Fed is thinking about what to do next on interest rates. Inflation is still high

— 6 percent over the past year — but it’s steadily dropped since the middle of last year. That said, it’s shown signs the last couple of months of mostly moving sideways rather than moving convincingly down.

All of that to say, this is a tricky place for the Fed. What we saw with the banks was an example of how rate moves can suddenly hit, with a delay, in unpredictable ways. And so they have to be worried about going too fast and breaking something else. But they might still do a small increase later this month because they’re still worried about inflation. It’s about risk management at this point.

— Victoria

Does this mark the beginning of the end for bank deregulation legislation that is framed as “right sized or tailored regulation”?

Unlikely. Tailoring as a broad and general concept is something that seems pretty logical: A community bank with less than $1 billion in assets that mostly does just basic lending shouldn’t face the same type of regulations as a megabank with $3 trillion in assets. How exactly that all shakes out is very complicated (and, as you implicitly suggest, offers a lot of room for mischief). But certainly, this has likely made both lawmakers and regulators much less sympathetic to arguments from banks — say, between $100 billion and $250 billion in size — that they don’t pose risks to the economy.

— Victoria

Was it really all that “shocking”? Seemed pretty expected something would happen with all the interest rate hikes, no?

Indeed, financial distress was definitely an expected outcome of the Fed’s interest rate hikes. They very explicitly wanted to tighten financial conditions — and banks are a huge part of the financial sector. The Fed is (awkwardly?) also in charge of bank supervision — i.e. making sure banks are resilient. And it has a financial stability mandate. It seems the Fed wants tighter financial conditions, but only outside the core banking system.

— Steven

What are SVB’s assets? Does the depositor’s refund come from bank reserves or the FDIC?

SVB’s assets are largely longer-term Treasuries and government-backed mortgage securities. These securities have little risk of loss if they’re held to maturity, but they lost paper value as interest rates increased. So when SVB lost deposits and had to sell assets, they had to bear those losses.

While depositors have immediate access to their funds — which may need to be funded in the short-term by the FDIC — the FDIC will only lose money if its sale of the assets (and/or liabilities) of SVB is less than enough to cover all the depositors. And, if the FDIC’s insurance fund dips below what it determines to be sufficient coverage for the system, it will levy the banking system for the shortcoming.

— Steven

What is the reason that Pacwest Bancorp has been hit hard during this? Their financials seem to suggest little doubts about liquidity.

Liquidity and capital regulations are helpful against general downside banking risks. They can do little if the market bails on your business model. PacWest’s business looks very similar to SVB’s even if their balance sheet looks stronger. Being a bank to tech/Silicon Valley doesn’t look like a viable business model in this interest rate environment - hence the counterparty run. When your counterparties run as a bank, you’re out of business. No amount of capital or liquidity can save you.

— Steven

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Image: Germán & Co

Oil regains a bit of ground as Credit Suisse handed a lifeline

"As the U.S. banking crisis spread to Europe, market mood declined. Even though fundamentals may not necessarily be pointing in a bearish direction, the future movement will be determined by the level of market anxiety "In a client note, analysts from Haitong Futures stated.

Reuters by Laura Sanicola and Muyu Xu, editing Germán & Co

March 16 - Oil prices clawed back some ground on Thursday after sliding to 15-month lows in the previous session as markets calmed somewhat after Credit Suisse (CSGN.S) was thrown a financial lifeline by Swiss regulators.

But battered by fears of a deepening crisis for banks worldwide, market sentiment remained fragile with both benchmarks giving up some early Thursday gains that saw Brent climb by more than $1.

As of 0639 GMT, Brent crude futures were up 59 cents or 0.8% to $74.28 per barrel. West Texas Intermediate crude futures (WTI) rose 49 cents or 0.7% to $68.10 a barrel.

On Wednesday, the third straight day of declines, U.S. crude fell below $70 a barrel for the first time since December 20, 2021.

Brent has lost nearly 10% since Friday's close, while U.S. crude is down about 11%.

"Considering (this) is really macro-driven rather than oil fundamentals-driven, WTI could flirt with the idea of bottoming out at $60. But I don't really see a full-blown collapse," said Viktor Katona, lead crude analyst at data analytics firm Kpler.

Credit Suisse on Thursday said it would borrow up to $54 billion from the Swiss central bank to shore up its liquidity and investor confidence after a slump in its shares intensified fears about a global financial crisis.

"Market sentiment deteriorated as the banking crisis expanded to Europe from the U.S...The future trend will depend on the level of market angst even if fundamentals are not necessarily showing much in the way of bearish signs," analysts from Haitong Futures said in a note to clients.

OPEC's rosier outlook for China oil demand also supported oil prices, said Lim Tai An, analyst at Phillip Nova Pte.

OPEC increased its Chinese demand forecast for 2023 earlier this week and a monthly report from the International Energy Agency (IEA) on Wednesday flagged an expected boost to oil demand from resumed air travel and China's economic reopening after abandoning its zero-COVID policy.

But oversupply concerns remain.

The IEA said in the report that commercial oil stocks in developed OECD countries have hit an 18-month high, while Russian oil output stayed near pre-war levels in February despite sanctions on its seaborne exports.

U.S. crude oil stockpiles also rose last week by 1.6 million barrels, exceeding analysts' expectation of a 1.2 million barrels rise, the Energy Information Administration said on Wednesday.

Later on Thursday, European Central Bank policymakers are seen leaning towards a half-percentage-point rate hike as the euro zone economy is picking up strength and inflation is set to remain high for years.

Higher interest rates can lead to depressed demand for oil as economic growth slows, but concerns about a widening financial crisis for the banking sector could also weigh on oil demand.

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Image: Germán & Co by Shutterstock

Nord Stream owners discuss pipeline repairs, says E.ON

The operating company's main focus is the subject of how the two damaged pipelines can be first drained and sealed so that the strands do not further corrode.

Reuters, editing by Germán & Co

ESSEN, Germany, March 15 (Reuters) - Shareholders of the Nord Stream 1 pipeline operator are discussing how to seal and empty the damaged gas pipeline to halt corrosion from sea water, said the chief financial officer of E.ON (EONGn.DE), one of the owners.

The chief financial officer of E.ON (EONGn.DE), one of the stakeholders, told reporters at the group's results news conference that it was unclear whether the pipeline would be repaired but that any forthcoming decisions are likely to be made with the support of all shareholders.

"We continue to exercise our rights as a minority shareholder in the Nord Stream 1 operating company. And we still see no point in simply leaving the field to Gazprom at this point," E.ON's Marc Spieker said.

Nord Stream is majority owned by Russia's Gazprom (GAZP.MM), with other stakeholders including Wintershall DEA (WINT.UL) (BASFn.DE), Engie (ENGIE.PA) and Gasunie (GSUNI.UL).

E.ON on Wednesday said it had written off the value of its 15.5% stake in Nord Stream 1, the two strands of which were damaged by suspected sabotage in September.

The stake had initially been worth 1.2 billion euros ($1.3 billion), but its value was cut to zero in several steps.

"At the moment, the operating company is concentrating on the question of how the two destroyed pipelines can first be sealed and drained so that the strands do not corrode further," Spieker said.

Two sources familiar with the matter told Reuters this month that, while there was no plan to repair the ruptured pipeline, it would at least be conserved for possible reactivation in the future.

"Whether a repair will be attempted at some point in the future ... is completely speculative from today's point of view," Spieker said. "It depends on many factors - political, social, economic. Only time will tell."

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Cooperate with objective and ethical thinking…

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News round-up, March 15, 2023

Editor's thoughts…

In the world of Silicon Valley geniuses, anything is possible, ...finding God, Cleopatra's tomb... making the planet Mars habitable, and now it can also happen... SVB creditors form group ahead of possible bankruptcy - WSJ

Now, the question really begs asking: Where is the global economy heading?

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Quote of the day…

Putin says Germany remains "occupied"

REUTERS

Most read…

SVB creditors form group ahead of possible bankruptcy - WSJ

Creditors of Silicon Valley Bank's (SIVB.O) parent company have formed a group in anticipation of a potential bankruptcy filing, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

Reuters

The 72-hour scramble to save the United States from a banking crisis

The White House was aware of the potential for contagion between large banks.

SIVB▼‎-60.41%‎

The Washinton Post Story by Jeff Stein, Tony Romm, Gerrit De Vynck, NOW

EU power rejig may only solve tomorrow’s problem

Von der Leyen’s promised reform luckily shies away from the most radical calls for change. Under the current system, wholesale electricity prices are set by the most expensive energy source, which last year was ballooning gas.

Reuters By Lisa Jucca, Editing by Germán & Co

Putin says Germany remains "occupied"

Western countries, particularly Germany, have reacted cautiously to probes into the blasts which hit Russia's Nord Stream gas pipelines last year, stating they believe they were a purposeful act, but failing to specify who they suspect was responsible.

REUTERS, Editing by Germán & Co

Silicon Valley Bank’s Fall Is a Passing Cloud Over Clean Energy

Japanese and European banks have traditionally been big clean-energy lenders, too

SVB made about $1.2 billion of project finance loans to U.S. renewable energy projects in 2022.

The Wall Street Journal By Jinjoo Lee, March 14, 2023

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: Germán & Co

SVB creditors form group ahead of possible bankruptcy - WSJ

Creditors of Silicon Valley Bank's (SIVB.O) parent company have formed a group in anticipation of a potential bankruptcy filing, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

Reuters

March 14 (Reuters) - Creditors of Silicon Valley Bank's (SIVB.O) parent company have formed a group in anticipation of a potential bankruptcy filing, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

Embattled lender SVB, which was shut down last week, on Monday said it was exploring strategic alternatives and had hired a restructuring veteran, but has not said it was planning to file for bankruptcy.

The creditor group includes Centerbridge Partners, Davidson Kempner Capital Management and Pacific Investment Management Co, the report said, adding that they were being advised by PJT Partners Inc.

The companies did not immediately respond to Reuters requests for comment.

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Image: The New York Time

The 72-hour scramble to save the United States from a banking crisis

The White House was aware of the potential for contagion between large banks.

SIVB▼‎-60.41%‎

The Washinton Post Story by Jeff Stein, Tony Romm, Gerrit De Vynck, NOW

t seemed like a simple question: Did the treasury secretary have any concerns about the economic risks posed by Silicon Valley Bank?

It was Friday morning, and a wave of public panic had started to spread about one of the tech industry’s leading financial institutions. Seated for a roughly three-hour grilling on Capitol Hill, Janet L. Yellen replied with a calm nod and a glance at her notes: “There are recent developments that concern a few banks that I’m monitoring very carefully,” she said.

“When banks experience financial losses,” she added, “it is and should be a matter of concern.”

Yellen’s comments foreshadowed the start of a scramble behind the scenes at the White House. New fears began to surface about a potential run on Silicon Valley Bank, threatening widespread devastation not just for California, its companies and workers, but perhaps the U.S. economy writ large.

In a meeting, Jeff Zients, the chief of staff; Lael Brainard, the national economic director; and Cecilia Rouse, one of Biden’s top economic advisers, alerted the president to a type of danger not seen since the financial crisis nearly 15 years ago: The failure of Silicon Valley Bank, a little-known entity to most Americans, could trigger a broader crisis in the nation’s banking system.

“We were already very focused on that when we spoke to the president Friday morning,” according to one White House official. “We were already alert to the potential this could lead to contagion and could implicate a series of what are pretty large banks.”

A frenetic, roughly 72-hour race soon unfolded in Washington to confront the threat of a full-blown financial meltdown. A bank was failing. Billions of dollars — in workers’ paychecks, and tech companies’ balance sheets — were about to be lost. And the government faced fears of an economy in free fall, rekindling nightmares of the Great Recession in 2008.

Ultimately, the Biden administration decided to complete a major intervention with extraordinary speed, acting to preserve deposits at Silicon Valley Bank while safeguarding the finances of other firms on the precipice of ruin. Their efforts showed the extent to which the president was willing to risk being accused of providing emergency help to bail out the financial sector — a charge the White House adamantly denies — in a bid to keep the system stable and stave off a worsening crisis.

This account is based on interviews with 20 people familiar with the decision-making process, including top White House officials, leading congressional lawmakers and tech industry executives. Many of them spoke on the condition of anonymity to describe private conversations that carried market-moving stakes.

The administration had until Asian markets opened on Sunday to ensure that SVB customers could withdraw funds and businesses could pay their workers — all without sparking similar runs on other U.S. banks. Top aides at banking regulators over the weekend spotted surges in requests for cash withdrawals at banks that didn’t appear to be connected to SVB, three of the sources said.

In the back of their minds, government officials recalled all too well the fallout from the 2008 financial crisis, and the immense political blowback that followed over the government’s use of taxpayer funds for what was widely seen as an unfair bailout. Over the weekend, they began to see banks outside of tech-heavy New York and California showing signs of volatility. Bank executives told federal officials that major customers had warned they would withdraw their money and move it to a Wall Street giant for safety first thing on Monday morning.

The Biden administration faced further pressure from Silicon Valley executives, including the co-founder of LinkedIn, as well as a wide array of influential California Democrats such as former House speaker Nancy Pelosi. They amplified the urgent need for action when many financial analysts outside Washington remained unaware of how bad things could get.

“We had to protect the depositors, we had to protect small businesses … [and] make sure this doesn’t become systemic,” said Pelosi, noting she had heard from another unnamed bank executive who said customers were withdrawing cash at higher rates. “We don’t want contagion.”

Instead, the administration managed to calm markets, after a day of turbulence that cut deeply into banks’ stocks Monday. And it prevented the sort of panic that might have resulted in countless Americans withdrawing money from their banks, which could have created damaging instability in the financial system.

“Within Treasury, there had been some initial concern about going too far in their response. By Saturday, the dynamic had shifted overwhelmingly in favor of doing something big,” said one person in direct communication with several senior Treasury officials, speaking on the condition of anonymity to describe private conversations. “They were becoming increasingly concerned about a bloodbath on Monday.”

Worry starts in California

In the tech and venture capitalist circles that Silicon Valley Bank served, the anxiety had been mounting for days.

It began with a public notice March 8 that the firm had offloaded $21 billion worth of securities and was moving to sell another $1.25 billion in its own stock to shore up its balance sheet. The news came as a surprise to many of SVB’s investors and customers. Moody’s Investor Services, an independent credit rating firm, downgraded SVB after reviewing the bank’s business.

By the evening, texts, calls and emails began bouncing between tech investors and start-up founders. The news traveled especially fast in the tightknit Valley, where new companies often share the same stable of investors, said Isa Watson, the CEO of New York-based social media start-up Squad, which banked with Silicon Valley Bank.

Soon, federal policymakers and SVB’s customers alike were starting to worry about whether the bank would make it through the weekend. Around 9 a.m. Eastern on Thursday, Union Square Ventures emailed its portfolio companies to warn them about the situation, according to a person who received the email. USV is one of the most influential early-stage venture capital firms and was an early investor in Twitter, Etsy and Duolingo. Its portfolio includes dozens of start-ups, many of which banked with SVB.

Watson spoke to several investors, some of whom said to pull her company’s money out, while others cautioned not to make a rash decision, she said. She decided to wait. But many of Silicon Valley Bank’s customers did not. On Thursday alone, roughly $42 billion fled SVB accounts, according to California’s financial protection authority — a full-blown run on the bank.

Wall Street halted trading in SVB shares Friday as its stock price plummeted. State and federal regulators moved to close the bank around noon Eastern — 9 a.m. at most of its branches — in a surprising development because it happened during normal business hours.

In the hours to follow, the extent of the problem became clear: Silicon Valley Bank held an unusually high percentage of its assets in Treasury bonds. When the Federal Reserve raised interest rates, the value of existing bonds — a normally safe asset — went down. So the bank could not sell those bonds easily to make good on customers’ deposits as panic set in, and many flooded the bank seeking to withdraw their funds.

Many of the bank’s customers, meanwhile, were not the usual fare — they were investors, companies and other large institutions. It had more than $170 billion in deposits by the end of December, but 90 percent of them exceeded $250,000, the amount up to which the federal government insures in the event of a collapse.

By Saturday, Yellen, Federal Reserve Chair Jerome H. Powell, and Federal Deposit Insurance Corp. Chairman Martin J. Gruenberg convened for the first of several emergency meetings that would lead to extraordinary action. They agreed to move forward to ensure bank depositors were protected — at no taxpayer expense — in a way that would ensure the payrolls of companies that had banked at SVB could operate normally by Monday. Otherwise, they feared a cascading set of consequences would leave many Americans out of work. They also determined to announce the plan before Asian markets opened Sunday night.

Compounding the deadline, the Biden administration faced calls for urgent action from some of the biggest names in Silicon Valley, who wanted to see all depositors — regardless of their size — made whole.

Sounding alarms were the likes of Reid Hoffman, the founder of LinkedIn and a partner at Greylock, a major venture capital firm. A prolific donor to Democrats, including Biden, he took his concerns to Democratic lawmakers and administration officials. Ron Conway — another of the area’s leading investors, with original stakes in Airbnb, Facebook and Google — worked with Pelosi and Gov. Gavin Newsom to put pressure on the White House, Treasury Department and elected officials.

More than 600 tech executives, engineers and investors piled onto a hastily arranged, late Friday call with Rep. Ro Khanna (D), whose Bay-area district includes the headquarters for Silicon Valley Bank. Publicly, Khanna soon emerged as a forceful voice calling for the Biden administration to rescue the bank’s depositors, warning about broader financial shocks to come.

Eric Barnes with FDIC stands outside Silicon Valley Bank in Menlo Park, Calif.© John Brecher for The Washington Post

The lobbying blitz reflected a broader sea change in the normally libertarian tech industry — one that typically tries to ward off federal intervention. Now, many of those same voices were calling on the Biden administration to act and protect an ecosystem in which they had a large stake.

California lawmakers, meanwhile, mounted their own pressure campaign in Zoom calls and other contacts with Biden administration officials. They immediately began to hear from voters, business owners and political donors, who feared the economic blow that the bank’s collapse could bring.

“When I went to do a little grocery shopping, I couldn’t help but notice a lot of people at the banks,” said Rep. Anna G. Eshoo, whose Golden State district includes a portion of the tech industry, recalling her concerns over the weekend.

Rep. Maxine Waters (Calif.), the top Democrat on the financial services committee, started raising the issue with the FDIC late Friday. Rep. Zoe Lofgren (D), who leads the California delegation, by Saturday evening organized the first of several meetings between a wider array of state lawmakers and federal banking regulators.

Initially, Democrats expressed their broad belief that the government, first and foremost, should try to secure the sale of Silicon Valley Bank. But as the potential dangers became more apparent of letting uninsured bank deposits evaporate, party lawmakers shifted toward trying to persuade the administration to take any action necessary to stave off crisis.

California members told administration officials stories of local businesses that stood to suffer in the event of a financial catastrophe, even beyond tech. In one example, they pointed to a payroll processor that parked its money at SVB and served nearly 1 million workers — people who could miss paychecks if large depositors weren’t rescued. Khanna, meanwhile, pointed to a local food bank that had relied on the now-failed firm.

Warnings informed Biden’s decision

The administration still faced obstacles to sweeping action. Biden had reservations about approving a plan that could be spun as a bailout for bank shareholders. Sen. Bernie Sanders (I-Vt.) was publicly warning against a bailout as well.

The White House needed a plan that would not further alarm financial markets. SVB’s collapse was public, but few outside the government knew yet that Signature Bank — with more than $100 billion in assets — was heading toward failure too. Officials feared that Signature’s collapse on the heels of SVB’s could have a much greater ripple effect, and they wanted to make sure the news surfaced at the same time as the administration’s sweeping rescue plan.

Federal Reserve officials had access to the overnight filings of all the banks and their cash needs, giving them the ability to estimate their liquidity. The information was passed to the Treasury Department, with Yellen — a former Fed chair — serving as the key conduit between the central bank and political leadership at the White House.

Inside the White House, responsibility for managing the crisis fell primarily to Zients, Brainard and White House Deputy National Economic Council Director Bharat Ramamurti. Brainard had only been on the job for weeks but was almost perfectly situated to respond to a banking crisis, having recently left the Fed after more than eight years.

Deputy Director of the National Economic Council Bharat Ramamurti during a briefing Aug. 26.© Demetrius Freeman/The Washington Post

Although administration officials had largely decided by Saturday night that all depositors must be protected, they also worried about how to ward off the perception that they were acting primarily to bail out the rich and well connected who had been pressing for help. The plan does not protect the SVB’s shareholders or executives.

“There was a lot of concern about: What is the messaging here?” said one person, who spoke on the condition of anonymity to describe private deliberations. “Are we just saving these rich people, or are we doing something to save the economy? How do we present that, and what do we demand in terms of accountability to make clear this is not favorable treatment for a select few?”

Biden has emphasized that the plan is focused on protecting workers and small businesses.

On Sunday afternoon, after Biden signed off on the plan, members of the FDIC and Federal Reserve boards voted unanimously to declare that the failures of SVB and Signature posed a systemic risk to the entire financial system. The Fed also announced a new mechanism to provide loans at favorable terms to banks under duress.

By Tuesday afternoon, the storm appeared to have calmed, and stock prices in the banking sector had stabilized. And yet other risks may lie just around the corner. The Fed is expected to continue raising interest rates this year in its campaign to thwart inflation, which could subject other banks to the same challenges.

“The weekend intervention dampened the immediate crisis,” said Bob Hockett, a Cornell University economist. “But continued rate hikes will simply bring more distress to industries — and thus to their banks — in the weeks and months to come.”

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Image: Reuters Graphics

EU power rejig may only solve tomorrow’s problem

Von der Leyen’s promised reform luckily shies away from the most radical calls for change. Under the current system, wholesale electricity prices are set by the most expensive energy source, which last year was ballooning gas.

Reuters By Lisa Jucca, Editing by Germán & Co

MILAN, March 14 (Reuters Breakingviews) - Spooked by skyrocketing electricity prices, European Commission President Ursula von der Leyen in August declared the bloc’s power market was “no longer fit for purpose,” and promised an overhaul. Her pledge came after the collapse of Russian supply boosted prices of gas for delivery in the next month to a record level above 300 euros per megawatt hour, lifting electricity tariffs in tandem and hurting European consumers and companies. The proposed fix, to be unveiled on Tuesday, is however unlikely to address further short-term jitters.

Von der Leyen’s promised reform luckily shies away from the most radical calls for change. Under the current system, wholesale electricity prices are set by the most expensive energy source, which last year was ballooning gas. That prompted countries like Greece and Spain to propose to separate cheaper solar and wind generation from fossil fuels. That would have risked stifling green electricity production, which is cheaper, by culling the profit margin producers by design enjoy in the EU structure. The Commission wisely refrained from such a step.

To make Europe less dependent on volatile fossil fuel prices requires installing more green energy power. To this end, Brussels is proposing that the 27 member states foster the development of all future renewable energy projects through two-way contracts for difference (CFDs), according to a draft seen by Reuters Breakingviews. These price-support schemes, already popular in Britain to encourage low-carbon generation, are long-term agreements that provide for government compensation if electricity prices fall below a strike price. But they allow the government to keep the difference if prices rise above that set level.

The approach is not as market-friendly as fixed-price, subsidy-free power purchase agreements, which last year only made up 1% of total power generation. But by providing a fixed price below which suppliers will be reimbursed, it protects green power developers against a future scenario where electricity prices are way too low rather than way too high. That reduces their financial risks and cost of capital. When electricity prices are above the strike price governments can redistribute the additional revenue to vulnerable consumers.

The main drawback is the new CFDs will only apply to new projects. Hence it would likely take 5 to 10 years to spread across the EU. By then, greater availability of green power may have reduced demand for gas, and therefore its price. The risk of a resurgence of the European energy crisis, however, is all skewed to the near term.

Europe’s less radical reform of its power market is welcome. But it may only help solve tomorrow’s problem.

CONTEXT NEWS

The European Commission is expected to unveil on March 14 proposed reforms to the European Union power market aimed at shielding consumers from the wild price swings experienced in 2022.

Under the proposed reform, public support for all new green energy projects, including nuclear power ones, should be structured around two-way contracts for difference, according to a draft proposal seen by Reuters Breakingviews.

These contracts, usually signed between a government entity and a power generator, set a strike price below which compensation is offered by the government. If prices rise above the agreed level, the government is allowed to keep the difference. The proposal suggests governments should channel the extra revenue to consumers in time of high electricity prices.

The draft proposal also envisages trying to increase the number of Power Purchase Agreements, subsidy-free bilateral contracts that fixed the energy price at a set time for an agreed period of time, for example by offering state guarantee to protect producers from buyers’ failure. PPAs currently only cover 1% of total European Union electricity generation, according to data provider Independent Commodity Intelligence Services.

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Image: design by Germán & Co

Putin says Germany remains "occupied"

Western countries, particularly Germany, have reacted cautiously to probes into the blasts which hit Russia's Nord Stream gas pipelines last year, stating they believe they were a purposeful act, but failing to specify who they suspect was responsible.

REUTERS, Editing by Germán & Co

March 14 (Reuters) - Russian President Vladimir Putin said Germany's response to the explosion on North Sea pipelines showed that the country remained "occupied" and unable to act independently decades after its surrender at the end of World War Two.

Putin, interviewed on Russian television, also said European leaders had been browbeaten into losing their sense of sovereignty and independence.

Western countries, including Germany, have reacted cautiously to investigations into the blasts which hit Russia's Nord Stream gas pipelines last year, saying they believe they were a deliberate act, but declining to say who they think was responsible.

"The matter is that European politicians have said themselves publicly that after World War Two, Germany was never a fully sovereign state," Russian news agencies quoted Putin as telling state Rossiya-1 TV channel.

"The Soviet Union at one point withdrew its forces and ended what amounted to an occupation of the country. But that, as is well known, was not the case with the Americans. They continue to occupy Germany."

Putin told the interviewer that the blasts were carried out on a "state level" and dismissed as "complete nonsense" suggestions that an autonomous pro-Ukraine group was responsible.

The pipelines were intended to bring Russian gas to Germany, though since Moscow's invasion of Ukraine a year ago Berlin has taken steps to reduce its reliance on Russian hydrocarbons.

Leaders in Berlin have been careful about apportioning blame for the explosions, with Defence Minister Boris Pistorius saying last week the blasts could have been a "false-flag operation to blame Ukraine".

Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Germán & Co

Silicon Valley Bank’s Fall Is a Passing Cloud Over Clean Energy

Japanese and European banks have traditionally been big clean-energy lenders, too

SVB made about $1.2 billion of project finance loans to U.S. renewable energy projects in 2022.

The Wall Street Journal By Jinjoo Lee, March 14, 2023

Silicon Valley Bank’s fallout has clearly spooked some investors in clean energy stocks. How worried should they really be?

Even after a rebound Tuesday, residential solar company Sunrun, RUN -4.28% battery-storage company Stem STEM -0.69% and fuel-cell manufacturer Bloom Energy BE 1.05% are all down around 7% to 10% since SVB Financial SIVB -60.41% proposed a capital raise on March 8. All three companies are previous or current clients of the bank. 

This is despite some of those companies’ assurances that their exposure to SVB is manageable. Sunrun, which disclosed Friday that it had $40 million of undrawn loan commitments from SVB, said in an emailed statement that the company is confident in its ability to replace those. Meanwhile, Stem said less than 5% of its cash and short-term investments could be affected. Both Sunrun and Stem stressed that they have relationships with a large group of banks.

Top 10 U.S. renewable project finance loan​providers in 2022: MUFG, KeyBank, SMBC, CoBank, National​ Bank of​ Canada, Silicon Valley ​Bank, CIBC, Societe​Generale, Credit​Agricole, HSBC.

While the initial stock-price reactions may have been overdone, they do underscore SVB’s importance as a lender in the clean-energy space. It made about $1.2 billion of project finance loans to U.S. renewable-energy projects in 2022, according to data provider Infralogic. That made SVB the sixth-largest lender in the space. Earlier this year, SVB announced that it has committed to provide at least $5 billion by 2027 in financing to support sustainability investments, including renewable energy.

Industry advisers say there is more than enough appetite from banks to fill the gap. Japanese and European banks have traditionally been big lenders in the space; they like the steady—albeit low—returns and the green profile of renewable energy projects using mature technologies. “I think there’s more money out there than good deals that can be done,” said Ted Brandt, chief executive officer of boutique investment bank Marathon Capital. 

Still, access to lending could get slower for smaller clean-energy spaces where SVB carved out a niche, such as fuel cells and community solar projects, at least as other lenders get comfortable with those risk profiles. SVB estimated that it participated in about 62% of all community solar financings as of March 31, 2022. Credit assessment for community solar projects, which allow multiple households or small businesses to buy power from a local solar facility, can be more complex than those with a single utility or investment-grade corporate buyer. 

Of course, many SVB bankers will likely land jobs at other lenders and could continue those relationships. SVB’s collapse is likely to leave a more noticeable gap for the types of early stage, small clean-energy technologies that are in the domain of venture capital. 

Another thing worth monitoring is how much the fallout from SVB affects other regional banks, such as by prompting deposit withdrawals and limiting their ability to lend. Some regional banks are active lenders and advisers to clean energy projects. KeyBank, for example, was the second-largest provider of U.S. renewable project finance loans last year, according to Infralogic. Zions Bancorp and East West Bank are active lenders in the space, and U.S. Bancorp has been a regular tax equity provider. For now, that risk seems to be at bay: After a rout on Monday, regional bank stocks rebounded sharply Tuesday morning.

SVB’s collapse could cast a slight shadow on clean energy, but one that should pass fairly quickly.

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Cooperate with objective and ethical thinking…

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News round-up, March 14, 2023

Editor's thoughts…

Where is the global economy heading? Can Latin America withstand a potential new banking crisis?

With a lot of effort, Latin America has managed to survive this last year's pandemic economically period, in addition to potent sources of political instability, starting with Chile, followed by the giant of the region, Brazil, the infinite crisis in Argentina, and what to say about Peru where presidents unbelievably last milliseconds in office.

And as if that were not enough, with a Venezuela whit unpredictable destiny, Colombia tried vainly to advance the peace process. As always, a colorful and wonderful Mexico in Neruda's words, but always undefined and full of surprises, and Central America that have failed to recover from the ups and downs of the previous century.

And now Latinamerican is relegated by the global geopolitical echos and war crises; its primary focus is Europe, with a second focus on the Formosa Strait, which barely separates Taiwan from Mainland China by 182 kilometers (and 130 at the minimum), whit a third guest whose hobby is to launch fireworks periodically to emphasize that —-he is present there—-, which has forced Japan to abandon its pacifist post-World War II policy.

According to the World Bank's current X-ray of the economic state of the post-pandemic region of Latin America and the Caribbean's recovery from COVID-19, the pandemic was expected to grow by 3% in 2022. Still, global uncertainty and low growth rates of 1.6% and 2.3% are expected in 2023 and 2024. Countries to consolidate recovery, promote growth and reduce poverty and inequality must continue to invest in social programs and infrastructure, improve the efficiency of public spending, and address the effects of climate change. Following crises, opportunities can emerge in the industry sector, such as accelerating digitalization, improving market competitiveness, and increasing economic efficiency. However, if structural factors are addressed, strong and sluggish growth is likely to continue and be sufficient to make progress in the fight against poverty and social tensions. The pandemic has caused an estimated loss of 1.5 years of learning, mainly affecting the youngest and most vulnerable.

Policies for re-enrollment and retention, to recover primary education leveling of learning, prioritization of fundamental competencies, implementation of programs to meet learning goals, and development of teachers' and students' health, psychosocial and emotional well-being are needed. Green growth is an opportunity for the region, as it contributes only 8% of global GHG emissions and has enormous potential in renewable electricity and natural capital. Climate change is causing significant economic and social losses, and the World Bank has doubled its climate finance and initiated country-level diagnostics to support countries' climate and development goals.

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Most read…

Washington’s bank rescue fails to erase all doubts after Silicon Valley Bank collapse

[‘Is this a bailout?’ and six more questions about the weekend bank collapses]

“Banks don’t live or die based on what the stock price is,” she said.

By David J. Lynch and Tony Romm, The Washington Post, TODAY

A Brussels murder mystery: Who knifed the banking union (again)?

The collapse of Silicon Valley Bank means questions are again being asked about why the EU can’t tighten its rules.

POLITICO EU by BY HANNAH BRENTON, MARCH 13, 2023 

Oil prices fall $1 as SVB collapse spooks financial markets

"The market had previously expected a strong recovery of the Chinese economy, but the latest February inflation rate was only 1% year-on-year, reflecting the current deflationary state of the Chinese economy and weak demand," he said.

REUTERS By Stephanie Kelly and Emily Chow editing by Germán & Co

EU to revamp power market, aiming to blunt price spikes

By encouraging nations to employ more contracts that lock in stable, long-term power costs, draft versions of the EU plan detail measures to make consumers less vulnerable to short-term volatility in fossil fuel prices.

Reuters By Kate Abnett editing by Germán & Co

EU drafts rules to stop power suppliers cutting off vulnerable consumers

According to the letter, written under the direction of German legislator Michael Bloss, millions of people in Europe presently have to decide between heating their homes or buying food for their families.

REUTERS By Kate Abnett, editing by Germán & Co

Opinion | Is Joe Biden a Stealth Socialist?

Whatever you call him, the Republican attacks won’t work.

POLITICO.COM, Opinion by JEFF GREENFIELD, 03/14/2023

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: Germán & Co

Washington’s bank rescue fails to erase all doubts after Silicon Valley Bank collapse

[‘Is this a bailout?’ and six more questions about the weekend bank collapses]

“Banks don’t live or die based on what the stock price is,” she said.

By David J. Lynch and Tony Romm, The Washington Post, TODAY

Washington’s banking rescue had a rocky start Monday on Wall Street, as the government’s response to the collapse of Silicon Valley Bank failed to quell doubts about the health of some midsize banks and left investors debating whether the Federal Reserve would be forced to change course in its fight against inflation.

The day began with President Biden at the White House seeking to calm fears of a banking crisis before leaving Washington for a California swing.

“Americans can have confidence that the banking system is safe. Your deposits will be there when you need them,” the president said in midmorning remarks from the Roosevelt Room.

In Silicon Valley, relieved customers lined up outside SVB branches to withdraw funds they had feared would be lost. Depositors at the bank’s Menlo Park location said they waited up to two hours to get their money in cashier’s checks. The only evidence of the failed bank’s new owners was a Federal Deposit Insurance Corp. new release taped to the door.

On Wall Street, bank stocks were ravaged, with regional institutions hit hardest. First Republic Bank, another midsize bank, saw its share price fall nearly 80 percent before ending the day down 62 percent. The plunge came despite word that the bank had shored up its balance sheet with a capital infusion from JPMorgan Chase.

Even some of the nation’s largest and best-protected banks were shunned. Shares of Citigroup lost more than 7 percent while Wells Fargo fell 6 percent. Broader stock markets were flat.

“Payrolls are being met in Silicon Valley.

There aren’t massive outflows that we can see. So I think that means it has been reasonably successful,” said Lawrence Summers, a former treasury secretary.

“But the financial system suffered a shock and, while the emergency room physicians have done a good job, the patient is not back to full health.”

While the market response was noteworthy, falling stock prices pose no immediate threat to the banks. So long as depositor withdrawals remain at customary levels, healthy banks can continue to operate even as their share prices gyrate, said Karen Petrou, managing partner of Federal Financial Analytics, a Washington consultancy. Bank health is determined by the amount of capital they hold in reserve to absorb losses and the adequacy of their available assets to meet any depositor withdrawals.

[‘Is this a bailout?’ and six more questions about the weekend bank collapses]

“Banks don’t live or die based on what the stock price is,” she said.

Still, the appearance of cracks in the nation’s regional banks has caused an extraordinary turnabout in financial conditions that has triggered a swift change in investor expectations of Fed interest rate actions.

Less than one week ago, Fed Chair Jerome H. Powell told Congress that interest rates might need to go higher than the central bank had expected to bring inflation under control. Wall Street analysts expected the Fed to raise rates by up to half a percentage point at its next meeting March 22 and warned that the Fed’s benchmark lending rate could go as high as 6 percent from the current target of 4.5 percent to 4.75 percent.

Now, 40 percent of investors expect the Fed to leave rates untouched and to start cutting them by midsummer, according to the CME FedWatch tool, which is based on futures prices.

The government is scheduled to release the next consumer price index reading Tuesday. If inflation remains stubbornly high, the Fed will be caught between its anti-inflation mandate and its need to maintain financial stability.

Goldman Sachs late Sunday said it expects the Fed to pause its year-long campaign of rate increases. “Fed officials are likely to prioritize financial stability for now, viewing it as the immediate problem and high inflation as a medium-term problem,” the firm’s economists said in a research note.

Evidence that investors were increasingly skeptical that the Fed will be able to continue raising rates also could be seen in the rush to buy government securities. Investors bought so many two-year Treasury securities that the yield plunged below 4 percent on Monday from more than 5 percent last Wednesday - the sharpest three-day plummet since the 1987 market crash.

Authorities’ remarkable Sunday intervention to safeguard the banking system followed days of mounting concern that the troubles at SVB, the favored bank of tech entrepreneurs and venture capitalists, would spread to other institutions.

A person leaves one of the Signature Bank branches in New York, Monday, March. 13, 2023. President Joe Biden is telling Americans that the nation’s financial systems are sound. This comes after the swift and stunning collapse of two banks that prompted fears of a broader upheaval. (AP Photo/Yuki Iwamura)

Ruling that the failure of SVB and a second troubled lender, Signature Bank of New York, posed a “systemic risk” to the economy’s financial plumbing, federal officials closed both banks, guaranteed their deposits beyond the $250,000 statutory limit and removed their management teams.

At the same time, the Fed established a new lending program to allow any other bank to obtain unlimited loans by pledging as collateral assets such as Treasury securities. The effort is designed to address problems many banks have been facing, as a result of the Fed’s interest rate increases and their own investment choices.

Unlike its normal bank lending, the Fed will make loans for up to one year and will value the pledged securities at their original value rather than their depressed market price.

Banks at the end of last year had $620 billion in unrealized losses on such securities, which saw their value erode as the Fed raised interest rates.

Authorities’ intent was to eliminate any doubt about the safety of depositors’ funds. But several regional banks, including Pacific Western Bank in California and Zions Bank in Utah, remain the focus of scrutiny and speculation. Investors worry that some banks might share SVB’s reliance upon a narrow depositor base and assets that have lost value during the past year of rising interest rates.

First Republic said Sunday that it had more than $70 billion in liquid funds, after its recent infusion from JPMorgan. In a joint statement, the bank’s chairman, Jim Herbert, and chief executive Mike Roffler said, “First Republic’s capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks.”

In January, the company reported strong financial results with $1.7 billion in profits on revenue of $5.9 billion.

On Capitol Hill, the administration’s action won backing from the Republican chairman of the House Financial Services Committee. The Fed and FDIC have “taken the right approach, and they’ve used their powers in a way that is appropriate,” Rep. Patrick T. McHenry (R-N.C.) said in an interview. “I think we have a financial system that is equipped to deal with this, and it is my hope the actions by the FDIC and Fed will calm this current storm.”

On Monday, the plan also drew a qualified endorsement from S&P Global Ratings, which called the Fed initiative “robust” and said it should “reduce the odds that unmanageable deposit outflows spread widely.”

But the ratings agency cautioned that it remained unclear how depositors would respond.

“The jury’s still out,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. “I don’t know if it stops the run.”

In Wall Street computer chatrooms, traders are debating the need for the government to do more. If additional banks suffer deposit runs, the government may need to explicitly guarantee all uninsured deposits in the banking system, some have said, according to Chandler.

In 2008, the FDIC did just that under its Temporary Account Guarantee Program, a measure that remained in force through 2012.

The administration’s approach did not mollify all lawmakers.

In the days before its intervention, the U.S. government received an offer to buy the embattled Silicon Valley Bank, according to Sen. Bill Hagerty (R-Tenn.), a member of the chamber’s banking committee who said he learned about the matter at an FDIC briefing Monday afternoon.

Hagerty said he did not know the bidder. But he said that “evidently they turned the offer down in the hopes of getting something better later.”

The FDIC declined to comment on the situation.

The Wall Street Journal, citing people familiar with the matter, reported Monday that regulators were planning to make a second attempt to find a buyer for SVB.

Other lawmakers separately said they had pressed the government in recent days for information about the auction, though regulators remained tight-lipped.

“What we should have seen is a properly run auction process. Instead, what they did was hijack the systemic risk exception,” Hagerty said, noting that the burden could fall on local banks, which in some cases are taxpayers, and may owe more in fees.

As officials reiterated that the financial system remained sound, some banking industry veterans were reasonably confident about navigating the storm.

“Things will be bumpy for a couple of days,” said Bert Ely, a banking consultant. “Then - assuming there are no new disruptions - things will calm down.”

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Image: Germán & Co

A Brussels murder mystery: Who knifed the banking union (again)?

The collapse of Silicon Valley Bank means questions are again being asked about why the EU can’t tighten its rules.

POLITICO EU by BY HANNAH BRENTON, MARCH 13, 2023 

It's the latest Brussels bubble whodunnit: Which country wielded the knife against the EU's half-formed banking union this time?

As the collapse of U.S. lender Silicon Valley Bank again shines a light on the fragility of the world's financial system, speculation grows within the EU’s corridors of power about who or what prompted the European Commission — at the last minute — to pull a controversial piece of banking legislation.

The plan for tighter rules on bank bailouts mysteriously dropped off the Commission's agenda for last week, and it's now expected to be M.I.A. for at least a month. Or even longer.

And there couldn't have been a worse time for Europe's banking union plan to suffer another flesh wound.

The decision to delay came ahead of the collapse of SVB, which had $209 billion in assets — requiring a U.S. government backstop for all depositors and exposing gaps in the framework for handling failing banks.

While SVB's business model was relatively unusual, and heavily dependent on the tech industry, the bank was a mid-sized lender in the bigger U.S. market.

The on-hold EU rules are aimed at stopping a middle layer of banks from receiving public money in a crisis, and the U.S. decision to rescue all SVB depositors will raise questions about whether Europe's framework could do the same to stop a bank run.

There are plenty of countries with a motive to delay the latest EU proposal. Plenty of other protagonists too. At POLITICO we’ve donned our fedora to investigate the most likely list of suspects, as officials and diplomats point fingers at each other behind the scenes.

While individual countries will often happily claim credit for blocking a reviled piece of EU law, anyone holding up the banking union — one of the EU’s hallmark projects to strengthen banks and build a single market — would be publicly reneging on previous political commitments. And that could now be particularly ill-timed after the events of the weekend.

So, the assailants have been working in the shadows — which in Brussels means writing strongly-worded letters and meeting commissioners in private.

But curtain-twitchers along Rue de la Loi and the Schuman roundabout suggest there are five possible culprits:

Suspect No. 1: Germany

Germany has previous. Berlin last year killed off an EU-wide deposit insurance scheme due to concerns over joint debt and bad flashbacks to the eurozone crisis. That led to the current mandate for Brussels to close loopholes in the bank crisis management and deposit insurance (CMDI) review.

This time round, Germany is likely to want an exemption for its politically sensitive protection schemes for cooperative and savings banks, making it suspect number one.

“It seems clear it is to do with Germany, I don’t know any other [member country] who made blocking concerns at this phase,” said one EU diplomat, who spoke on condition of anonymity because of the sensitivity of the discussion.

But Berlin isn’t taking the blame. “We’re not requesting a delay or postponement of the CMDI review. The review is an important step in the work of the Banking Union,” said a German diplomat.

Suspect No. 2: France

That brings us to our second suspect. At an EU level, Paris generally fights tooth and nail to protect the interests of its big banks. While the delayed set of reforms are predominantly aimed at smaller lenders, France doesn’t want any more costs imposed on its larger institutions.

But the French, too, say they’re not responsible for CMDI’s disappearance.

“We fully support the principle of an ambitious reform of the crisis-management framework, but we realize that these are positions that are not yet consensual in the Council, and the Commission no doubt judged that it needed a little more time to see what level of ambition to include in the project,” said a French economy ministry official.

Suspect No. 3: Unintentional driveby

And so, there’s a third theory.

Germany and France signed up to a single-page statement with the Netherlands and Finland that was sent to the Commission back in December, raising concerns over the risks involved in expanding the use of national deposit guarantee schemes.

Some Brussels insiders think that gave the Commission pause because the EU executive would immediately face a blocking minority. But a second EU diplomat said it was “not fair” to blame the letter because it reiterated longstanding issues and was not intended to prompt a delay.

The plot thickens. But one thing is clear from our expert sleuthing: the proposal is being held up politically within the Commission. As well as the pressure from EU countries, that could be because of waning appetite at the top of Brussels officialdom.

And that brings us to our fourth suspect.

Suspect No. 4: Ursula von der Leyen

Yes, the European Commission president herself.

With only a little over a year left in this Commission’s five-year term, does von der Leyen really want to bring forward a political contentious reform on the esoteric issue of mid-sized bank bailouts?

“I just get the impression anything controversial is being kicked into touch,” said a third EU diplomat.

Suspect No. 5: Some guy with the documents in his drawer

But the most plausible — and by far the more boring option: Brussels bureaucracy. The Commission knows it will face tough opposition on the content, so its army of officials are making sure its plans are as watertight as possible, and before EU capitals attack them in public.

There may be some frantic rewriting going on. The Commission could also be playing a clever double bluff, by getting EU capitals to clamor for the reforms to come out.

“The Commission remains committed to bringing forward a proposal on CMDI,” said an EU official.

The longer it takes though, the more doubt there is over whether the thing's still alive at all.

And in case you are interested in the forensics ...

The Commission’s plans are expected to bring more mid-sized banks into the resolution framework, a major post-financial crisis reform that means shareholders and creditors rather than taxpayers swallow losses if a bank fails.

Under the missing plans, countries would be able to use their national deposit guarantee schemes — which protect deposits to the tune of €100,000 — upfront to cover losses, rather than only after a collapse, and change their debt ranking.

A middle tier of banks, which until now haven't fit neatly into the resolution regime and have continued to receive public money in a crisis, would then be able to meet conditions to access an EU rainy-day fund that would pay for their exit from the market.

All of that is hugely controversial and risks pitting EU goals of closer integration against national fears of being on the hook for losses in another country. So, our suspects may not have needed much provocation.

Now, the collapse of SVB and its potential implications also throws a wildcard into the mix.

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Image:design by Germán & Co, licensed through Shutterstock

Oil prices fall $1 as SVB collapse spooks financial markets

"The market had previously expected a strong recovery of the Chinese economy, but the latest February inflation rate was only 1% year-on-year, reflecting the current deflationary state of the Chinese economy and weak demand," he said.

REUTERS By Stephanie Kelly and Emily Chow

March 14 (Reuters) - Oil prices fell more than $1 on Tuesday, extending the previous day's slide, as the collapse of Silicon Valley Bank rattled equities markets and sparked fear about a fresh financial crisis.

Brent crude futures were down 87 cents, or 1.1%, at $79.90 a barrel at 0345 GMT. U.S. West Texas Intermediate crude futures (WTI) dropped 85 cents, or 1.1%, to $73.93 a barrel. On Monday, Brent fell to its lowest since early January, while WTI dropped to its lowest since December.

The sudden shutdown of SVB Financial (SIVB.O) triggered concerns about risks to other banks resulting from the U.S. Federal Reserve's sharp interest rate hikes over the last year. It also spurred speculation on whether the central bank might slow the pace of its monetary tightening.

U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system after fears of contagion from the failure of Silicon Valley Bank led to a sell-off in U.S. assets at the end of last week and state regulators closed New York-based Signature Bank (SBNY.O) on Sunday.

Beyond the Silicon Valley Bank shockwaves, oil prices were also under pressure due to signs of a weaker-than-expected economic recovery in China, despite the lifting of its strict COVID-19 restrictions, said Leon Li, an analyst at CMC Markets.

"The market had previously expected a strong recovery of the Chinese economy, but the latest February inflation rate was only 1% year-on-year, reflecting the current deflationary state of the Chinese economy and weak demand," he said.

China's statistics bureau released data last week showing consumer inflation in the world's second largest economy slowed to the lowest rate in a year in February as shoppers remained cautious even after pandemic curbs were lifted in late 2022.

In U.S. supply news, the American Petroleum Institute is expected to release industry data on U.S. oil inventories on Tuesday.

Six analysts polled by Reuters estimated on average that crude inventories rose by about 600,000 barrels in the week to March 10.

Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Germán & Co

EU to revamp power market, aiming to blunt price spikes

By encouraging nations to employ more contracts that lock in stable, long-term power costs, draft versions of the EU plan detail measures to make consumers less vulnerable to short-term volatility in fossil fuel prices.

Reuters By Kate Abnett editing by Germán & Co

Electrical power pylons of high-tension electricity power lines are seen in Brussels, Belgium, November 24, 2022. REUTERS/ Johanna Geron

BRUSSELS, March 14 (Reuters) - The European Commission is set to propose a revamp of Europe's electricity market rules on Tuesday, aimed at expanding the use of fixed-price power contracts to shield consumers from severe price spikes like those experienced last year.

The European Union vowed to overhaul its electricity market after cuts to Russian gas after its invasion of Ukraine last year sent European power prices soaring to record highs, forcing industries to close and hiking households' bills.

Draft versions of the EU proposal, seen by Reuters, outline measures designed to make consumers less exposed to short-term swings in fossil fuel prices - by nudging countries to use more contracts that lock in stable, long-term electricity prices.

Future state support for new investments in wind, solar, geothermal, hydropower and nuclear electricity, for example, must be done through a two-way contract for difference (CfD).

Two-way CfDs offer generators a fixed "strike price" for their electricity, regardless of the price in short-term energy markets.

Countries would also need to do more to encourage power purchase agreements (PPA) - another type of long-term contract to directly buy electricity from a generator - such as by providing state guarantees for such contracts.

Fossil fuel-powered generators would not receive this support. The aim is to direct support towards the huge investments in renewable energy EU countries need to quit Russian fossil fuels and meet climate change goals.

Other elements aim to push gas out of Europe's energy mix faster - for example, by requiring countries to expand energy storage and other alternatives to replace the role gas plants play in balancing the power grid.

Currently, power prices in Europe are set by the final generator needed to meet overall demand. Often, that is a gas plant, so gas price spikes - like those caused last year by Russia slashing gas deliveries - can send electricity prices soaring.

Despite Brussels pitching the reforms last year as a chance to "decouple" gas and power prices, the draft proposal - which could still change before it is published - avoids the deep electricity market reform that countries, including Spain and France, have called for, opting instead for more limited tweaks to stabilise prices.

Another camp of countries, including Germany, Denmark and Latvia, have warned major changes could scare off investors.

EU countries and the European Parliament must negotiate and approve the final rules, with some pushing for a deal by the end of the year.

Marco Foresti, market design manager at the European Network of Transmission System Operators (ENTSO-E), said the draft proposals had been met with "a bit of a sigh of relief" among those concerned about disrupting the functioning of short-term energy markets.

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Image: Germán & Co

EU drafts rules to stop power suppliers cutting off vulnerable consumers

According to the letter, written under the direction of German legislator Michael Bloss, millions of people in Europe presently have to decide between heating their homes or buying food for their families.

REUTERS By Kate Abnett, editing by Germán & Co

BRUSSELS, March 13 (Reuters) - European Union countries will have to protect vulnerable consumers from being cut off by electricity suppliers if they cannot pay their bills, according to draft EU rules due to be published on Tuesday.

The proposal is part of a broader upgrade of Europe's electricity market rules, which Brussels pledged to rewrite last year when soaring gas and electricity prices, driven by Russia cutting gas supplies to Europe, left consumers across Europe struggling to pay their energy bills.

A draft of the proposed law, seen by Reuters on Monday, said: "Member States shall ensure that vulnerable customers are protected from electricity disconnections."

The draft added that suppliers and national authorities should make measures available to help vulnerable consumers manage their energy use and costs.

EU countries decide which consumers to class as "vulnerable", based on factors such as income level or relying on health equipment that runs on electricity, such as a ventilator.

Currently, there is no explicit legal protection against disconnections, although the EU requires energy suppliers to give consumers information about support like prepayment systems and debt management advice ahead of a planned disconnection.

The article on disconnections was not in a previous draft of the proposal, reported by Reuters last week.

Green members of European Parliament wrote to the European Commission on March 8 urging it to ban disconnections for vulnerable people in the upcoming proposal.

"Millions of people in Europe currently have to make the choice between either buying food for their family or heating their home," said the letter, led by German lawmaker Michael Bloss.

Some governments have already banned disconnections nationally, such as Ireland, which did so this winter for vulnerable consumers struggling with soaring energy bills.

The draft EU power market reform, which could still change before it is published, would also expand the use of long-term fixed-price power contracts, to attempt to shield consumers from price spikes.

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Cooperate with objective and ethical thinking…

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Image: President Joe Biden’s new budget proposal, with high taxes on the mega-rich and expanded medical help for the working- and middle-class, has only fueled the attacks that go back at least to the 2020 campaign. | Wilfredo Lee/AP Photo

Opinion | Is Joe Biden a Stealth Socialist?

Whatever you call him, the Republican attacks won’t work.

POLITICO.COM, Opinion by JEFF GREENFIELD, 03/14/2023

Jeff Greenfield is a five-time Emmy-winning network television analyst and author.

There may be deep divisions within the Republican universe these days — over trade, Ukraine, Trump, Fox News — but there’s one unifying assertion: President Joe Biden is hell-bent on taking the United States down the road to socialism.

Biden’s new budget proposal, with high taxes on the mega-rich and expanded medical help for the working- and middle-class, has only fueled the attacks that go back at least to the 2020 campaign. It was the dominant theme of the GOP convention; it’s how National Review attacks Biden’s student loan forgiveness program; it’s how Nikki Haley and Matt Gaetz decry the president’s budget. Donald Trump, never one for subtlety, simply labels Biden and his supporters “communists.”

In one sense, this is very old wine in not-so-new bottles. Attempts to brand progressive policies as “socialist” go back — literally — for more than a century. Measured by its accuracy and its political impact, it’s not proven all that potent. But given the persistence of the tactic, it might be useful to set down a few key notions:

• Joe Biden is at pains to assert that “I’m a capitalist. I’m not a socialist.”

• A lot of what Biden is proposing would look quite at home in Scandinavia and Western Europe.

• Those nations aren’t really “socialist” at all, even if they’re celebrated by America’s best-known socialist.

• Republicans really, really hate socialism — but will also scream bloody murder if Democrats suggest they want to so much as touch the most obviously socialistic programs of the American government.

Making sense of these assertions does not require squaring a circle; what it does require is an understanding of just how amorphous the term “socialist” is, and why whatever you call Biden’s various policy goals, they are firmly within the American political tradition — and may indeed be very smart politics, at that.

All through his two presidential runs, Sen. Bernie Sanders was asked what it meant that he called himself a “democratic socialist.” Invariably, the Vermont independent would point to the Scandinavian nations and their universal health care, paid family leave and free college education. (He did not call for the government to “control the means of production and distribution,” the classic definition of socialism and an omission at odds with the Democratic Socialists of America, a 92,000-member organization that asserts: “We want to collectively own the key economic drivers that dominate our lives, such as energy production and transportation.”)

But are Denmark, Sweden and Norway really “socialist” nations? They wouldn’t cut it for the DSA. The private sector is alive and well, businesses have a lighter tax burden than in the U.S., and even their health care systems are far from totally public. In Sweden, by one estimate, some 40 percent of health clinics are private, for-profit enterprises.

Indeed, throughout the industrialized world, the traditional goal of socialism has long since been jettisoned, even as elements of its core philosophy have been embedded in government policy. For example, Germany, whether run by center-right Christian Democrats or center-left Social Democrats, is a resolutely capitalist land, but its laws also require workers to be well represented on large corporations’ supervisory boards, where key decisions are made. In Britain, the Labour Party under Tony Blair renounced nationalization almost 30 years ago. The last Labour leader to embrace the idea, Jeremy Corbyn, presided over a historic walloping at the polls, and current leader Keir Starmer says he would not nationalize the energy industry (though a significant element of the party’s rank and file embraces the notion of “common ownership”).

Ideas like universal health care and expansive workers’ rights have long carried the label of “social democracy”: if not full socialism, then the notion that the government should craft a strong social safety net, impose higher taxes on the wealthy and limit the private sector’s power. (Those who see the hand of Karl Marx in such ideas — as Ronald Reagan did when he assailed the idea of Medicare back in 1964 — need to contend with the fact that the father of government-financed old age and health insurance was the ardent anti-socialist Otto von Bismarck, who first proposed the idea in 1881).

In the 2020 Democratic presidential contest, the left had its champions and Biden was most certainly not among them. But even the most committed Bernie Bro might acknowledge the president’s progress toward nudging the United States toward social democracy.

Consider the elements of Biden’s bipartisan $40 billion investment in semiconductor manufacturing — itself an impressive display of industrial policy. The package comes with strings, the New York Times notes. Companies have to pay union wages; they have to share some of their profits with the government; they have to provide free childcare for their workers; they have to run their plants with environmentally friendly energy sources. These proposals are of a piece with some of the more ambitious Biden policies, some of which, like the expanded child-tax credit, have expired, and some of which, like capping the price of insulin for seniors, remain in place and have been embraced by the private sector. His recent State of the Union address contained a swath of proposals to limit the power of private companies, whether by capping excessive airline baggage fees or hidden credit card charges.

The response to all of this from Republicans has been to raise the specter of “socialism.” Last month, the GOP-controlled House voted 328-86 for a resolution declaring that “socialist ideology necessitates a concentration of power that has time and time again collapsed into communist regimes, totalitarian rule, and brutal dictatorships. … Congress denounces socialism in all its forms, and opposes the implementation of socialist policies in the United States of America.” If the goal was to split their opponents, Republicans succeeded: More than 100 Democrats voted for the resolution which, taken literally, would condemn the policies of some of America’s most resolute allies, and which was clearly designed to throw shade at the president.

Of course, almost as vociferous as the GOP’s denunciation of socialism was its fury at the very idea the party might be moving to lay a finger on the two most clearly socialistic elements of U.S. policy — Social Security and Medicare.

When Biden used his State of the Union address to note that “some” Republicans were suggesting cuts in the programs — most specifically Sen. Rick Scott of Florida — GOP lawmakers erupted in anger. Scott, for his part, quickly amended his proposal sunsetting government programs by exempting the popular social insurance systems. It calls to mind the cry of a citizen at a congressional town hall meeting years ago: “Keep your government hands off my Medicare!” (Notably, Donald Trump also deserves some credit for steering the GOP away from a free-market orthodoxy intent on gutting retirement programs.)

It’s a little unfair to ascribe cognitive dissonance solely to Republicans. The confusion about what consists of “socialism” is pervasive. Polls show Americans disapprove of “entitlements,” but overwhelmingly approve of Social Security, Medicare and veterans’ benefits — in other words, programs people are entitled to by law. Sanders’ idea of free tuition for public colleges may seem a reach, but a generation or two ago, free college was widely available. City University of New York was famously tuition free from 1847 until 1976, and many state universities once imposed only fees. In some places, community college is still free.

A large majority of Americans see health care as a right, even as majorities of Americans say the government is too powerful and tries to do too much. This dissonance was crystalized by the election victory of Ronald Reagan, who proclaimed in his 1981 Inaugural Address that “government is not the solution to our problem, government is the problem,” and then presided over a government that was bigger when he left it. (For that matter, Margaret Thatcher never tried to repeal Britain’s national health insurance.)

In this populist moment, Biden has also won applause from the left and right for flexing government’s muscle when it comes to cracking down on Big Tech and the growth of monopolies, be they in the form of airlines or book publishers. Biden is showing his Rooseveltian roots, not just FDR but TR.

A long-running debate exists over why socialism failed to take root in the United States, unlike in Europe. In the near run, the success of Biden’s “social democracy” efforts will stand or fall on whether he can — as many of his Democratic predecessors did — define his policies not as the importation of a foreign ideology, but as part of a continuing effort to make the economic playing field fairer and safer without changing the fundamental rules of the game.

For a century or more, those efforts have met with powerful resistance, even as the political consensus gradually shifts toward a more robust American welfare state. The most recent example: Republicans have given up their efforts to repeal Obamacare after years of pushing to do just that. It turns out that, with a little more modest ambitions, “socialism” has found a home of sorts in this land of individual freedom — as long as you call it something else.

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News round-up, March 13, 2023

Where is the global economy heading?

JP Morgan's research department, meanwhile, has expressed surprise that SVB, for example, has undertaken a bond sale to increase the bank's liquidity so dramatically. In their view, they believe that this is more of a message that its strategy is one of liquidity prudence, given an uncertain outlook in which there could be further adjustments in liquidity needs due to outflows of customer deposits. JP Morgan also acknowledges that it was taken by surprise by the bank's drastic move. "We fully recognise that we did not see these aggressive actions to increase liquidity coming," it said in a report.

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Quote of the day… 

Treasury Secretary Janet Yellen said rules out a politically sensitive scenario of bailing California banks with taxpayers' money.

Thestreet.com by luc olinga

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Most read…

All This Economic Good News is Just Confusing

Many business leaders across the country were hoping for a dismal jobs report from the Bureau of Labor Statistics. Bad jobs numbers would mean that the economy is weakening, and that the Federal Reserve wouldn’t have to keep raising interest rates to get a handle on inflation. If interest rate increases stop, businesses will be able to borrow money more inexpensively.

TIME BY ALANA SEMUELS, MARCH 10, 2023

Janet Yellen Says Government Won't Bail Out Silicon Valley Bank

Treasury Secretary rules out politically sensitive scenario of bailing out California bank with taxpayers' money.

THESTREET by LUC OLINGA

Silicon Valley bank collapses and spreads to Europe: what happened and what are the risks?

The American institution faced liquidity problems, sold bonds at a loss and caused stock market falls across the financial sector. The US regulator yesterday intervened in its assets and will lead the process of selling the firm. The bank warns of the impact of the economic slowdown on SMEs: "Their environment will be more stressed". Silicon Valley Bank, in the United States, is an entity that mainly finances the technology sector. Silicon Valley Bank, in the United States, is an entity that mainly finances the technology sector ABC.

ABC.ES BY DANIEL CABALLERO, MADRID, SPAIN, TODAY

Biden administration to approve major oil project in Alaska -source

The Willow project, led by energy giant ConocoPhillips (COP.N), would be located inside the National Petroleum Reserve-Alaska, a 23 million-acre (93 million-hectare) area on the state's North Slope that is the largest tract of undisturbed public land in the United States.

Reuters By Nichola Groom and Maria Caspani

Britain's tax take risks blowing green energy off target

The British government has set targets for major increases in wind generation, for instance, as it seeks to meet a goal of net zero emissions by 2050 and to become more independent of imported energy following the supply disruption caused by Russia’s invasion of Ukraine.

Reuters By Susanna Twidale and Shadia Nasralla

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image: Germán & Co

All This Economic Good News is Just Confusing

Many business leaders across the country were hoping for a dismal jobs report from the Bureau of Labor Statistics. Bad jobs numbers would mean that the economy is weakening, and that the Federal Reserve wouldn’t have to keep raising interest rates to get a handle on inflation. If interest rate increases stop, businesses will be able to borrow money more inexpensively.

TIME BY ALANA SEMUELS, MARCH 10, 2023

But the jobs report was not dismal. The U.S. economy gained 311,000 jobs in February, the Bureau of Labor Statistics (BLS) said on March 10, about a third more than the 225,000 jobs predicted by economists polled by the Wall Street Journal. That follows a January gain of half a million jobs. The latest jobs report comes after a few more spots of strong data—U.S. consumer spending rose by the most in nearly two years in January, and there are still nearly two jobs for every unemployed worker, according to a BLS data release on March 8.

The jobs report does suggest that the economy’s breakneck speed of growth is slowing.

For example, the U.S. economy had added, on average, 343,000 jobs on average for the past six months, so February did represent a slight slowdown. Some industries continued to lose jobs, including information, which includes big tech companies, and transportation and warehousing, which includes the people who work in e-commerce. Wage growth appears to be slowing, and the unemployment rate ticked up slightly, to 3.6%.

But there were also some big employment gains in industries like leisure and hospitality, retail, and even construction, despite worries that the housing market is softening.

More than anything, the jobs report presents more confusing data to economists in an era where no one seems to really understand whether or not the U.S. economy is headed south—though many people seem to be salivating for bad economic data. Economists didn’t know what to make of it. “If you squint at the numbers, you might be able to see signs of a slowing labor market,” Lisa Sturtevant, chief economist of Bright MLS, a real estate listing service, wrote in commentary. “February’s job gains beat expectations again in another display of resiliency for this labor market,” another analyst, Cody Harker, head of data and insights from Bayard Advertising, commented.

The average American can take comfort in knowing that despite some gloomy economic predictions, the job market is still strong. Unemployed workers should have no trouble finding a new job.

But this jobs report also means that the Federal Reserve will likely continue to quickly raise interest rates, which is not happy news for any consumer who is trying to borrow money soon. The Fed’s Open Market Committee will release its next decision on interest rates on March 22. Testifying before Congress on March 7, Fed chair Jerome Powell said that the strength of recent economic data “suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.”

What that means for the next few weeks is more business leaders and economists trying to read the tea leaves for any signs of a recession, and arguing the case that the economy is slowing down. Economists keep thinking up reasons why this strong data is a fluke—unseasonably warm weather led to unusual consumer spending in January, all these job gains are just replenishing industries that experienced big cuts during the pandemic, CEOs are pessimistic so hiring can’t continue.

“People want some reassurance that inflation will come down—and some people, especially those who have been around for a while, think that a recession is the only way to permanently reduce those inflation expectations,” says Daniel Altman, chief economist for Instawork, a flexible staffing company.

Already, forecasting groups like the Conference Board, which tracks economic indicators, predict that high inflation and slowing consumer spending will “tip the economy into recession in 2023.” The data don’t show any sign of that yet. But an economic forecaster can continue to hope.

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Image:design by Germán & Co, licensed through Shutterstock

Janet Yellen Says Government Won't Bail Out Silicon Valley Bank

Treasury Secretary rules out politically sensitive scenario of bailing out California bank with taxpayers' money.

THESTREET by LUC OLINGA

The message is clear: the government is not going to bail out Silicon Valley Bank, despite several calls from influential voices in the financial and business communities.

The message was delivered by Treasury Secretary Janet Yellen during an interview with CBS's "Face the Nation" on March 12. Yellen said regulators were working all weekend "to address the situation in a timely way” in order to avoid the panic some fear in global markets if no resolution is found. 

She however added that a bail out was not an option being considered.

"Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out," Yellen told CBS’ s "Face the Nation." "And we're certainly not looking - and the reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and we're focused on trying to meet their needs.”

SVB’s failure on March 10, which was the second-largest of a bank in U.S. history, has shaken many investors. It was the result of a bank run, caused by the bank’s announcement that it planned to raise $2.25 billion by issuing new common and convertible preferred shares to shore up its finances, after it sold bonds in its portfolio of investments at a $1.8 billion loss.

'Wide Range of Available Options'

About $42 billion of deposits were withdrawn by the end of March 9, according to a regulatory filing. By the close of business that day, SVB had a negative cash balance of $958 million.

The Federal Deposit Insurance Corporation took control and is now the manager of $175 billion in customer deposits, including money from several startups and from some of the biggest names in the technology world.

The regulator also created a new entity, and indicated that unsecured depositors, that is, SVB customers with more than $250,000 in their accounts, will not, for the moment, have access to their money. 

This leaves many uncertainties about the ability of many startups to operate in the coming weeks, since their funds are locked up. The FDIC said it will pay uninsured depositors an "advance dividend within the next week."

The question is how much this "advanced dividend" will amount to. 

Companies with SVB accounts, lines of credit and credit facilities are wondering what this means for them, when they can access their funds, if they will be able to get all their funds out, and whether they will have access to their credit lines. More than 95% of the bank's deposits were uninsured as of December, according to regulatory filings.

As a result, many influential voices on Wall Street and in Silicon Valley worry that the may not enough and are calling on the government to bail out the bank that played such a huge role in the startup and small business ecosystem in the Bay Area.

"I simply want to say that we're very aware of the problems that depositors will have," Yellen said. "Many of them are small businesses that employ people across the country and of course this is a significant concern and working with regulators to try to address these concerns."

Asked whether regulators might be open to a "foreign bank" buying SVB, Yellen responded, "I'm sure they're considering a wide range of available options that include acquisitions."

"This is really a decision for the FDIC, as it decides on what the best course is to resolve this firm,” Treasury Secretary said.

'Corporate Bailouts Must End'

One of the solutions that the FDIC and the Federal Reserve are working on, is the creation of a fund that would allow regulators to backstop more deposits at banks that run into trouble, following the collapse of SVB, reports Bloomberg News.

Many politicians have already sent the message that taxpayer money should not be used to bail out SVB.

"Taxpayers should absolutely not bail out Silicon Valley Bank," Republican presidential candidate Nikki Haley said on Twitter. "Private investors can purchase the bank and its assets. It is not the responsibility of the American taxpayer to step in. The era of big government and corporate bailouts must end."

"If there is an effort to use taxpayer money to bail out Silicon Valley Bank, the American people can count on the fact that I will be there leading the fight against it," Rep. Matt Gaetz (R-Fla) tweeted on Mar. 10.

The challenge for the FDIC and the Fed is that any guarantee of the borrowers’ funds might be perceived as a bailout, with taxpayer money being used to protect clients, drawing similarities to the government intervention in the 2008 financial crisis.

"What I'll say about the banking system overall is it's more resilient, and has a better foundation than before the financial crisis. That’s largely due to reforms put in place after the financial crisis. Our Treasury secretary is at the helm and working diligently with regulators," Shalanda Young, director of the White House Office of Management and Budget, said on CNN’s "State of the Union."

Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Germán & Co

Silicon Valley bank collapses and spreads to Europe: what happened and what are the risks?

The American institution faced liquidity problems, sold bonds at a loss and caused stock market falls across the financial sector. The US regulator yesterday intervened in its assets and will lead the process of selling the firm. The bank warns of the impact of the economic slowdown on SMEs: "Their environment will be more stressed". Silicon Valley Bank, in the United States, is an entity that mainly finances the technology sector. Silicon Valley Bank, in the United States, is an entity that mainly finances the technology sector ABC

ABC.ES BY DANIEL CABALLERO, MADRID, SPAIN, TODAY

SVB is an American financial institution, specifically from California. It is not among the ten largest banks in the country; it is a local company with aspirations for the whole world. But those aspirations have been dashed by the collapse it has experienced over the past two days. The effect on the rest of the sector has not been long in coming and the world's largest banks have suffered big falls on the stock market at the end of the week.

SVB stands for Silicon Valley Bank. The bank of Silicon Valley, the cradle of American entrepreneurship and innovation. This firm is one of the major financiers of startups and entrepreneurs looking for an opportunity.

The interest on new operations has more than doubled in just one year due to the ECB's rate hikes

It was destined to achieve huge returns with this business but the world of technology is not what it used to be and the problems of this sector have swallowed up the SVB. The bank has been suffering from a massive flight of customer deposits for three days, draining it of liquidity and forcing it to take drastic internal decisions to try to stay afloat. It announced the sale of a $21 billion portfolio of US Treasury bonds to raise funds, but had to do so at a loss because their value had collapsed due to the rise in interest rates. For this reason, it said it expects to record a loss of $1.8 billion in the first quarter.

Thus, he moved the hole from liquidity... to capital, solvency itself. And it announced a 2.25 billion share sale round to raise funds. That round failed and, according to CNBC, its managers have opted to sell what remains of SVB. It will be difficult to quantify the value of the bank, with its liquidity problems - the flight of deposits continues -, capital and a 60% fall on the stock market on Thursday; in fact, it had to be suspended from trading yesterday because in the 'premarket' (prior to the stock market opening) another fall of almost 70% was already anticipated.

However, such a private sale will no longer be possible. The Federal Deposit Insurance Corporation (similar to the Spanish deposit guarantee fund) intervened yesterday afternoon and took control of Silicon Valley Bank. The US regulator, in a statement, said that "all insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023". In this regard, the institution also reported that, as of 31 December 2022, "Silicon Valley Bank had approximately $209 billion in total assets and approximately $175.4 billion in total deposits".

Contagion effect

American and European banks have not been able to avoid the contagion effect on their stock market valuations. JP Morgan, Wells Fargo and Bank of America, three of the world's giants, lost more than 5% on Thursday. In the Old Continent, Banco Santander fell by more than 4% yesterday, as did Deutsche Bank, which fell by more than 7%, and BNP Paribas, which fell by nearly 4%.

The most internationalised institutions with the greatest exposure to public debt were among those that suffered most from the collapse of SVB. But... But what is behind the fact that a local bank dragged down the entire global banking sector?

The issue, beyond the collapse of a relatively small financial institution, is whether there may be further liquidity problems in other US institutions, and especially the negative effect of central bank interest rate hikes.

This is how much SVB's stock market fell on Thursday after the full extent of its crisis became known.

Central to all this is SVB's sale of 21 billion in US Treasury bonds. These were AFS bonds, which are 'available for sale'. When it sold these assets because it needed liquidity, it did so at a loss.

Financial sources point out that what is important here is to know whether the latent losses on sovereign bonds that financial institutions accumulate on their balance sheets could be a problem. And they speak of latent losses - which are adjusted against capital - in all cases arising from the rise in the Fed and ECB's benchmark interest rates; if the price of money rises, the value of the bonds you hold in your portfolio at a lower interest rate falls sharply. Therefore, if you need to sell those bonds, you will do so at a big loss.

Nevertheless, the banking sector believes that there is no reason to panic. They explain that this is a specific situation of the SVB and that the markets have overreacted with stock market crashes against the sector as a whole. But they do warn that some institutions are more exposed to sovereign risk than others.

"All the uncertainty linked to the sector is translating into falls in the European banking sector, especially Italian and Spanish banks, which we see as unjustified. We believe that the market's reading is based on an overreaction to sovereign bond exposure which is not the problem. Moreover, the liquidity of European banks is very high," the banking sector says.

For the moment, the situation is relatively calm in European banks, according to the sources consulted, while waiting to find out how far the SVB crisis may spread. They refer rather to whether other medium-sized institutions could find themselves in liquidity problems of this nature, and materialising latent losses due to rate rises. Even so, they argue that the health of European banks is significantly better than that of US banks in terms of liquidity and solvency.

SVB's fall shows the negative side of rate hikes in banking due to the latent losses accumulated in the portfolio.

Guy de Blonay, investment manager for financial equities at Jupiter AM, adds: "Silicon Valley Bank has a less diversified balance sheet structure than many large global banks and is more exposed to deposit outflows due to a very specific type of client: technology entrepreneurs. We believe that the risk of a large deposit outflow and the resulting bond and equity divestments is low for diversified European banks".

"Still, this development draws attention to changing monetary policy and its potential impact on banks. Rising rates and quantitative tightening that remove liquidity from the financial system may put pressure on asset values and deposits, altering balance sheet structures and affecting net interest income, especially in the US," the Jupiter AM manager continues.

Set of elements

"Given that client money outflows are also likely to be driven by higher interest rates, it is no exaggeration to say that this episode is emblematic of the regime of higher rates for longer that we seem to be in at the start, as well as inverted curves, and a technology industry that has been experiencing much tougher times of late. The perfect storm of all the things we have been worrying about in this cycle," says Jim Reid, strategist at Deutsche Bank, in his daily report.

JP Morgan's research department, meanwhile, has expressed surprise that SVB, for example, has undertaken a bond sale to increase the bank's liquidity so dramatically. In their view, they believe that this is more of a message that its strategy is one of liquidity prudence, given an uncertain outlook in which there could be further adjustments in liquidity needs due to outflows of customer deposits. JP Morgan also acknowledges that it was taken by surprise by the bank's drastic move. "We fully recognise that we did not see these aggressive actions to increase liquidity coming," it said in a report.

Related to this, JP Morgan issues a warning signal: "Given that the company has been quiet since the deal was announced, we are uncertain what caused the company to move to sell virtually its entire AFS bond portfolio before fully exhausting other options.

In this case, the latter firm points out that, in the face of rising interest rates, "banks' bond portfolios have seen an increasing reduction in value, with a growing balance of 'unrealised (latent) losses'" being booked against capital. Adds the investment bank, which is in fact a shareholder in SVB: "This has become a key focus for investors with the message from bank management teams being largely 'not to worry' about these unrealised losses given the multitude of alternative funding options available to banks.

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Image: Germán & Co

Biden administration to approve major oil project in Alaska -source

The Willow project, led by energy giant ConocoPhillips (COP.N), would be located inside the National Petroleum Reserve-Alaska, a 23 million-acre (93 million-hectare) area on the state's North Slope that is the largest tract of undisturbed public land in the United States.

Reuters By Nichola Groom and Maria Caspani

March 12 (Reuters) - U.S. President Joe Biden's administration will approve a major and controversial oil drilling project in Alaska on Monday, according to a source familiar with the matter.

The decision to move ahead with the project by authorizing three drill sites in northwestern Alaska would come a day after Biden announced sweeping curbs on oil and gas leasing to protect up to 16 million acres of water and land in the region.

The Willow project, led by energy giant ConocoPhillips (COP.N), would be located inside the National Petroleum Reserve-Alaska, a 23 million-acre (93 million-hectare) area on the state's North Slope that is the largest tract of undisturbed public land in the United States.

The project, announced in January 2017, is expected to produce about 600 million barrels of oil equivalent over its life, peaking at 180,000 barrels of oil per day, ConocoPhillips says on its website.

Earlier on Sunday, the U.S. Interior Department unveiled actions to make nearly 3 million acres of the Beaufort Sea in the Arctic Ocean "indefinitely off limits" for oil and gas leasing, building on an Obama-era ban and effectively closing off U.S. Arctic waters to oil exploration.

In addition to the drilling ban, the government will put forward new protections for more than 13 million acres of "ecologically senitive" Special Areas within Alaska's petroleum reserve, the administration said in a statement on Sunday.

The area includes the Teshekpuk Lake, Utukok Uplands, Colville River, Kasegaluk Lagoon and Peard Bay Special Areas.

The new moves come as Biden tries to balance his goals of decarbonizing the U.S. economy and preserving pristine wilderness with calls to increase domestic fuel supply to keep prices low.

Willow has support from the oil and gas industry and state officials eager for jobs, but is fiercely opposed by environmental groups who want to move rapidly away from fossil fuels to combat climate change.

An environmental group said the new protections announced on Sunday did not go far enough and the government should stop oil and gas developments to help fight climate change.

"Protecting one area of the Arctic so you can destroy another doesn't make sense, and it won't help the people and wildlife who will be upended by the Willow project," said Kristen Monsell, a senior attorney at the Center for Biological Diversity.

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Cooperate with objective and ethical thinking…

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Image: Germán & Co

Britain's tax take risks blowing green energy off target

The British government has set targets for major increases in wind generation, for instance, as it seeks to meet a goal of net zero emissions by 2050 and to become more independent of imported energy following the supply disruption caused by Russia’s invasion of Ukraine.

Reuters By Susanna Twidale and Shadia Nasralla

LONDON, March 13 (Reuters) - A cap on revenue and the lack of the kind of incentives offered to oil explorers are blocking the development of renewable energy in Britain, say industry officials who are pressing for changes ahead of this week's budget.

The British government has set targets for major increases in wind generation, for instance, as it seeks to meet a goal of net zero emissions by 2050 and to become more independent of imported energy following the supply disruption caused by Russia’s invasion of Ukraine.

Representatives of the renewable energy sector say those goals could be missed without policy changes, especially as other countries are doing more to attract investment in green power.

Among the most contentious issues is Britain's Electricity Generator Levy (EGL), which the government implemented from the start of this year to combat high energy prices, and which the industry says is a "de facto windfall tax".

Rod Wood, managing director at wind energy developer Community Wind Power, is among those seeking changes to the EGL in Britain's March 15 budget.

“The taxation (EGL) is going to kibosh renewable targets the UK has set,” he said.

Specifically, he wants it to include an investment allowance like the one oil and gas companies receive under their equivalent Energy Profits Levy (EPL).

The EPL includes an investment incentive that means oil and gas firms can offset from their tax bill 91.40 pounds in every 100 pounds spent on new production.

British government targets include increasing offshore wind capacity to 50 gigawatts (GW) from around 14 GW now.

Wood said without tax changes, his company would be forced to halt development of three onshore Scottish projects, totalling 1.2 GW, which by 2025 could be generating enough power for more than a million homes.

“When you look at how much costs have gone up in the UK versus stimulus packages on offer in the U.S., it's not hard to see anyone who can will be relocating business there,” he said.

U.S. President Joe Biden's administration last year signed into law the Inflation Reduction Act, which delivers a support package for clean technology worth $370 billion.

INFLATION, SUPPLY CHAINS, INTEREST RATES

Other developers say the combination of levies, high energy prices, supply chain bottlenecks, inflation and interest rate rises means their projects are under threat.

Denmark's Orsted last week said its Hornsea 3 project in the North Sea, which at around 3 GW would be the world's largest windfarm when built, could be paused unless it gets support such as tax breaks because costs have surged.

Another major project is the Vattenfall group's Norfolk Offshore Wind Zone.

Rob Anderson, its project director, said the British government "must show its support for the sector in next week’s budget through capital allowances”.

Under the EGL, a 45% tax on low-carbon power generators applies to revenue on power generation at an aggregate price above 75 pounds ($89) per megawatt hour (MWh).

With wholesale electricity prices around 120 pounds/MWh, the level at which the tax kicks in is too low, Wood said, citing more generous levies in Europe.

The European Commission has set a revenue cap on electricity companies, requiring them to hand over any excess revenue to national governments they get for selling their non-gas generated power over 180 euros ($190)/MWh.

OIL AND GAS SECTOR UNHAPPY TOO

Oil and gas producers, which have been subject to a windfall tax since May 2022, also want change.

They say the Energy Profit Levy (EPL) windfall tax which last year raised the tax rate to 75%, one of the world's highest, is shrinking producers' access to funding.

Reuters Graphics 

Renewable developers say the oil and gas sector has for years enjoyed tax breaks, while green groups say the sector should no longer be given any incentives given the need to phase out fossil fuel.

The British fossil fuel industry says it is still necessary to invest in the ageing North Sea basin and home-grown fuel is far less polluting than importing oil and gas from distant places where supply might be more easily disrupted.

It also says higher tax rates should kick in only when profits are derived from prices above a yet-to-be-agreed price floor, based on an historic average, rather than the entire profit regardless of price as is currently the case.

The industry also wants the tax to apply to realised prices, which include hedging results, rather than broader market prices.

Many oil and gas producers hedge large chunks of their output to comply with lenders' demands, which means their exposure to market price changes is limited.

Finance Minister Jeremy Hunt, in a meeting in December, rebuffed calls from the oil and gas industry to amend the windfall tax.

Further meetings, including in late February with Treasury officials have taken place, but no change was expected from the March 15 budget, two industry sources said, declining to be named.

Meanwhile, Britain's biggest oil and gas producer Harbour , has announced job cuts and shunned the latest licensing round. TotalEnergies (TTEF.PA) cut its UK investment programme by a quarter.

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The ironic side effects of the rapid global energy transition…

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Image: Germán & Co

Regulations that force battery makers to use a minimal amount of recycled material are being considered, especially in countries keen to accelerate their energy transition and develop exportable expertise in the decarbonization space.

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Reuters by Gavin Maguire

LITTLETON, Colorado, March 9 (Reuters) - There's a consensus among some climate advocates that catastrophic global environmental damage can only be avoided by a rapid and comprehensive retooling of the world's energy system and tough caps on emissions for industry.

That view is shared by growing numbers of civilians, businesses and governments as worsening droughts, floods, wildfires and heat waves shore up backing for urgent action to slash pollution and reduce reliance on fossil fuels.

This chorus of support for the energy transition has ignited an almost frantic renewable energy development spree across the world, with green energy generation capacity growing at a record pace in every major economy.

For all the good intentions, though, the great green energy revolution has had its share of growing pains, including some rather surprising unintended consequences that in some cases may have caused more environmental harm than good.

CLEANER AIR, BUT WARMER SEAS

One example of a surprising side effect of emissions-cutting policy has been the surge in northern hemisphere water temperatures since strict new pollution regulations came into effect three years ago.

On January 1st, 2020, the International Maritime Organisation (IMO) implemented ship emissions standards that slashed the maximum level of sulfur allowed in shipping fuels.

Known as IMO2020, the new rules were aimed at reducing air pollution spewing from the global shipping fleet, with an IMO study claiming that 570,000 premature deaths would be prevented globally between 2020 and 2025 by the cleaner-burning fuel.

The resulting sharp drop in sulphate particles in the atmosphere, however, caused a surge in solar radiation absorbed by the oceans along the world's busiest shipping routes, according to a study by climate researcher Leon Simons.

IMO 2020 impact on sulphur dioxide levels and solar absorbtion levels of oceans

According to Simons, a board member of the Club of Rome - a nonprofit group of intellectuals and business leaders that discusses major global issues - the previously higher levels of sulfur particles had helped reflect some solar radiation. As sulfur levels dropped more radiation was absorbed.

That helped to raise ocean temperatures, with sea surfaces in the northern hemisphere in 2022 averaging 1 degree Celsius (1.8 degrees Fahrenheit) higher than the average from 1979-2000.

"If this trend continues that could mean that the Northern Hemisphere mid latitudes (where many of us live) will warm much more rapidly," Simons said in a recent Twitter post.

GREEN POWER WASTE

Another ironic side effect of the rush into renewable energy has been the build up in components that have reached the end of their useful life but are hard to recycle.

An obvious example is wind turbine blades, which have a design life of roughly 20 years before they need to be replaced due to worn parts or because they are far less efficient than newer blades.

As each blade can stretch more than 100 feet (30.5 m) and weigh over 2 tonnes, the upgrading of entire wind farms can cause headaches for developers, who sometimes resort to burying old blades in landfills.

Some firms are developing blade recycling capabilities, such as Carbon Rivers, LM Wind Power and Veolia (.VIA.PA), but tend to steer clear of the earliest generation of wind blades, which were made from hard-to-process composite materials.

Old solar panels face a similar predicament, especially ones that lack the efficiency of newer models and in the eyes of resellers are not worth collecting from old sites and homes.

Again, there are a growing number of firms that do recycle old panels, but, like wind blade recyclers, they can struggle to economically procure enough stock of discarded components to make operations profitable. They can also face volatile market prices for the recycled and reclaimed materials they do manage to gather.

In contrast, old electric vehicle (EV) batteries are in high demand by firms that produce new batteries, as many of the key ingredients contained in them can be processed and used again.

The problem here is that the lack of conformity in battery shapes, sizes and configurations has made it hard to automate the reclamation process, which can be laborious and expensive to do manually.

That means the cost of materials collected from recycled EV batteries can be far higher than freshly mined or processed alternatives, which can lead battery producers to favor the continued use of new ingredients even though the supply of recycled battery materials is steadily mounting.

Regulations that force battery makers to use a minimal amount of recycled material are being considered, especially in countries keen to accelerate their energy transition and develop exportable expertise in the decarbonization space.

However, as manufacturers need to be competitive against international peers, policymakers that want to intervene must be wary of creating any further unintended and potentially damaging consequences.

News round-up, March 10, 2023

Quote of the day… 

"The amount of renewables that we're going to have to build over the next decade is enormous, and I don't think everybody has really digested the scope of that," said Andres Gluski, CEO of energy and utility giant AES Corp.

REUTERS (CERAWEEK)

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Most read…

Europe's lenders sucked into global banks rout

The global rout in bank stocks was prompted by Silicon Valley Bank, a major banking partner for the U.S. tech sector, being forced to raise fresh capital after losing $1.8 billion selling a package of bonds to meet depositor demands for cash.

REUTERS 

Why Russia Has Such a Strong Grip on Europe’s Nuclear Power

New energy sources to replace oil and natural gas have been easier to find than kicking the dependency on Rosatom, the state-owned nuclear superstore.

NYT by Patricia Cohen, March 10, 2023.

Prosecutors Signal Criminal Charges for Trump Are Likely

The former president was told that he could appear before a Manhattan grand jury next week if he wishes to testify, a strong indication that an indictment could soon follow.

NYT by William K. Rashbaum, Ben Protess and Jonah E. Bromwich, March 9, 2023

IAEA chief makes plea for Zaporizhzhia safe zone after outage

"Each time we are rolling a dice. And if we allow this to continue time after time then one day our luck will run out," Grossi told the IAEA's 35-nation Board of Governors.

Reuters by Francois Murphy 

Fears Grow of New Cold War Between U.S. and China

China and the United States are lurching from one crisis to the next. It's not just deep economic interdependence that is at stake, but also global peace. Is there still a way out of this downward spiral?

Spiegel by Ann-Dorit Boy, Georg Fahrion, Christoph Giesen, Christina Hebel and Bernhard Zand, 09.03.2023

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“We’re living in a volatile world…

it’s easy to get distracted by things like changeable commodity prices or a shortage of solar panels. But this wouldn’t be true to our purpose – we can’t allow ourselves to lose sight of our end goal; said Andres Gluski, CEO of energy and utility AES Corp

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Image:  A trader sits in front of the computer screens at his desk at the Frankfurt stock exchange, Germany, June 29, 2015. . REUTERS/Ralph Orlowski

Europe's lenders sucked into global banks rout

REUTERS by Alun John editing by Germán & Co

LONDON/FRANKFURT, March 10 (Reuters) - A dramatic sell-off in U.S. bank stocks spilled over into Europe on Friday, as some of the region's biggest banks saw their shares tumble in their largest decline in nine months.

Europe's STOXX banking index (.SX7P) fell more than 4% and was set for its biggest one-day slide since early June, with declines for most major lenders, including HSBC (HSBA.L), down 4.5%, and Deutsche Bank (DBKGn.DE), down 7.9%.

Shares in Italy's UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI) also fell sharply.

The global rout in bank stocks was prompted by Silicon Valley Bank, a major banking partner for the U.S. tech sector, being forced to raise fresh capital after losing $1.8 billion selling a package of bonds to meet depositor demands for cash.

Neil Wilson, Chief Market Analyst at Markets.com, said that the episode could be the "straw that breaks the camel's back" for banks after worries about ever higher interest rates and a fragile U.S. economy.

The episode underscored the vulnerability of banks, many of which were propped up by taxpayers' cash following the global financial crisis more than a decade ago. That crash and the economic fallout from the pandemic led central banks and governments to print trillions to support the economy but they are now seeking to rein that in.

Investors in SVB's stock had fretted over whether the capital raise would be sufficient given the deteriorating fortunes of many technology startups that the bank serves.

SVB's CEO Gregory Becker had been calling clients to assure them their money with the bank is safe, according to two people familiar with the matter.

But some startups have been advising their founders to pull out their money from SVB as a precautionary measure, the sources added.

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Image: UAE, Dubai - November 28, 2021: exposition in Russian pavilion at World Expo 2020, Germán & Co by Shutterstock

Why Russia Has Such a Strong Grip on Europe’s Nuclear Power

New energy sources to replace oil and natural gas have been easier to find than kicking the dependency on Rosatom, the state-owned nuclear superstore.

NYT by Patricia Cohen, March 10, 2023.

Europe moved with startling speed to wean itself off Russian oil and natural gas in the wake of war in Ukraine. But breaking the longstanding dependency on Russia’s vast nuclear industry is a much more complicated undertaking.

Russia, through its mammoth state-owned nuclear power company, Rosatom, dominates the global nuclear supply chain. It was Europe’s third-largest supplier of uranium in 2021, accounting for 20 percent of the total. With few ready alternatives, there has been scant support for sanctions against Rosatom — despite urging from the Ukrainian government in Kyiv.

For countries with Russian-made reactors, reliance runs deep. In five European Union countries, every reactor — 18 in total — were built by Russia. In addition, two more are scheduled to start operating soon in Slovakia, and two are under construction in Hungary, cementing partnerships with Rosatom far into the future.

For years, the operators of these nuclear power plants had little choice. Rosatom, through its subsidiary TVEL, was virtually the only producer of the fabricated fuel assemblies — the last step in the process of turning uranium into the nuclear fuel rods — that power the reactors.

Since the invasion of Ukraine in February 2022, some European countries have started to step away from Russia’s nuclear energy superstore.

The Czech Republic’s energy company, CEZ, has signed contracts with Pennsylvania-based Westinghouse Electric Company and the French company Framatome to supply fuel assemblies for its plant in Temelin.

Finland canceled a troubled project with Rosatom to build a nuclear reactor and hired Westinghouse to design, license and supply a new fuel type for its plant in Loviisa after its current contracts expire.

“The purpose is to diversify the supply chain,” said Simon-Erik Ollus, an executive vice president at Fortum, a Finnish energy company.

Bulgaria signed a new 10-year agreement with Westinghouse to provide fuel for its existing reactors. And last week, it moved ahead with plans for the American company to build new nuclear reactor units. Poland is about to construct its first nuclear power plant, which will feature three Westinghouse reactors.

Slovakia and even Hungary, Russia’s closest ally in the European Union, have also reached out to alternative fuel suppliers.

“We see a lot of genuine movement,” said Tarik Choho, president of nuclear fuel unit at Westinghouse, adding that the Ukraine war accelerated Europe's search for new suppliers. “Even Hungary wants to diversify.”

William Freebairn, senior managing editor for nuclear energy at S&P Commodity Insights, said Russia’s march into Ukraine last year in some ways marked “a sea change.”

“Within days of the invasion,” he said, “just about every country that operated a Russian reactor started looking for alternate supply.”

In Ukraine, serious efforts to chip away at Russian nuclear dominance began in 2014 after President Vladimir V. Putin of Russia sent troops to occupy territory in Crimea and the eastern Donbas region. Ukraine, whose 15 Soviet-era reactors provided half the country’s electricity, signed a deal with Westinghouse to expand its fuel contract.

It took roughly five years between the start of the design process and the final delivery of the first fuel assembly, according to the International Energy Association.

Ukraine “blazed a commercial trail,” Mr. Freebairn said. In June, Ukraine signed another contract with Westinghouse to eventually provide all its nuclear fuel. The company will also build nine power plants and establish an engineering center in the country.

Still, a worldwide turn away from Russia’s nuclear industry would be a slog: The nuclear supply chain is exceptionally complex. Establishing a new one would be expensive and take years.

At the same time, Rosatom has proved uniquely successful as both a business enterprise and a vehicle for Russian political influence. Much of its ascendancy is due to what experts have labeled a “one-stop nuclear shop” that can provide countries with an all-inclusive package: materials, training, support, maintenance, disposal of nuclear waste, decommissioning and, perhaps most important, financing on favorable terms.

And with a life span of 20 to 40 years, deals to build nuclear reactors compel a long-term marriage.

Russia’s tightest grip is on the market for nuclear fuel. It controls 38 percent of the world’s uranium conversion and 46 percent of the uranium enrichment capacity — essential steps in producing usable fuel.

“That’s equal to all of OPEC put together in terms of market share and power,” said Paul Dabbar, a visiting fellow at the Center on Global Energy Policy at Columbia University, referring to the oil dominance of the Organization of the Petroleum Exporting Countries.

As with oil and natural gas, the cost of nuclear fuel supplies has risen over the past year, putting more than $1 billion from exports into Russia’s treasury, according to a report from the Royal United Services Institute, a security research organization in London.

The American nuclear power industry gets up to 20 percent of its enriched uranium from Russia, the maximum allowed by a recent nonproliferation treaty, according to the International Energy Association. France imports 15 percent. Framatome, which is owned by state-backed nuclear power operator, Électricité de France, or EDF, signed a cooperation agreement with Rosatom in December 2021, two months before Russia’s invasion, that is still in effect. Framatome declined to comment.

And even with the slate of new fuel agreements in Europe with non-Russian sources, deliveries won’t begin for at least a year, and in some cases several years.

Around a quarter of the European Union’s electricity supply comes from nuclear power. With pending climate disaster prompting a worldwide push to decrease the overall use of fossil fuels, nuclear energy’s role in the future fuel mix is expected to increase.

Still, analysts argue that even without formal sanctions, Russia’s position as a nuclear supplier has been permanently compromised.

At the height of the debate in Germany last year over whether to keep its two remaining nuclear power plants online because of the war, their reliance on uranium enriched by Russia for the fuel rods emerged as one of the arguments against extending their lives. The last two reactors are to be shut down next month.

And when Poland’s Council of Ministers approved the agreement in November for Westinghouse to build the country’s first nuclear power plant, the resolution cited “the need for permanent independence from energy supplies and energy carriers from Russia.”

Mr. Choho at Westinghouse was confident about the company’s ability to compete with Rosatom in Europe, estimating that it eventually could capture 50 to 75 percent of that nuclear market. Westinghouse has also signed an agreement with the Spanish energy company Enusa to cooperate on fabricating fuel for Russian-made reactors.

But outside the European Union and United States, in countries where support for Russia’s government has held up, Rosatom’s one-stop shopping and financing remain enticing. Russian-built reactors can be found in China, India and Iran as well as Armenia and Belarus. Construction has begun on Turkey’s first nuclear power plant, and Rosatom has a memorandum of understanding with 13 countries, according to the International Energy Association.

As a new report in the journal Nature Energy concluded, while the war “will undermine Rosatom’s position in Europe and damage its reputation as a reliable supplier,” its global standing “may remain strong.”

Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Germán & Co by Shutterstock

Prosecutors Signal Criminal Charges for Trump Are Likely

The former president was told that he could appear before a Manhattan grand jury next week if he wishes to testify, a strong indication that an indictment could soon follow.

NYT by William K. Rashbaum, Ben Protess and Jonah E. Bromwich, March 9, 2023

The Manhattan district attorney’s office recently signaled to Donald J. Trump’s lawyers that he could face criminal charges for his role in the payment of hush money to a porn star, the strongest indication yet that prosecutors are nearing an indictment of the former president, according to four people with knowledge of the matter.

The prosecutors offered Mr. Trump the chance to testify next week before the grand jury that has been hearing evidence in the potential case, the people said. Such offers almost always indicate an indictment is close; it would be unusual for the district attorney, Alvin L. Bragg, to notify a potential defendant without ultimately seeking charges against him.

In New York, potential defendants have the right to answer questions in the grand jury before they are indicted, but they rarely testify, and Mr. Trump is likely to decline the offer. His lawyers could also meet privately with the prosecutors in hopes of fending off criminal charges.

Any case would mark the first indictment of a former American president, and could upend the 2024 presidential race in which Mr. Trump remains a leading contender. It would also elevate Mr. Bragg to the national stage, though not without risk, and a conviction in the complex case is far from assured.

Mr. Trump has faced an array of criminal investigations and special counsel inquiries over the years but has never been charged with a crime, underscoring the gravity of Mr. Bragg’s inquiry.

Mr. Bragg could become the first prosecutor to charge Mr. Trump, but he might not be the last.

In Georgia, the Fulton County District Attorney is investigating whether Mr. Trump interfered in the 2020 election, and at the federal level, a special counsel is scrutinizing Mr. Trump’s effort to overturn the election results, as well as his handling of classified documents.

The Manhattan inquiry, which has spanned nearly five years, centers on a $130,000 payment to the porn star, Stormy Daniels, who said she had an affair with Mr. Trump. The payment was made in the final days of the 2016 presidential campaign by Michael Cohen, Mr. Trump’s former fixer, who was later reimbursed by Mr. Trump from the White House.

Mr. Cohen, who has long said that Mr. Trump directed him to pay Ms. Daniels to keep her quiet, is expected to testify in front of the grand jury, but has not yet done so.

The district attorney’s office has already questioned at least six other people before the grand jury, according to several other people with knowledge of the inquiry.

Mr. Bragg’s prosecutors have not finished the grand jury presentation and he could still decide against seeking an indictment.

Mr. Trump has previously said that the prosecutors are engaged in a “witch hunt” against him that began before he became president, and has called Mr. Bragg, a Democrat who is Black, a politically motivated “racist.”

“The Manhattan District Attorney’s threat to indict President Trump is simply insane,” a spokesman for the former president said in a statement, adding: “It’s an embarrassment to the Democrat prosecutors, and it’s an embarrassment to New York City.”

A spokeswoman for the district attorney’s office declined to comment.

Mr. Trump, in a long and rambling statement posted on Truth Social said, “I did absolutely nothing wrong.” He again denied having had an affair with Ms. Daniels, and insulted her appearance. And he painted Mr. Bragg’s investigation as part of a broader conspiracy to bring him down, engineered by his political opponents and dating back to his presidency.

“Russia, Russia, Russia, Ukraine, Ukraine, Ukraine, the no-collusion Mueller hoax,” Mr. Trump wrote, an apparent reference to investigations into his campaign and presidency. He and his supporters, he wrote, were “victims of this corrupt, depraved, and weaponized justice system” and accused President Biden and his son, without evidence, of “horrendous crimes.”

He alternated those explosive comments with hints of legal arguments that might be deployed if the case is brought, noting, for instance, that alleged crimes in a federal election might make it “a federal case” and referred to the deal with Ms. Daniels as “extortion.”

Even if Mr. Trump is indicted, convicting him or sending him to prison will be challenging. The case against the former president hinges on an untested and therefore risky legal theory involving a complex interplay of laws, all amounting to a low-level felony. If Mr. Trump were ultimately convicted, he would face a maximum sentence of four years, though prison time would not be mandatory.

Mr. Trump’s lawyers are also sure to attack Mr. Cohen, who in 2018 pleaded guilty to federal charges related to the hush money.

The $130,000 payout came when Ms. Daniels’s representatives contacted the National Enquirer to offer exclusive rights to her story about an affair with Mr. Trump. David Pecker, the tabloid’s publisher and a longtime ally of Mr. Trump, had agreed to look out for potentially damaging stories about him during the 2016 campaign, and at one point even agreed to buy the story of another woman’s affair with Mr. Trump and never publish it, a practice known as “catch and kill.”

But Mr. Pecker didn’t bite at Ms. Daniels’s story. Instead, he and the tabloid’s top editor, Dylan Howard, helped broker a separate deal between Mr. Cohen and Ms. Daniels’s lawyer. Mr. Trump later reimbursed Mr. Cohen through monthly checks.

In the federal case against Mr. Cohen, prosecutors said that Mr. Trump’s company “falsely accounted” for the monthly payments as legal expenses and that company records cited a retainer agreement with Mr. Cohen. Although Mr. Cohen was a lawyer, and became Mr. Trump’s personal attorney after he took office, there was no such retainer agreement and the reimbursement was unrelated to any legal services Mr. Cohen performed.

In New York, falsifying business records can amount to a crime, albeit a misdemeanor. To elevate the crime to a felony charge, Mr. Bragg’s prosecutors must show that Mr. Trump’s “intent to defraud” included an intent to commit or conceal a second crime.

In this case, that second crime could be a violation of New York State election law. While hush money is not inherently illegal, the prosecutors could argue that the $130,000 payout effectively became an improper donation to Mr. Trump’s campaign, under the theory that because the money silenced Ms. Daniels, it benefited his candidacy.

Combining the criminal charge with a violation of state election law would be a novel legal theory for any criminal case, let alone one against the former president, raising the possibility that a judge or appellate court could throw it out or reduce the felony charge to a misdemeanor.

This is not the first Manhattan grand jury to hear evidence about Mr. Trump. Before leaving office at the end of 2021, Mr. Bragg’s predecessor, Cyrus R. Vance Jr., had directed prosecutors to begin presenting evidence to an earlier grand jury. That potential case focused on the former president’s business practices, in particular whether he fraudulently inflated his net worth by billions of dollars in order to secure favorable terms on loans and other benefits.

But Mr. Bragg, soon after taking office last year, grew concerned about the strength of that case and halted the presentation, prompting two senior prosecutors leading the investigation to resign.

Still, the portion of the investigation concerned with Mr. Trump’s net worth is continuing, people with knowledge of the matter said.

Defendants rarely choose to testify before a grand jury and it is highly unlikely that Mr. Trump would do so. As a potential defendant, he would have to waive immunity, meaning that his testimony could be used against him if he were charged. Although he could have a lawyer present in the grand jury to advise him, the lawyer would be prohibited from speaking to the jurors, and there would be few limits on the questions prosecutors could ask the former president.

In recent years, Mr. Trump has been wary of answering questions under oath, given the legal intrigue swirling around him. When the New York attorney general deposed him last year in a civil case, Mr. Trump refused to provide any information, availing himself of his Fifth Amendment right to refuse to answer questions more than 400 times over the course of four hours. If he testifies about the hush money to this grand jury, he will not have that option.

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Image: International Atomic Energy Agency (IAEA) Director General Rafael Grossi addresses a news conference during an IAEA board of governors meeting in Vienna, Austria, March 6, 2023. REUTERS/Leonhard Foeger

IAEA chief makes plea for Zaporizhzhia safe zone after outage

"Each time we are rolling a dice. And if we allow this to continue time after time then one day our luck will run out," Grossi told the IAEA's 35-nation Board of Governors.

Reuters by Francois Murphy 

VIENNA, March 9 (Reuters) - U.N. nuclear watchdog chief Rafael Grossi on Thursday appealed for a protection zone around the Russian-held Zaporizhzhia nuclear power plant in Ukraine after another outage there, saying he was "astonished by the complacency" around the issue.

"Each time we are rolling a dice. And if we allow this to continue time after time then one day our luck will run out," Grossi told the IAEA's 35-nation Board of Governors.

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Europe's biggest nuclear power plant lost its last external power line early on Thursday after missile strikes across Ukraine overnight.

The plant is now down to emergency diesel generators, a last line of defence to keep cooling reactor fuel and prevent a potentially catastrophic meltdown.

International Atomic Energy Agency (IAEA) Director General Rafael Grossi addresses a news conference during an IAEA board of governors meeting in Vienna, Austria, March 6, 2023. REUTERS/Leonhard Foeger

As in previous attacks, Russia and Ukraine blamed each other. Grossi has been trying to get both sides to strike a deal in which they would pledge not to fire at or from the plant and heavy weapons would be removed, diplomats say.

"This is the sixth time – let me say it again sixth time, that ZNPP has lost all off-site power and has had to operate in this emergency mode," Grossi told the board's quarterly meeting, according to an IAEA statement.

"Let me remind you – this is the largest nuclear power station in Europe. What are we doing? How can we sit here in this room this morning and allow this to happen? This cannot go on. I am astonished by the complacency."

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Cooperate with objective and ethical thinking…

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Image: Spiegel

Fears Grow of New Cold War Between U.S. and China

China and the United States are lurching from one crisis to the next. It's not just deep economic interdependence that is at stake, but also global peace. Is there still a way out of this downward spiral?

Spiegel by Ann-Dorit Boy, Georg Fahrion, Christoph Giesen, Christina Hebel and Bernhard Zand, 09.03.2023

In a boxy, pink building in Beijing's diplomatic quarter, sandwiched between the Iranian and the Kazakh embassies, a security guard is standing outside the gate, freezing despite his winter coat. Zhanna Leshchynska's office is located in the building behind him, Ukraine's chargé d'affaires in Beijing. Two years ago, her boss died of a heart attack, and she has been running the diplomatic representation ever since. It's a herculean task: Her country is at war, but no one in China's capital seems much to care.

It takes exactly 27 minutes to walk around the Russian Embassy in Beijing. Several apartment buildings, office towers, a hospital, two sports fields and a park are part of the huge Russian enclave over which Moscow's ambassador in Beijing presides. Until recently, that man was Andrey Denisov. Born in 1952 in Kharkiv in what was then the Soviet Republic of Ukraine, he studied Sinology and later became a key figure in Russian-Chinese relations.

When it came to Ukraine, the apparatus in Beijing preferred to talk to Denisov, a Russian, than to Leshchynska, a Ukrainian.

"Ukraine is Russia's backyard, the Russians understand that best," European diplomats were told by officials at the Foreign Ministry. And that's the view they continue to hold today, a year after Russia's invasion of Ukraine.

Whereas the Ukrainian ambassador to Washington was invited to the Congressional Gallery to watch U.S. President Joe Biden's recent "State of the Union Address" and was celebrated by members of Congress, Leshchynska still has to explain in Beijing who actually attacked whom in this war. "Russia is an aggressive state," she says. "Ukraine is the victim." Time and again, she says, she has approached the Chinese Foreign Ministry and pointed out that "in order to take a neutral position, it is important to talk to both sides." Unfortunately, she says, there is still no sign that the Chinese side is willing to do so.

The completely contrasting treatment of the two diplomats in Beijing and Washington is demonstrative of the enormous tension that the Ukraine war has injected into the relationship between the two superpowers. It was far from an easy relationship even before the war, but Putin's invasion of Ukraine has resulted in a geopolitical constellation that many, like former Australian Prime Minister Kevin Rudd, have been warning about for years: a "new Cold War."

The term is controversial because the politically and economically fragmented world of the 21st century is different from that of the post-World War II bloc. The nuclear arms race between China and America has not yet reached dimensions that can been compared to the one between the U.S.S.R. and the U.S. in the 20th century. And in contrast to the Soviet Union, the U.S. continues to maintain brisk trade relations with China, whose central bank holds $867 billion worth of U.S. bonds.

Ideological Ossification

Since February 2002, though, three developments have unfolded that are quite reminiscent of the Cold War: First, Russia's war of aggression on Ukraine is increasingly perceived as a kind of proxy conflict of the kind fought last century. Not in Ukraine itself, where a nation is simply defending itself against an aggressor, but in Moscow and Beijing, where it is portrayed as a defense against a West that is "striving for hegemony," and also in Washington, where it is understood as part of a global struggle between democracies and autocracies. At a meeting of European Union officials in Strasbourg, France, some seemed to hold that opinion, as well. Speaking there, Germany's foreign minister – likely unintentionally – said: "We are fighting a war against Russia."

Second, since Russia's invasion of Ukraine, major powers have been doing what they can to line up partners and allies. Each side is rallying its "troops" – in debates and votes at the United Nations, with diplomatic missions conducted by individual politicians or through large-scale aid and economic programs. The countries that are being courted most heavily right now are those that were considered "non-aligned" during the Cold War and are now roughly grouped under the term "Global South," including India, Indonesia, Brazil and South Africa.

Third, the struggle has been accompanied by an ossification of ideologies – one that has been extreme in Russia, but also increasingly in Sino-American relations. The trajectory of the war has so far confirmed for Beijing and Washington the image that they had of each other: as that of an ideological adversary with whom understanding is almost no longer possible. This ideological component is much stronger today. Previously, the rivalry had been more in the realm of the power-political, the military and technology.

Chinese and Russian Interests Correspond

Whereas Moscow and Beijing were enemies for much of the Cold War, they are closer today than they have been since the founding years of the People's Republic. Like Stalin and Mao Zedong back then, Vladimir Putin and Xi Jinping today share their fundamental rejection of a U.S.-dominated world order – and even a deeply internalized anti-Americanism. From that perspective, Western support for Ukraine appears to be a U.S.-driven plan to expand its sphere of influence eastward. The West, Putin claimed in his February 21 address to the nation, is using Ukraine as a "battering ram against Russia" and a military "training ground." The U.S., Beijing's Foreign Ministry spokesperson seconded two days later, is the "No. 1 warmonger in the world."

It's thus not surprising that experts on Russian-Chinese relations have no illusions about the "peace plan" recently presented by Beijing. "Any random Foreign Ministry employee can put something like this together," says Russian China expert Alexander Gabuev of the Carnegie Endowment for International Peace. He says the paper ultimately confirms how closely aligned China's and Russia's interests actually are. Beijing isn't pushing Moscow to do anything it doesn't want to do anyway, he argues.

The fact is: China's "peace plan" isn't even a document that specifies which party should take which steps and when or how violations should be punished. It's a declaration of principles that reiterates China's anti-Western positions, goes easy on the aggressor Russia, calls for a cease-fire instead of a Russian troop withdrawal – and a lifting of all sanctions not enacted by the UN Security Council (where Russia, as a veto power, de facto makes such sanctions impossible).

"The fact that China has started talking about Ukraine is not bad."

Ukrainian President Volodymyr Zelenskyy

Ukrainian President Volodymyr Zelenskyy commented on the Chinese initiative as positively as possible for a document that neither condemns Russia's war of aggression nor outlines a concrete path to an agreement. "I believe that the fact that China has started talking about Ukraine is not bad," he said on the first anniversary of the start of the war. The question is what will follow those words. Chinese leader Xi has met his Russian counterpart Putin around 40 times in total, most recently in September. He has spoken just a single time with Zelenskyy on the phone. That was in 2021, the year before the war. Xi has never met Zelenskyy in person.

In the short term, Ukraine has three concerns for China, former Foreign Minister Pavlo told DER SPIEGEL: That it not provide Russia with military support; that it not provide Russia with technology that can also be used militarily; and third, he said, it must be clear to Moscow "that the use of weapons of mass destruction is out of the question."

Klimkin argues that China's "peace plan" isn't even primarily about Ukraine or Russia. "China is using this moment more to present itself as a decisive player on the world stage and to fundamentally challenge the Western international order."

China's "Global Security Initiative"

Three days before the Ukraine paper, Beijing unveiled a much more detailed document laying out its "Global Security Initiative." The plan, announced by Xi almost a year ago, is a political continuation of the Silk Road Initiative, Beijing's nearly global economic and development program.

The text, heavily infused with party jargon, nonetheless provides fairly clear information about China's security policy plans. Similar to the Ukraine paper, it argues against "unilateralism, bloc confrontation and hegemonism" and advocates guaranteeing security not by means of military alliances but through individual agreements. At the same time, the text identifies where the focus of Chinese foreign policy will lie in the future: in the countries of Southeast Asia, the Middle East, Latin America, the Caribbean and the Pacific island nations.

These are precisely the regions of the Global South where the U.S. and Europe have been trying to curry favor since the start of the Russian invasion. As German Chancellor Olaf Scholz's recent visit to Brazil demonstrated, this has only been partially successful. President Lula de Silva is reluctant to supply ammunition to Ukraine and has made reference to China's "peace plan." With 141 affirmative votes for the Ukraine resolution adopted on Thursday, the number of its supporters in the UN General Assembly remains very high. Russia gained only two, Mali and Nicaragua, in addition to its usual four allies (North Korea, Syria, Belarus and Eritrea).

Among the countries that abstained, and among those wary of going along with the sanctions imposed by the West, China has possible partners. Which isn't particularly surprising: Beijing has increased its diplomatic presence in almost all of these countries. For many of them, China is the largest trading partner – and many of them have also grown tired of an often arrogant West that fails to adhere to its own moral standards.

Beijing is even more adept at stirring up such sentiment at home. Political discourse in China had begun radicalizing even before the pandemic, but that process was accelerated by the country's post-2020 self-isolation. The perception of many Chinese is that the West, America especially, has become a caricature of itself: power-hungry, self-serving and focused exclusively on keeping China down. This radicalization can be observed not only in the state media and on the internet, but also in top diplomacy. China, the deputy foreign minister recently tweeted, "never engages in slaughter, predation or racial genocide of its ethnic minorities" like the U.S.

Though the conditions are quite a bit different, this shift in China is echoed by the debate in the U.S., where moderate voices have all but vanished. Each new event becomes a "China crisis," whether it's the intrusion of a Chinese spy balloon, the banning of the social network TikTok on government mobile phones or the debate about the origins of the coronavirus. Did the virus originate in a Chinese lab, as two American studies suggest? In any case, the chairman of a newly formed committee in the House of Representatives dedicated to countering China says that America is facing an "existential struggle." China has become an issue where politicians can score points domestically.

The Next Crises Are Looming

The "perception gap" has become so significant "that the two sides appear to genuinely no longer be able to understand each other," writes Zhao Tong, a Beijing native and Princeton University research on nuclear and disarmament issues. The direct lines of communication have also broken off. When officials at the Pentagon called Beijing after the balloon crisis, no one there picked up. A short time before, the U.S. secretary of state had cancelled his first visit to China.

A way out of the downward spiral in Sino-American relations, which has been accelerating since the start of the Ukraine war, seems increasingly difficult – especially since further conflicts are looming or already pre-programmed: This spring, Chinese leader Xi plans to travel to Moscow. That trip promises to ease the situation about as much as the planned trip to Taiwan by U.S. Speaker of the House Kevin McCarthy. China considers Taiwan to be part of its own territory. Beijing responded to a visit last summer by McCarthy's predecessor Nancy Pelosi with several days of military exercises.

The latest economic figures look like some strangely outdated legacy of a bygone era. Whereas the volume of trade between China and Russia rose by 30 percent last year to around $190 billion, that between China and the U.S. is more than three times greater – and more than ever before. And America's European allies conduct even more business with China - to the tune of more than $900 billion.

All of that will be at stake if the suspicions expressed by U.S. Secretary of State Anthony two weeks ago are confirmed: that China is thinking about providing Russia with "lethal aid" – that is, supplying weapons, munitions or combat drones .

If that were to happen, Blinken said, it "could cause a serious problem for us and in our relationship" – and would likely result in an economic war that could dwarf anything that has preceded it. Mikko Huotari, head of the Berlin-based Mercator Institute for China Studies (MERICS), has spoken of a "mega disaster," and a "meltdown" of the global economy if that were to happen.

It's a bitter irony, but also probably true: The Cold War, until now a horror vision for Sino-American relations, may end up being a comparatively harmless scenario.

News round-up, March 9, 2023

Quote of the day… 

The White House described Hersh’s story as “utterly false and complete fiction.” The article certainly included some dubious claims, not least that NATO Secretary General Jens Stoltenberg has “cooperated with the American intelligence community since the Vietnam War.” Stoltenberg, born in 1959, was 16 years old when the war ended.

The washington post

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Most read…

God, oh God! Who detonated NORD STREAM?

Not me… Who then was it?

There are four potential explanations….

POLITICO EU BY CHARLIE COOPER, EDITING BY GERMÁN & Co,  MARCH 8, 2023 .

Georgian opposition calls for more protests against government

Tbilisi dropped a bill on 'foreign agents' that triggered massive protests earlier this week but opposition parties are calling for a new rally on Thursday evening.

Le Monde with AFP, on March 9, 202311h00, updated at 11h01 on March 9, 2023.

CERAWEEK-Big Oil on hydrogen: forget the rainbow, just make it profitable

Hydrogen as a potential alternative to natural gas, coal or oil burned in heavy industry or shipping is seen as key to reducing emissions in industries in which electrification is not practical. Hydrogen is often described by color and many in the industry call it a "rainbow renewable" but the most important color for executives at the conference was green -- as in cash.

REUTERS By Stephanie Kelly editing by Germán & Co

Inside the simmering feud between Donald Trump and Fox News

Donald Trump got a tip-off on Saturday that the Fox News Channel would be taking his Conservative Political Action Conference speech live, a switch from the network’s largely indifferent posture toward the former president since he helped send it into crisis after the 2020 election.

Story by Michael Scherer, Josh Dawsey, Sarah Ellison/ The Washington Post

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”We’ll need natural gas for years…

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but can start blending it with green hydrogen today, AES CEO, Andrés Gluski says…

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Image: Germán & Co

God, oh God! Who detonated NORD STREAM?

Not me… Who then was it?

There are four potential explanations….

POLITICO EU BY CHARLIE COOPER, EDITING BY GERMÁN & Co,  MARCH 8, 2023 .

Nearly six months on from the subsea gas pipeline explosions, which sent geopolitical shockwaves around the world in September, there is still no conclusive answer to the question of who blew up Nord Stream.

Some were quick to place the blame squarely at Russia’s door — citing its record of hybrid warfare and a possible motive of intimidation, in the midst of a bitter economic war with Europe over gas supply.

But half a year has passed without any firm evidence for this — or any other explanation — being produced by the ongoing investigations of authorities in three European countries.

Since the day of the attack, four states — Russia, the U.S., Ukraine and the U.K. — have been publicly blamed for the explosions, with varying degrees of evidence.

Still, some things are known for sure…

As was widely assumed within hours of the blast, the explosions were an act of deliberate sabotage. One of the three investigations, led by Sweden’s Prosecution Authority, confirmed in November that residues of explosives and several “foreign objects” were found at the “crime scene” on the seabed, around 100 meters below the surface of the Baltic Sea, close to the Danish Island of Bornholm.

Now two new media reports — one from the New York Times, the other a joint investigation by German public broadcasters ARD and SWR, plus newspaper Die Zeit — raised the possibility that a pro-Ukrainian group — though not necessarily state-backed — may have been responsible. On Wednesday, the German Prosecutor’s Office confirmed it had searched a ship in January suspected of transporting explosives used in the sabotage, but was still investigating the seized objects, the identities of the perpetrators and their possible motives.

In the information vacuum since September, various theories have surfaced as to the culprit and their motive:

Theory 1: Putin, the energy bully

In the days immediately after the attack, the working assumption of many analysts in the West was that this was a brazen act of intimidation on the part of Vladimir Putin’s Kremlin.

Mykhailo Podolyak, an adviser to Volodymyr Zelenskyy, spelt out the hypothesis via his Twitter feed on September 27 — the day after the explosions were first detected. He branded the incident “nothing more [than] a terrorist attack planned by Russia and act of aggression towards the EU” linked to Moscow's determination to provoke “pre-winter panic” over gas supplies to Europe.

Polish Prime Minister Mateusz Morawiecki also hinted at Russian involvement. Russia denied responsibility.

The Nord Stream pipes are part-owned by Russia’s Gazprom. The company had by the time of the explosions announced an “indefinite” shutdown of the Nord Stream 1 pipes, citing technical issues which the EU branded “fallacious pretences.” The new Nord Stream 2 pipes, meanwhile, had never been brought into the service. Within days of Gazprom announcing the shutdown in early September, Putin issued a veiled threat that Europe would “freeze” if it stuck to its plan of energy sanctions against Russia.

But why blow up the pipeline, if gas blackmail via shutdowns had already proved effective? Why end the possibility of gas ever flowing again?

Simone Tagliapietra, energy specialist and senior fellow at the Bruegel think tank, said it was possible that — if it was Russia — there may have been internal divisions about any such decision. “At that point, when Putin had basically decided to stop supplying [gas to] Germany, many in Russia may have been against that. This was a source of revenues.” It is possible, Tagliapietra said, that “hardliners” took the decision to end the debate by ending the pipelines.

Blowing up Nord Stream, in this reading of the situation, was a final declaration of Russia’s willingness to cut off Europe’s gas supply indefinitely, while also demonstrating its hybrid warfare capabilities. In October, Putin said that the attack had shown that “any critical infrastructure in transport, energy or communication infrastructure is under threat — regardless of what part of the world it is located" — words viewed by many in the West as a veiled threat of more to come.

Theory 2: The Brits did it

From the beginning, Russian leaders have insinuated that either Ukraine or its Western allies were behind the attack. Kremlin spokesman Dmitry Peskov said two days after the explosions that accusations of Russian culpability were “quite predictable and predictably stupid.” He added that Moscow had no interest in blowing up Nord Stream. “We have lost a route for gas supplies to Europe.”

Then a month on from the blasts, the Russian defense ministry made the very specific allegation that “representatives of the U.K. Navy participated in planning, supporting and executing” the attack. No evidence was given. The same supposed British specialists were also involved in helping Ukraine coordinate a drone attack on Sevastopol in Crimea, Moscow said.  

The U.K.’s Ministry of Defence said the “invented” allegations were intended to distract attention from Russia’s recent defeats on the battlefield. In any case, Moscow soon changed its tune.

Theory 3: U.S. black ops

In February, with formal investigations in Germany, Sweden and Denmark still yet to report, an article by the U.S. investigative journalist Seymour Hersh triggered a new wave of speculation. Hersh’s allegation: U.S. forces blew up Nord Stream on direct orders from Joe Biden.

The account — based on a single source said to have “direct knowledge of the operational planning” — alleged that an “obscure deep-diving group in Panama City” was secretly assigned to lay remotely-detonated mines on the pipelines. It suggested Biden’s rationale was to sever once and for all Russia’s gas link to Germany, ensuring that no amount of Kremlin blackmail could deter Berlin from steadfastly supporting Ukraine.

Hersh's article also drew on Biden’s public remarks when, in February 2022, shortly before Russia’s full-scale invasion, he told reporters that should Russia invade “there will be no longer Nord Stream 2. We will bring an end to it.”

The White House described Hersh’s story as “utterly false and complete fiction.” The article certainly included some dubious claims, not least that NATO Secretary General Jens Stoltenberg has “cooperated with the American intelligence community since the Vietnam War.” Stoltenberg, born in 1959, was 16 years old when the war ended.

Russian leaders, however, seized on the report, citing it as evidence at the U.N. Security Council later in February and calling for an U.N.-led inquiry into the attacks, prompting Germany, Denmark and Sweden to issue a joint statement saying their investigations were ongoing.

Theory 4: The mystery boatmen

The latest clues — following reports on Tuesday from the New York Times and German media — center on a boat, six people with forged passports and the tiny Danish island of Christiansø.

According to these reports, a boat that set sail from the German port of Rostock, later stopping at Christiansø, is at the center of the Nord Stream investigations.

Germany’s federal prosecutor confirmed on Wednesday that a ship suspected of transporting explosives had been searched in January — and some of the 100 or so residents of tiny Christiansø told Denmark’s TV2 that police had visited the island and made inquiries. Residents were invited to come forward with information via a post on the island’s Facebook page.

Both the New York Times and the German media reports suggested that intelligence is pointing to a link to a pro-Ukrainian group, although there is no evidence that any orders came from the Ukrainian government and the identities of the alleged perpetrators are also still unknown.

Podolyak, Zelenskyy's adviser, tweeted he was enjoying “collecting amusing conspiracy theories” about what happened to Nord Stream, but that Ukraine had “nothing to do” with it and had “no information about pro-Ukraine sabotage groups.”

Meanwhile, Germany’s Defense Minister Boris Pistorius warned against “jumping to conclusions” about the latest reports, adding that it was possible that there may have been a “false flag” operation to blame Ukraine.

The Danish Security and Intelligence Service said only that their investigation was ongoing, while a spokesperson for Sweden’s Prosecution Authority said information would be shared when available — but there was “no timeline” for when the inquiries would be completed.

The mystery continues…

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Image: Germán & Co by Shutterstock

Georgian opposition calls for more protests against government

Tbilisi dropped a bill on 'foreign agents' that triggered massive protests earlier this week but opposition parties are calling for a new rally on Thursday evening.

Le Monde with AFP, on March 9, 202311h00, updated at 11h01 on March 9, 2023.

A man waves a Georgian flag in front of a burning barricade as other protesters stand behind, not far from the Georgian parliament building in Tbilisi, Georgia, Thursday, March 9, 2023. ZURAB TSERTSVADZE / AP

Georgian opposition parties vowed on Thursday, March 9, to continue protesting despite the ruling party's promise to revoke a controversial new law on "foreign agents" that sparked large rallies and international outcry.

The ruling Georgian Dream party said it was halting plans to introduce the bill seen as reminiscent of Russian legislation used to silence critics.

"For as long as there are no guarantees that Georgia is firmly on a pro-Western course, these processes will not stop," a group of opposition parties said in a joint statement, adding a fresh rally was scheduled for Thursday evening in Tbilisi.

"We demand that dozens of protesters that were arrested be immediately released," Tsotne Koberidze of the opposition Girchi party said, reading out the statement to reporters.

Georgia's Parliament gave its initial backing to the legislation earlier this week in a move that triggered mass protests on Tuesday and Wednesday.

Police fired water and tear gas at thousands of demonstrators and issued a dispersal order. The demonstrations later grew into wider protests against the Georgian government's perceived pro-Kremlin drift.

The European Union and the United States criticized the legislation as a blow to Georgian democracy and the Black Sea nation's bid to join the EU and NATO with concern growing that the former Soviet republic is taking an authoritarian turn and moving ever more closer to the Kremlin.

Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Pipes of a gas blending station are pictured in Oehringen, south western Germany, February 8, 2023, a site for testing gas and hydrogen mixtures, where some 30 properties will shortly near a targeted ratio of 30% green hydrogen and 70% natural gas in their heating fuel. REUTERS/Timm Reichert/File Photo

CERAWEEK-Big Oil on hydrogen: forget the rainbow, just make it profitable

HOUSTON, March 8 (Reuters) - Governments worldwide need to simplify rules around hydrogen supply to attract investment and scale it up to become competitive enough to substitute fossil fuel use in heavy industry, energy executives said this week.

Hydrogen as a potential alternative to natural gas, coal or oil burned in heavy industry or shipping is seen as key to reducing emissions in industries in which electrification is not practical. Hydrogen is often described by color and many in the industry call it a "rainbow renewable" but the most important color for executives at the conference was green -- as in cash.

REUTERS By Stephanie Kelly editing by Germán & Co

Hydrogen can be made in many ways, some cleaner than others. Among methods that produce what is known as green hydrogen are electrolysis to split water into hydrogen and oxygen using power from renewables. Hydrogen can also be made from natural gas. When carbon emissions from the process are captured and stored, it is known as blue hydrogen.

The industry is still in a nascent stage and the fuel is relatively expensive to produce, so governments worldwide are seeking ways to facilitate rapid development to make it an economic alternative to fossil fuels in industry.

Provisions in U.S. President Joe Biden's signature Inflation Reduction Act (IRA) and legislation in the European Union have incentivized the development of hydrogen but need further clarification, and government mandates may be required to encourage industries such as steel and shipping to embrace hydrogen, energy industry executives said at the CERAWeek energy conference this week in Houston.

"The market for hydrogen and people's willingness to pay a premium for low-emissions fuels I think hasn't quite taken off yet," Exxon Mobil Corp (XOM.N) Chief Executive Darren Woods said.

Though the IRA is incentivizing production of green and blue hydrogen, Woods said the associated costs are making it difficult for Exxon's partners to sell either into Europe and Asia.

Discussions and rules around classifying hydrogen made from renewable fuels or natural gas should be secondary to making the fuel affordable for consumers, said Colin Parfitt, vice president of Midstream for Chevron Corp.

"There is way too much conversation about if it is blue or green," Parfitt said. "The challenge is how do you create hydrogen as a business."

Transporting hydrogen is currently not commercially viable nor affordable for consumers, Parfitt said.

The technology for shipping hydrogen is still in early stages of development, said Chevron's vice president of hydrogen Austin Knight.

DEMAND FOR HYDROGEN

The most obvious and near-term demand for hydrogen is in industries that currently use so-called grey hydrogen that is produced from fossil fuels, Spanish energy producer Cepsa SA (CPF.GQ) Chief Executive Maarten Wetselaar told Reuters. Grey hydrogen is currently consumed by fertilizer, refining, and iron and steel units.

About 30-35% of the total energy system will need hydrogen to decarbonize, he said.

For industries such as shipping, government mandates are needed to make hydrogen cost competitive with cheaper petroleum-based fuel oil, Wetselaar said.

By 2030, Cepsa plans to produce 600,000 tons of green ammonia per year, produced using hydrogen made from renewable energy, for green marine fuel and begin green ammonia exports by 2027. Cepsa could begin selling green ammonia to ships by 2026, Wetselaar told Reuters.

Meanwhile, low-carbon hydrogen fuels used for transportation need more infrastructure, such as refueling stations, to support and scale the market, said Plug Power Chief Executive Andy Marsh.

ADDED COMPLEXITIES

Green hydrogen could quickly be brought to market with the right rules around production, said CEO John Ketchum of the world's top renewable power generator NextEra.

NextEra is working with the U.S. Treasury on rules that govern what can be considered green hydrogen, he said. The process is complicated by the variability of renewable power supply from wind and solar, he said.

If power from those sources dropped, then an electrolyzer producing hydrogen would need to switch to power from the grid, which may or may not be renewable, he added. If hydrogen producers could no longer classify hydrogen as green and had to switch off electrolyzers, the cost of producing the fuel would go up and make it uneconomical. The solution would be to offset the use of non-renewable power with carbon credits, he said.

Otherwise, "we will have an out-of-the-money product," he said.

More regulation, certifications and standards are needed for handling hydrogen, along with supply contracts to access infrastructure and new ideas on transporting hydrogen, company officials said Wednesday.

"The IRA has not been fully implemented yet in the U.S., so after that contract terms and clear standards will have to be tackled," said Juancho Eekhout, vice president of business development at Sempra Infrastructure.

Further, the trade of hydrogen also has complexities that will need to be addressed, said Margaux Moore, head of the Energy Transition Research Group at Trafigura.

Depending on how hydrogen is produced, the fuel has different carbon intensity scores in different countries, she said.

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Image: by Jabin Botsford/The Washington Post

Inside the simmering feud between Donald Trump and Fox News

Donald Trump got a tip-off on Saturday that the Fox News Channel would be taking his Conservative Political Action Conference speech live, a switch from the network’s largely indifferent posture toward the former president since he helped send it into crisis after the 2020 election.

Story by Michael Scherer, Josh Dawsey, Sarah Ellison/ The Washington Post

Trump decided he could not pass up the opportunity to send a message.

“I hope Fox doesn’t turn off, but we did much better in 2020 than we did in 2016,” he said in an apparent reference to the false election claims that were at the center of many of the network’s controversies, including a $1.6 billion defamation lawsuit against Fox News that has led to a massive release of internal company documents.

It was just another volley in a low-grade war — some of it public, much of it hidden — that has emerged as one of the defining dynamics in the Republican Party as the 2024 presidential campaign gets underway. Trump’s advisers see in Fox News leadership a clear adversary in their march back to the White House and have sought to foster a divide between executives and “the brave and patriotic” opinion hosts with whom he continues to have relationships.

Trump attacked Fox Chairman Rupert Murdoch by name this month, calling him and his executives a “group of MAGA hating Globalist RINOS” who are “aiding & abetting the destruction of America.” Trump’s son, Donald Trump Jr. — noting that he had not been invited on the network in six months — accused Fox News leaders last week of harboring an “America Last, war forever, garbage, fold-to-the-Democrats agenda.” Other allies, such as Stephen K. Bannon, have shredded the network in public.

Documents uncovered by ongoing litigation have also revealed the extent of the ongoing hostility toward Trump from Murdoch and other top executives, both before and after the Jan. 6, 2021, attack on the U.S. Capitol. The Fox News boss emailed a former company executive in early 2021 that the goal was “to make Trump a non person.” Fox News board member Paul D. Ryan, a former Republican House speaker, told another Fox executive around the same time that he had communicated to both Rupert Murdoch and Fox Corp. CEO Lachlan Murdoch that there was a “huge inflection point to keep Trump down and move on.”

“Both Rupert and Lachlan agree fully,” Ryan wrote.

Since then, the network has dismissed Trump’s daughter-in-law, Lara Trump, as a contributor because of the network’s supposed ban on political activity. But the policy applies typically to people who themselves are declaring a candidacy, as happened with Arkansas Gov. Sarah Huckabee Sanders (R) and former presidential candidate Ben Carson when they ran for political office.

Fox now also frowns upon letting Trump appear on the network by phone, once a standard way for hosting him on the network until he left office, according two people familiar with the situation who, like others interviewed for this article, spoke on the condition of anonymity to discuss internal details. His events and rallies are rarely covered live — and often not at all.

At the same time, Murdoch’s media outlets have lavished attention and praise on Trump’s principal rival, Florida Gov. Ron DeSantis (R), who publicly credits the network in his new book — which is published by another company controlled by Murdoch — with aiding his rise in politics. The DeSantis book was heavily promoted last week when the governor made at least five live appearances on the network, according to a tally by Media Matters for America, a liberal group that monitors Fox News programming.

Four takeaways from the new Fox-Dominion lawsuit documents

Exclusive excerpts from the DeSantis book ran in the New York Post and the Wall Street Journal, and on FoxNews.com, all of which are controlled by Murdoch. DeSantis has separately given recent interviews to the New York Post and the Times of London, which is also controlled by Murdoch, while spurning requests from other print outlets.

It’s a standoff with billions of dollars in revenue at stake for the nation’s most successful cable news broadcaster, not to mention the outcome of the Republican primary battle.

“Whether it’s the New York Post or the Wall Street Journal or Fox, you can clearly see the company is eager not to repeat the mistakes of 2016,” said Chris Stirewalt, a longtime Fox political editor who was ousted after the election. “But it will test the resolve of the network to maintain that posture if there are ratings consequences, if they become too much a target from his folks, that they will stick with it.”

Some in both camps have been seeking a truce before more damage is done. Several of Fox News’s most high-profile figures continue to speak to the former president and work with his team. Trump acknowledged his existing relationships during his CPAC speech, praising Fox hosts Mark Levin, Gregg Jarrett, Sean Hannity, Jesse Watters and Tucker Carlson.

Well, the 2024 presidential election may be more than 19…

Among those most invested in securing better coverage on Fox for Trump is Jason Miller, his longtime on-again, off-again spokesman. Miller called Fox allies ahead of CPAC, asking for them to show the speech, and has worked individual producers at the network to try to convince the shows to carry Trump more, according to people familiar with the situation.

“You can’t ignore the party front-runner, and the Fox base wants to see President Trump. Many involved in the network would like to see President Trump covered more by the network. He’s ratings gold, and he’s the dominant front-runner for the Republican nomination,” Miller said.

At times, Trump gets livid watching all the positive DeSantis coverage, particularly on topics that he says he took on first, according to advisers.

“It’s not ideal, but we have to remember in 2016, it wasn’t glowing at first, either. You have to get through it. They’ll come around when he’s the nominee,” one adviser said. “What are they going to do? Not show the Republican nominee on their channel?”

Advisers have tried to temper his frustration by telling him that many supporters are watching other channels. The former president still watches Fox all the time, according to the advisers. He eats dinner with Chris Ruddy, who runs rival network Newsmax, at his Mar-a-Lago Club in Florida, but Fox News often still plays on the televisions and Sean Hannity talks to Trump and his team often, they said.

Trump’s team and Carlson’s show discussed arranging an interview late last month, but discussions broke down over logistics, according to two people familiar with the matter. Trump “did not want to appear in a box because former presidents don’t appear in boxes,” one of these people said, and Carlson did not want a phone interview. Hannity later showed an interview of Trump, but it was taped earlier for his radio show.

Internal Fox messages revealed in court filings Tuesday as part of a defamation lawsuit against Fox by Dominion Voting Systems showed Carlson vacillating on his support for Trump after the 2020 election. After initially calling for a Fox News reporter to be fired for accurately reporting that Trump’s election fraud claims were false, Carlson texted with a colleague in early 2021 that his show was “very very close to being able to ignore Trump most nights. I truly can’t wait.” Carlson added of the then-president, “I hate him passionately.”

Republicans who have spoken to Carlson say he agrees with Trump on many topics, particularly foreign policy — but has grown frustrated at times with his behavior, rhetoric and approach. Trump has told others that Carlson is not as reliable as Hannity and other hosts at defending him but that he respects his influence in the Republican Party and ability to secure high television ratings.

As the documents were released Tuesday night, Trump signaled that he was happy with Carlson’s recent arguments that the Jan. 6 attack was not a “deadly insurrection.” A Capitol Police officer, Brian D. Sicknick, died after suffering multiple strokes a day after fighting with protesters, a death that the Capitol Police chief has attributed to the violence. Multiple people have been convicted in federal court of seditious conspiracy in connection with the attack.

“GREAT JOB BY TUCKER CARLSON TONIGHT,” Trump wrote after the Carlson text message about passionately hating him was released.

Former president Donald Trump speaks at the Conservative Political Action Conference (CPAC) in Fort Washington, Md., on Saturday night. (Jabin Botsford/The Washington Post)

Preston Padden, a former Fox News executive whose emails with Murdoch were quoted in the Dominion filing, said the differences in the private musings released about Trump and the public posturing is jarring. He said that for nine months, he’d emailed with Murdoch in 2020 and 2021, and Murdoch made clear he believed the election was not stolen.

“It makes you wonder: Who’s in charge?” he said.

A former Fox executive said producers closely watched the cover of the New York Post and the writings of the Wall Street Journal’s editorial board to understand what Murdoch was thinking. The New York Post covered Trump’s campaign announcement with the diminutive cover line, “Florida man makes announcement,” and an article identified the former president as a “retiree” and “avid golfer.” A separate cover of the tabloid, after the midterm elections last year, described him as “Trumpty Dumpty” who “couldn’t build a wall” and “had a great fall.”

“The Trumpty Dumpty thing was the declaration of war. Once producers saw that, they did not wonder: How are we playing that?” a former Fox executive said.

Some of Trump’s advisers have studied DeSantis’s appearances on Fox to see how many interviews and how many minutes of positive coverage he has received, a person familiar with the work said.

In his new book, DeSantis describes Fox News’s production of his 2018 Republican primary debate as a decisive moment that helped him win his party’s gubernatorial nomination in Florida. On screen, Fox producers ran a chyron during the debate highlighting DeSantis’s Trump endorsement, Ivy League degrees and military service, while suggesting that his opponent was a career politician who had been endorsed by former Florida governor Jeb Bush (R).

“This is exactly the contrast we were looking to draw!” DeSantis wrote.

Stirewalt said that in 2016, Fox had a decision to make about Trump after he publicly attacked star host Megyn Kelly. Traditionally, he said, if you’re attacking Fox and the Fox personalities, you aren’t going to get “juicy segments and high visibility stuff.”

“He publicly attacked one of our lead anchors and dropped out of our debate, and the consequence was basically nothing. That’s when I knew the dynamic was out of whack because the shows and the producers knew what a ratings bonanza Trump was,” he said.

Fox and the Trump White House long had a symbiotic and intertwined relationship. Several Trump aides went to become executives at Fox Corp. after leaving the White House, including former spokesman Raj Shah and Hope Hicks, a longtime Trump confidante. Trump often had Fox News hosts call into his White House meetings or visit the Oval Office — frustrating some of his aides — and the network’s coverage would frequently influence his positions on topics, former advisers said. Bill Shine, a former Fox News executive, served as a senior communications adviser to Trump in the White House.

Fox is pitching to secure Republican debates, a person familiar with the matter said. In their pitch to Republican National Committee officials, Fox executives did not mention Trump or DeSantis by name, people with knowledge of the presentation said. One Republican official said Fox is likely to get at least one debate, if not multiple ones.

Another employee said that Fox would often mobilize defenders of the network and scramble when under criticism from conservative media — and that pressure from Trump to air him more would matter more if it was echoed by conservative media.

“Fox is a company” acting rationally to cater to its viewers and “pander” to their desires, the former employee said. “If he doesn’t go away in polling, Fox is going to have to cover him more.”

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Cooperate with objective and ethical thinking…

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News round-up, March 8, 2023

Quote of the day… 

Without a doubt, Ukraine is absolutely not involved in the excesses on the pipelines," Mykhailo Podolyak, a political adviser to Zelenskiy, said in a statement.

REUTERS by NYT

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Most read…

Pro-Ukraine group sabotaged pipelines, intelligence suggests - NYT

"It does not make the slightest bit of sense."

Reuters by Olena Harmash, source NYT

India's oil deals with Russia dent decades-old dollar dominance

The country is the world's number three importer of oil and Russia became its leading supplier after Europe shunned Moscow's supplies following its invasion of Ukraine begun in February last year.

Reuter by Nidhi Verma and Noah Browning

Time Women of the Year 2023: Quinta Brunson, Cate Blanchett, more honored

“Our annual Women of the Year list examines the most uplifting form of influence by spotlighting leaders who are using their voices to fight for a more equal world,” Time Executive Editor Naina Bajekal and Senior Editor Lucy Feldman said in a statement. “Many of them have faced immense challenges that inspired them to push for change.”

EDWARD SEGARRA   | USA TODAY

CERAWeek - Russia wild card to keep oil markets on edge, execs warn

"There is very small spare capacity available so small changes in supply have impact," said Anders Opedal, Chief executive of Norwegian energy giant Equinor (EQNR.OL). "It is easy for the market to move in either direction."

Reuters by Stephanie Kelly and Erwin Seba

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”We’ll need natural gas for years…

—

but can start blending it with green hydrogen today, AES CEO, Andrés Gluski says…

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Imagen: Germán & Co

Louis Vuitton

Louis Vuitton was a French entrepreneur and designer whose name has become iconic in the fashion world.

Who Was Louis Vuitton?

Napoleon's wife engaged Louis Vuitton to be her personal packer and box maker after he became the Emperor of France in 1852. As the Louis Vuitton brand developed into the well-known luxury leather and lifestyle brand it is today, and this gave Vuitton access to elite and royal clients who would use his services throughout his life.

Early Life

Vuitton was born on August 4, 1821, in Anchay, a small hamlet in eastern France's mountainous, heavily wooded Jura region. Descended from a long-established working-class family, Vuitton's ancestors were joiners, carpenters, farmers, and milliners. His father, Xavier, was a farmer, and his mother, Coronne Gaillard, was a milliner.

Vuitton's mother passed away when he was only ten, and his father soon remarried. As legend has it, Vuitton's new stepmother was as severe and wicked as any fairy-tale Cinderella villain. A stubborn and headstrong child, antagonized by his stepmother and bored by the provincial life in Anchay, Vuitton resolved to run away for the bustling capital of Paris.

On the first day of tolerable weather in the spring of 1835, at 13, Vuitton left home alone and on foot, bound for Paris. He travelled for over two years, taking odd jobs to feed himself and staying wherever he could find shelter as he walked the 292-mile trek from his native Anchay to Paris. He arrived in 1837, at the age of 16, in a capital city in the thick of an industrial revolution that had produced a litany of contradictions: awe-inspiring grandeur and abject poverty, rapid growth, and devastating epidemics.

Become More Prominent

The successful box maker and packer Monsieur Marechal took in the young Vuitton as an apprentice in his store. Making and packing boxes was a highly regarded and fashionable craft in 19th-century Europe. All packages were built specifically to fit the items being stored and were personally loaded and emptied. It only took Vuitton a few years to establish himself as one of the city's leading practitioners of his new trade among Paris' stylish class.

Sixteen years after Louis-Napoleon Bonaparte landed in Paris, on December 2, 1851, he staged a coup d'état. He took on the regal name Napoleon III and became the Emperor of France precisely one year later. Putting back in place the showing the same stubborn, can-do spirit he displayed by walking almost 300 miles alone at the age of 13, Vuitton immediately devoted himself to restoring his business. Within months he had built a new shop at a new address, 1 Rue Scribe. Along with the new address also came a new focus on luxury. Located in the heart of the new Paris, Rue Scribe was home to the prestigious Jockey Club and had a decidedly more aristocratic feel than Vuitton's previous location in Asnieres. In 1872, Vuitton introduced a new trunk design featuring beige canvas and red stripes. The simple yet luxurious new design appealed to Paris' new elite and marked the beginning of the Louis Vuitton label's modern incarnation as a luxury brand.

Legacy and Death

Vuitton ran his business out of 1 Rue Scribe for the following 20 years, inventing high-end, opulent luggage until his death on February 27, 1892, at 70. However, the Louis Vuitton brand survived the end of its namesake creator. The Louis Vuitton brand expanded under his son Georges, who designed the company's distinctive LV monogram and subsequent generations of Vuittons, becoming the well-known luxury leather and lifestyle brand it is today. 

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Image: Germán & Co

Pro-Ukraine group sabotaged pipelines, intelligence suggests - NYT

Reuters by Olena Harmash, source NYT

Editing by Germán & Co

KYIV, March 8 (Reuters) - Intelligence reviewed by U.S. officials indicates that a pro-Ukrainian group was behind last year's attacks on the Nord Stream natural gas pipelines, but there was no evidence of the Kyiv government's involvement, the New York Times reported.

The undersea explosions, seven months into the Russia-Ukraine conflict, on the pipelines between Russia and Germany occurred in the exclusive economic zones of Sweden and Denmark in the Baltic Sea. Both countries have concluded the blasts were deliberate, but have not said who might be responsible.

Tuesday's New York Times report cited U.S. officials as saying there was no evidence that President Volodymyr Zelenskiy or his top aides were involved or that the perpetrators were acting at the behest of any Ukrainian government officials.

"Without a doubt, Ukraine is absolutely not involved in the excesses on the pipelines," Mykhailo Podolyak, a political adviser to Zelenskiy, said in a statement.

"It does not make the slightest bit of sense."

The United States and NATO have called the Sept. 26 attacks "an act of sabotage", while Russia has blamed the West and called for an independent probe. Neither has provided evidence.

Reuters could not independently verify the report.

On the battlefront, Russian forces continued to pound Bakhmut and nearby regions in a push to secure their first major victory in more than half a year.

Zelenskiy, who has vowed to defend the besieged eastern Ukrainian city, repeated a familiar message on Tuesday that reclaiming occupied territory was his major goal.

"We are doing everything to liberate our land as quickly as possible, to put a historic end as quickly as possible to attempts to deny freedom to our country and our people," Zelenskiy said in a video address that he has delivered nightly since Russia invaded on Feb. 24 last year.

RUSSIA'S 'LAST SHOT'

Ukrainian forces repelled attacks on Bakhmut and Ivanivske, on the town's western approaches, as well as on Klishchiivka, on its southern approaches, the General Staff of the Ukrainian Armed Forces said in a statement on Tuesday.

There were 37 attacks alone on the road leading to Sloviansk, a major town in Donetsk region to the west of Bakhmut, Ukrainian military analyst Oleh Zhdanov said on YouTube.

"The Russian command has taken a decision ... to bring in as much artillery as possible. But the number of artillery attacks has declined as there has been a gradual decline in the amount of ammunition available," Zhdanov added.

Yevgeny Prigozhin, the head of Russia's Wagner mercenary group which has been spearheading the battle for Bakhmut, has accused Russia's defence ministry of deliberately starving his men of ammunition, an accusation the ministry rejects.

In a post on Telegram, Prigozhin made pointed reference to the defence minister Sergei Shoigu, saying he "had not seen him in Bakhmut" and that Wagner forces were coming up against well-equipped Ukrainian forces.

While Russia has made gains in recent weeks around Bakhmut, its winter offensive has otherwise been a failure, yielding no significant gains in major assaults further north and south.

Shoigu said capturing Bakhmut would allow Moscow's forces to mount further offensive operations deeper inside Ukraine, while Kyiv has vowed to continue defending the city.

"The main task of our troops in Bakhmut is to grind the enemy's fighting capability, to bleed their combat potential," Serhiy Cherevatyi, a spokesperson for Ukraine's eastern military command, told the Ukrainian public television.

Russian losses in Bakhmut are between five and eight times greater than Ukraine's, military expert Pavlo Narozhniy told Ukrainian NV Radio. "It is critical to inflict heavy losses."

He expects a Ukrainian counter-offensive to get underway in earnest over April-May when the weather is better and more military aid arrives, including heavy battle tanks.

Elsewhere, Russian forces attacked the Ukrainian-held town of Nikopol opposite the Russian-held Zaporizhzhia nuclear power station, the General Staff statement said.

Reuters was unable to verify battlefield accounts.

DIPLOMACY

U.S. President Joe Biden on Tuesday spoke with French President Emmanuel Macron and discussed Russia's invasion and challenges posed by China, the White House said.

Moscow accuse the United States and its allies of using Ukraine to wage war against it. Rejecting that claim, Kyiv and the West say that Ukraine is fighting against an attempted land grab by Russia.

China has proposed a peace plan that Russia is paying close attention to, Kremlin spokesman Dmitry Peskov said.

Responding to Chinese Foreign Minister Qin Gang's remark that the Ukraine crisis seemed to be driven by an "invisible hand", Peskov said "this is not an invisible hand, this is the hand of the United States of America."

Separately, President Vladimir Putin issued special thanks to female military personnel, saying their courage amazes even the "most hardened fighters", in a message to mark International Women's Day on March 8, a public holiday in the country.

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Image: A view shows a one Russian rouble coin inside a bulb with crude oil at a laboratory in the Yarakta Oil Field, owned by Irkutsk Oil Company (INK), in Irkutsk Region, Russia in this picture illustration taken March 12, 2019. Picture taken March 12, 2019. REUTERS/Vasily Fedosenko/Illustration/File Photo

India's oil deals with Russia dent decades-old dollar dominance

Reuter by Nidhi Verma and Noah Browning

Editing by Germán & Co

NEW DELHI/LONDON, March 8 (Reuters) - U.S.-led international sanctions on Russia have begun to erode the dollar's decades-old dominance of international oil trade as most deals with India - Russia's top outlet for seaborne crude - have been settled in other currencies.

The dollar's pre-eminence has periodically been called into question and yet it has continued because of the overwhelming advantages of using the most widely-accepted currency for business.

India's oil trade, in response to the turmoil of sanctions and the Ukraine war, provides the strongest evidence so far of a shift into other currencies that could prove lasting.

The country is the world's number three importer of oil and Russia became its leading supplier after Europe shunned Moscow's supplies following its invasion of Ukraine begun in February last year.

Top 5 increases of Russian oil cargoes

India's top crude oil suppliers since 2011

After a coalition opposed to the war imposed an oil price cap on Russia on Dec. 5, Indian customers have paid for most Russian oil in non-dollar currencies, including the United Arab Emirates dirham and more recently the Russian rouble, multiple oil trading and banking sources said.

The transactions in the last three months total the equivalent of several hundred million dollars, the sources added, in a shift that has not previously been reported.

The Group of Seven economies, the European Union and Australia, agreed the price cap late last year to bar Western services and shipping from trading Russian oil unless sold at an enforced low price to deprive Moscow of funds for its war.

Some Dubai-based traders, and Russian energy companies Gazprom and Rosneft are seeking non-dollar payments for certain niche grades of Russian oil that have in recent weeks been sold above the $60 a barrel price cap, three sources with direct knowledge said.

The sources asked not to be named because of the sensitivity of the issue.

Those sales represent a small share of Russia's total sales to India and do not appear to violate the sanctions, which U.S. officials and analysts predicted could be skirted by non-Western services, such as Russian shipping and insurance.

Three Indian banks backed some of the transactions, as Moscow seeks to de-dollarise its economy and traders to avoid sanctions, the trade sources, as well as former Russian and U.S. economic officials, told Reuters.

But continued payment in dirhams for Russian oil could become harder after the United States and Britain last month added Moscow and Abu Dhabi-based Russian bank MTS to the Russian financial institutions on the sanctions list.

MTS had facilitated some Indian oil non-dollar payments, the trade sources said. Neither MTS nor the U.S. Treasury immediately responded to a Reuters request for comment.

An Indian refining source said most Russian banks have faced sanctions since the war but Indian customers and Russian suppliers are determined to keep trading Russian oil.

"Russian suppliers will find some other banks for receiving payments," the source told Reuters.

"As it is, the government is not asking us to stop buying Russian oil, so we are hopeful that an alternative payment mechanism will be found in case the current system is blocked."

FRIENDLY VERSUS UNFRIENDLY

Paying for oil in dollars has been the nearly universal practice for decades. By comparison, the currency's share of overall international payments is much smaller at 40%, according to January figures from payment system SWIFT.

Daniel Ahn, a former chief economist at the U.S. State Department and now a global fellow at the Woodrow Wilson International Center for Scholars, says the dollar's strength is unmatched, but the sanctions could undermine the West's financial systems while failing to achieve their aim.

"Russia's short-term efforts to try and sell things in return for currencies other than the dollar is not the real threat to Western sanctions," he said.

"(The West) is weakening the competitiveness of their own financial services by adding yet another administrative layer."

The price cap coincided with an EU embargo on imports of Russian seaborne oil, rounding off a year of bans and sanctions, including largely expelling Russia from the SWIFT global payments system.

Around half of its gold and foreign exchange reserves, which stood near $640 billion, were frozen.

In response, Russia said it would seek payment for its energy in the currency of "friendly" countries and last year ordered "unfriendly" EU states to pay for gas in roubles.

For Russian firms - as payments were blocked or delayed even if they were not violating any sanctions, due to overly zealous compliance - dollars became potentially a "toxic asset", independent analyst and former adviser at the Bank of Russia Alexandra Prokopenko, said.

"Russia desperately needs to trade with the rest of the world because it's still dependent on its oil and gas revenues so they are trying all options they have," she told Reuters.

"They're working on building a direct infrastructure between the Russian and Indian banking systems."

India’s largest lender State Bank of India has a nostro, or foreign currency, account in Russia. Similarly, many banks from Russia have opened accounts with Indian banks to facilitate trade.

IMF Deputy Managing Director Gita Gopinath said in the month after Russia's invasion of Ukraine that sanctions on Russia could erode the dollar's dominance by encouraging smaller trading blocs using other currencies.

"The dollar would remain the major global currency even in that landscape but fragmentation at a smaller level is certainly quite possible," she told the Financial Times. The IMF did not respond to a Reuters request for comment.

Beyond Russia, tensions between China and the West are also eroding the long-established norms of dollar-dominated global trade.

Russia holds a chunk of its currency reserves in renminbi while China has reduced its holdings of dollars, and Russian President Vladimir Putin said in September Moscow had agreed to sell gas supplies to China for yuan and roubles instead of dollars.

INDIA DISPLACES EUROPE

India in the last year displaced Europe as Russia's top customer for seaborne oil, snapping up cheap barrels and increasing imports of Russian crude 16-fold compared to before the war, according to the Paris-based International Energy Agency. Russian crude accounted for about a third of its total imports.

Fossil fuel shipment departures

India's oil imports from various regions

While India does not recognise the sanctions against Moscow, the majority of purchases of Russian oil in any currency have complied with them, trade sources said, and almost all sales have taken place at levels below the price cap.

Even so, most banks and financial institutions are cautious about clearing any payments to avoid unwittingly breaching any international law.

For Indian refiners that in recent weeks started settling some Russian oil purchases in roubles, according to the trade sources, payments have been processed in part by the State Bank of India via its nostro roubles account in Russia.

Those transactions are mostly for oil purchases from Russian state energy giants Gazprom and Rosneft, the sources added. Bank of Baroda and Axis Bank have handled most of the dirham payments, the sources added.

The banks, Gazprom and Rosneft did not respond to a Reuters request for comment.

India has prepared a framework for settling trade with Russia in Indian rupees should rouble transactions be cut off by further sanctions, the sources said.

Asked for comment, the U.S. Treasury referred to the assertion by U.S. Treasury Secretary Janet Yellen two weeks into the war: "I don’t think the dollar has any serious competition, and is not likely to for a long time."

Reporting By Noah Browning and Nidhi Verma, Additional reporting by Sidhhi Nayak; Editing by Veronica Brown and Barbara Lewis

Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Time

Time Women of the Year 2023: Quinta Brunson, Cate Blanchett, more honored

“Our annual Women of the Year list examines the most uplifting form of influence by spotlighting leaders who are using their voices to fight for a more equal world,” Time Executive Editor Naina Bajekal and Senior Editor Lucy Feldman said in a statement. “Many of them have faced immense challenges that inspired them to push for change.”

EDWARD SEGARRA   | USA TODAY

Time magazine released its annual Women of the Year list, which highlights influential women across society, from “activism and government, to sports and the arts.” A handful of female entertainers, including actress-producer Quinta Brunson and Grammy-nominated singer-songwriter Phoebe Bridgers, have been selected as honorees for their unique impact.

“Our annual Women of the Year list examines the most uplifting form of influence by spotlighting leaders who are using their voices to fight for a more equal world,” Time Executive Editor Naina Bajekal and Senior Editor Lucy Feldman said in a statement. “Many of them have faced immense challenges that inspired them to push for change.”

Check out the women being spotlighted for their game-changing star power.

Quinta Brunson, from left, Cate Blanchett, Angela Bassett and Phoebe Bridgers are honorees featured on Time magazine's 2023 Women of the Year list.  

Quinta Brunson’s ‘Abbott Elementary’ diversity is women-led

The “Abbott Elementary” creator and star, who made her TV debut in the 2015 mini-series “You Do You,” has become a comedic force thanks to her work on the ABC sitcom about a ragtag group of public schoolteachers, which she executive produces and writes.

“The mockumentary’s satirical yet loving portrayal of teachers, janitors, principals and parents trying to make ends meet at an underfunded public school is a homage to their real counterparts everywhere,” Brunson’s Women of the Year profile reads.

Brunson credits the diversity of the series to her primarily female writers’ room.

“We hear each other out on what we think makes these characters layered,” Brunson told Time. “Everyone’s open to taking the lead and taking charge on these stories.”

Cate Blanchett shows women are ‘imperfect creatures’ through film

The Oscar-winning actress is up for Academy Awards gold again this year, receiving a best lead actress nomination for her performance in the music drama “Tár,” in which Blanchett plays embattled orchestra director Lydia Tár.

Blanchett is “drawn to multi-shaded characters who don’t court our approval…but Lydia Tár, in all her self-destructive glory and compelling unlikability, is like no one else we’ve ever seen onscreen,” the actress’ Women of the Year profile reads.

Depicting the multifaceted nature of womanhood authentically is important, Blanchett explained.

“We’re all imperfect creatures. And sometimes we don’t want to look at the unthinking, unintentional, inexplicable, ambiguous sides of being female,” Blanchett told Time. “We are brave, we are noble, we are generous, we are collaborative. But we are also the dark side of that because women are complex beings.”

Cate Blanchett says 'Tár' is her 'hardest film' to talk about. It could also win her a third Oscar.

Phoebe Bridgers hopes abortion advocacy ‘makes a difference’

The indie rock princess who burst onto the scene with 2017’s “Stranger in the Alps” has used her platform to advocate for women’s rights, including access to abortion.

In June, the “Kyoto” singer led an explicit chant against the “irrelevant” Supreme Court at Glastonbury Festival for “telling us what to do with our (expletive) bodies.”

“I hope it makes a difference,” Bridgers told Time, noting that she’s witnessed parents take their children out of her concerts when she’s spoken about abortion. “I hope those parents are going to lose the battle with that kid’s opinions and belief systems.”

Angela Bassett has learned ‘it’s important to give to yourself first’

Actress Angela Bassett, who starred as Ramonda in Marvel’s “Black Panther: Wakanda Forever,” earned a best supporting actress nomination at this year’s Oscars for her performance in the adventure drama.

Bassett said the characters she’s played over the years have taught her about the complexity and deeper humanity of being a woman.

“Women are called upon to be wives, sisters, friends, mothers, community leaders, activists, and we have it in our core to be these things,” Bassett told Time. “But it’s important to give to yourself first, and then you have more to share with the world.”

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Image: Germán & Co

CERAWeek - Russia wild card to keep oil markets on edge, execs warn

Reuters by Stephanie Kelly and Erwin Seba

Editing by Germán $ Co

HOUSTON, March 7 (Reuters) - Executives and officials from some of the world's top oil and gas companies said on Tuesday energy markets are balanced now, but could easily be disrupted due to tight spare production capacity and supply uncertainties related to Russia's war in Ukraine.

The comments at the CERAWeek energy conference in Houston show the industry remains on edge after weathering the initial aftermath of one of the biggest shocks to global energy flows in recent memory. A temperate winter helped by giving major consumers in Europe a reprieve from typically high demand for heating fuels.

"There is very small spare capacity available so small changes in supply have impact," said Anders Opedal, Chief executive of Norwegian energy giant Equinor (EQNR.OL). "It is easy for the market to move in either direction."

Opedal predicted natural gas supply uncertainty faced by Europe since Russia invaded Ukraine and cut off regional supplies will continue in 2024 and likely 2025. Tighter global crude supplies are also possible after the Kremlin's threat last month to cut 500,000 barrels per day (bpd) of supply from March.

On Monday, U.S. energy executives and top OPEC officials discussed concerns about a lack of spare oil production capacity at a private dinner on the sidelines of the conference, an executive who attended said.

"We may have gotten through this winter surprisingly well, but I don't think we're out of the woods yet," said Michael LaMotte, senior managing director of investment firm Guggenheim Partners. "And things actually could get worse before they get better."

Algeria, a member of the Organization of the Petroleum Exporting Countries, is in the process of investing $40 million in upstream business to satisfy demand, especially demand in Europe, said Mohamed Arkab, the country's minister of energy and mines.

PRICE CAP ON RUSSIA WORKING

Tight spare capacity makes it critical for governments sanctioning Moscow for the invasion of Ukraine to put a price cap on Russian oil instead of capping the country's ability to export crude, said Frederic Lasserre, Gunvor's global head of research and analysis.

U.S. energy envoy Amos Hochstein said the price cap - designed to reduce Russian revenues without slowing its exports - was working well, as Russian oil was still finding its way to market.

The Group of Seven countries, the European Union and Australia implemented the price cap on seaborne cargoes of Russian oil on Dec. 5, setting it at $60 a barrel.

On Feb.5, the G7 and allies also implemented a price cap on Russian fuel sales.

On Tuesday, the Kremlin said it did not recognize the price cap.

Though Russian oil is still getting to market, it is at different costs, as ships must travel longer distances to get the crude to countries that have not imposed sanctions, said Chevron CEO Mike Wirth.

OPEC Secretary General Haitham Al Ghais said on Tuesday that he was not concerned about the rerouting of Russian crude exports to countries such as China and India.

A STABLE OIL MARKET?

Officials including chief executives from Gunvor and Kuwait Petroleum Corp have reassured attendees at CERAWeek that the oil market has stabilized and reached balance, leaving behind fears of shortages this winter of crude, gas and fuel.

However, the oil market outlook later this year becomes murkier as companies, consumers and governments wrestle with factors ranging from fears of a potential global recession and higher interest rates to growing energy demand from China as it exits coronavirus restrictions.

China's oil demand will grow 500,000 to 600,000 barrels per day in 2023, OPEC's Al Ghais said, while global oil demand growth is expected to grow 2.3 million barrels per day in 2023.

Crude prices may rise in the second-half of the year as Chinese demand returns to the market, Gunvor Chief Executive Torbjorn Tornqvist said on Monday.

On Tuesday, U.S. Federal Reserve Chair Jerome Powell told lawmakers the central bank will likely need to raise interest rates more than expected to control inflation.

"This year is going to be a harder environment... driven by wider macro economics, also combined with what is going on with flows from Russia," said Savvas Manousos, CEPSA's executive vice president of global trading.

*Reporting by Stephanie Kelly, Simon Webb, Ron Bousso and Richard Valdmanis in Houston; Editing by David Gregorio

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Cooperate with objective and ethical thinking…

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News round-up, March 7, 2023

Quote of the day… 

"We made some changes internally and created a focused hydrogen organisation, a focused offshore wind organisation," Dotzenrath said in an interview. "I'm (now) just reviewing the onshore renewables part - so the onshore wind and solar part."

REUTERS EBERGY NEWS

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Most read…

China says U.S. should change attitude or risk conflict

"The United States' perception and views of China are seriously distorted," said Qin, a trusted aide to President Xi Jinping and until recently China's ambassador in Washington.

Reuters by Ryan Woo

Inside BP's plan to reset renewables as oil and gas boom

The oil major isn't backing away from renewables though, its green chief Anja-Isabel Dotzenrath stresses, it's simply changing the terms of the relationship.

Reuters by Ron Bousso

EU hopes Macron will budge on Latin American trade deal

‘We all expect a shift in Paris but this has not been tested politically yet,’ says one EU diplomat.

BY GIORGIO LEALI, CAMILLE GIJS AND SARAH ANNE AARUP, MARCH 6, 2023 

EU hopes Macron will budge on Latin American trade deal

‘We all expect a shift in Paris but this has not been tested politically yet,’ says one EU diplomat.

BY GIORGIO LEALI, CAMILLE GIJS AND SARAH ANNE AARUP, MARCH 6, 2023 

CERAWEEK Eni CEO says gas market will be "difficult" for Europe through 2025

"This next year, and also in 2024 and 2025, will be more difficult because last year until July we relied on about 80% of the Russian gas," he told the CERAWeek conference in Houston.

Reuters

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”We’ll need natural gas for years…

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but can start blending it with green hydrogen today, AES CEO, Andrés Gluski says…

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Image: Germán Toro Ghio

China says U.S. should change attitude or risk conflict

"The United States' perception and views of China are seriously distorted," said Qin, a trusted aide to President Xi Jinping and until recently China's ambassador in Washington.

Reuters by Ryan Woo

US must stop suppressing China or risk 'conflict' - FM

BEIJING, March 7 (Reuters) - The United States should change its "distorted" attitude towards China or "conflict and confrontation" will follow, China's foreign minister said on Tuesday, while defending its stance on the war in Ukraine and defending its close ties with Russia.

The U.S. had been engaging in suppression and containment of China rather than engaging in fair, rule-based competition, Foreign Minister Qin Gang told a news conference on the sidelines of an annual parliament meeting in Beijing.

"The United States' perception and views of China are seriously distorted," said Qin, a trusted aide to President Xi Jinping and until recently China's ambassador in Washington.

"It regards China as its primary rival and the most consequential geopolitical challenge. This is like the first button in the shirt being put wrong."

Relations between the two superpowers have been tense for years over a number of issues including Taiwan, trade and more recently the war in Ukraine but they worsened last month after the United States shot down a balloon off the U.S. East Coast that it says was a Chinese spying craft.

The U.S. says it is establishing guardrails for relations and is not seeking conflict but Qin said what that meant in practice was that China was not supposed to respond with words or action when slandered or attacked.

"That is just impossible," Qin told his first news conference since becoming foreign minister in late December.

Qin's comments struck the same the tough tone of his predecessor, Wang Yi, now China's most senior diplomat after being made director of the Foreign Affairs Commission Office at the turn of the year.

"If the United States does not hit the brakes, and continues to speed down the wrong path, no amount of guardrails can prevent derailment, which will become conflict and confrontation, and who will bear the catastrophic consequences?"

U.S. officials often speak of establishing guardrails in the bilateral relationship to prevent tensions from escalating into crises.

Qin likened Sino-U.S. competition to a race between two Olympic athletes.

"If one side, instead of focusing on giving one's best, always tries to trip the other up, even to the extent that they must enter the Paralympics, then this is not fair competition," he said.

'JACKALS AND WOLVES'

During a nearly two-hour news conference in which he answered questions submitted in advance, Qin made a robust defence of "wolf warrior diplomacy", an assertive and often abrasive stance adopted by China's diplomats since 2020.

"When jackals and wolves are blocking the way, and hungry wolves are attacking us, Chinese diplomats must then dance with the wolves and protect and defend our home and country," he said.

Qin also said that an "invisible hand" was pushing for the escalation of the war in Ukraine "to serve certain geopolitical agendas", without specifying who he was referring to.

He reiterated China's call for dialogue to end the war.

China struck a "no limits" partnership with Russia last year, weeks before its invasion of Ukraine, and China has blamed NATO expansion for triggering the war, echoing Russia's complaint.

China has declined to condemn the invasion and has fiercely defended its stance on Ukraine, despite Western criticism of its failure to single Russia out as the aggressor.

China has also vehemently denied U.S. accusations that it has been considering supplying Russia with weapons.

ADVANCING RELATIONS WITH MOSCOW

Image: Germán & Co

Qin said China had to advance its relations with Russia as the world becomes more turbulent and close interactions between President Xi Jinping and his Russian counterpart, Vladimir Putin, anchored the neighbours' relations.

He did not give a definite answer when asked if Xi would visit Russia after China's parliament session, which goes on for one more week.

Since Russia invaded its southwestern neighbour a year ago Xi has held talks several times with Putin, but not with his Ukrainian counterpart. This undermines China's claim of neutrality in the conflict, Kyiv's top diplomat in Beijing said last month.

Asked whether it was possible that China and Russia would abandon the U.S. dollar and euro for bilateral trade, Qin said countries should use whatever currency was efficient, safe and credible.

China has been looking to internationalise its currency, the yuan, which gained popularity in Russia last year after Western sanctions shut Russia's banks and many of its companies out of the dollar and euro payment systems.

"Currencies should not be the trump card for unilateral sanctions, still less a disguise for bullying or coercion," Qin said.

*Reporting by Yew Lun Tian, Laurie Chen, Ryan Woo and the Beijing Newsroom; Writing by Martin Quin Pollard; Editing by Lincoln Feast and Tom Hogue

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Image: Solar panels are seen in this drone photo at the Impact solar facility in Deport, Texas, U.S., July 15, 2021. REUTERS/Drone Base

Inside BP's plan to reset renewables as oil and gas boom

The oil major isn't backing away from renewables though, its green chief Anja-Isabel Dotzenrath stresses, it's simply changing the terms of the relationship.

Reuters by Ron Bousso

LONDON, March 7 (Reuters) - BP hasn't fallen out of love with renewables. It just wants to have more power.

CEO Bernard Looney's pursuit of green energy outstripped all rivals three years ago when he outlined a radical blueprint to move away from fossil fuels. Last month he applied the brakes, slowing BP's planned cuts in oil and gas and scaling back planned renewables spending in the wake of the war in Ukraine.

The oil major isn't backing away from renewables though, its green chief Anja-Isabel Dotzenrath stresses, it's simply changing the terms of the relationship.

Dotzenrath told Reuters BP was reviewing its solar and onshore wind businesses as part of a revamp that will see it move away from selling the clean electricity it produces, and instead keep hold of most of it to supply its growing electric vehicle charging network and production of low-carbon fuels.

The onshore renewables scrutiny, which hasn't been previously reported, follows reviews by Dotzenrath of BP's offshore wind and hydrogen businesses over the past year which led to overhauls that saw the company install new managers, hire staff, scrap some projects and seek to revise terms of others.

"We made some changes internally and created a focused hydrogen organisation, a focused offshore wind organisation," Dotzenrath said in an interview. "I'm (now) just reviewing the onshore renewables part - so the onshore wind and solar part."

BP's head of renewables and gas didn't elaborate on the nature of the latest review. The green stakes are high, though, given solar alone comprises more than half of BP's 43-gigawatt renewables project pipeline.

Dotzenrath also put the first numbers to BP's rebalancing act, which comes amid deteriorating profits in renewables power generation, telling Reuters that the company aimed to retain 80% of the power produced to supply the global EV network and to make "green" fuels such as hydrogen, seen by many transition experts as a key fuel of the future.

She did not give a timeframe for the shift, which represents a major pivot given the vast majority of BP's renewables output is currently linked to power grids. BP will continue to build some projects under traditional power supply deals, she added.

"We will not grow renewables for the sake of growing wind and solar," said Dotzenrath, who is marking a year in the job after joining BP shortly after Russia's invasion undermined Europe's energy security, fuelled bumper profits for oil and gas and changed the calculus of the energy transition.

"Our strategy is not necessarily about asset ownership in renewables, but it comes as a consequence. It is really about securing access to cheap - the cheapest - green electron," she added, referring to electricity from renewable sources.

IN FOCUS: VENTURE WITH EQUINOR

The most eye-popping change in the strategy update last month was BP slowing its planned cuts in oil and gas output from 40% to 25% by 2030 compared with 2019 levels.

It also lowered its projected annual spending on renewables to up to $5 billion by 2030 out of a total group budget of up to $18 billion, from $6 billion out of $16 billion under its previous update in 2022, according to a Reuters analysis.

While BP's move to produce more oil and gas for longer puts it more in line with its peers, its 25% annual reduction goal is still more ambitious than any of its global rivals.

The paring of green ambitions has been cheered by the market, with BP shares leaping about 17% since the Feb. 7 strategy update, much more than any other rival Western major.

By contrast, BP had significantly underperformed rivals since Looney outlined his industry-leading transition plans three years ago, remaining largely flat until the announcement compared with a 20% gain for Shell and 84% rise for Exxon.

The renewables revamp reflects an acknowledgement that the company won't be able to sufficiently compete with traditional power generators if it simply sells the energy produced by its wind and solar projects, according to Dotzenrath.

"It's a critical feedstock," she said. "If it is not integrated with our other businesses, we will not do this because we don't believe that we have a competitive edge."

The company's new trajectory has placed its flagship U.S. offshore wind joint venture with Norway's Equinor in the focus of managers, five sources familiar with the matter separately told Reuters.

BP executives, including Dotzenrath, have held several meetings with Equinor in London in recent weeks to discuss ways to give the oil major greater clout in the venture, said the two BP and three Equinor sources, who are close to the talks and declined to be named due to the sensitivity of the matter.

BP wants more of its staff involved in the Oslo-based venture, the people said. One of the Equinor sources with direct knowledge of the operations said BP currently had more than 20 people working on the JV projects out of a total of over 270.

Equinor declined to comment on any "speculation" about changes to the venture sought by BP. It said it looked forward to applying their combined expertise to develop projects on the U.S. East Coast. Dotzenrath also declined to comment on this.

"I am very happy with the joint venture and the progress we are making with the projects," Dotzenrath said. "These are very, very complex, large, mega projects ... we have much more ability to support Equinor in the delivery of these projects."

THAT'S THE BRUTAL REALITY

When BP paid $1.1 billion for its 50% stake in the venture to enter offshore wind in 2020, it was more reliant on the know-how of Equinor, which had over a decade of experience and specialism in the sector.

Over the past two years, though, BP has brought in hundreds of staff from renewables firms. It has also broken from its tradition of developing leaders internally and hired senior executives such as Dotzenrath, a former CEO of Germany's RWE Renewables, and an offshore wind chief from Danish giant Orsted.

The UK major surprised many investors and analysts in December when it decided not to join Equinor in bidding on a floating wind project off California. Floating offshore wind is a nascent technology that remains significantly more expensive than turbines fixed to the seabed.

"This was a portfolio decision," Dotzenrath said. "The North Sea is much more important to us and our integration story than California. I think that's the brutal reality at the moment."

THE NEW NORMAL IN NUMBERS

BP's renewables revamp is underpinned by its projections about how much money it can make from the production and sale of green power versus higher-margin low-carbon businesses within its own integrated operations.

The company's outlook for its average core earnings from oil and gas in 2030 grew by around $10 billion to $42.5 billion over the course of last year, and by a meagre $1.5 billion to $11 billion from energy-transition businesses including renewables.

BP expects a return on investment of at least 15% on bioenergy including biogas as well as from combining EV charging with retail stores. Hydrogen is seen bringing in 10% returns, with renewables lagging at a maximum of 8% under the current model dominated by power sales.

While BP had a stated target in 2020 of trading 500 terawatt hours of electricity by 2030 – twice the volume in 2019 - no such target featured in its 2023 strategy update.

Dotzenrath said growth in renewables capacity would be in service to green hydrogen and other businesses it supplied internally with clean power.

"We take the green electron and do something with it," she added. "Access and control over the green electron is key because the world is short of green electrons."

*Reporting by Ron Bousso, Shadia Nasralla; Editing by Pravin Char

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Germán & Co by shutterstock.com

EU hopes Macron will budge on Latin American trade deal

‘We all expect a shift in Paris but this has not been tested politically yet,’ says one EU diplomat.

BY GIORGIO LEALI, CAMILLE GIJS AND SARAH ANNE AARUP, MARCH 6, 2023 

PARIS — The planets now seem aligned to finally push a trade deal between the EU and Latin American countries over the finish line. Well, all planets but one — Jupiter, France’s nickname for Emmanuel Macron.

EU negotiators are traveling to Buenos Aires this week for a final stretch of trade talks with the Latin American Mercosur countries. But the main opponent of the deal is less than a 90-minute rail trip away from Brussels, in Paris. The French government says it wants to wait and see before signing off on the deal. But currently it’s mostly waiting. 

The discussions could get tricky, as Brussels will only sign on the dotted line if Brazil, Argentina, Uruguay and Paraguay agree to extra climate commitments that it has now put to the Mercosur countries in writing for the first time.

Publicly, there are few signs that France will budge. “I have held a firm position and I will continue to hold it,” Macron told farmers in late February.

In Brussels, though, several EU diplomats said that Paris’ opposition to the deal has become less vocal. They see this as a sign that France could change its mind as geopolitical tensions following the war in Ukraine and the coronavirus pandemic strengthen the case for the 27-nation bloc to diversify its trading relationships.

“We all expect a shift in Paris but this has not been tested politically yet,” said an EU diplomat, predicting that “this year will be the real test” for France after the election last year of Luiz Inácio “Lula” da Silva installed a leader in Brazil with whom Europe can do business.

The political context in Paris has changed, too, since Macron won reelection last year for a second and final term as president, another EU diplomat said, meaning he faces less pressure to please France’s globalization-skeptic voters.

Paris wants the Mercosur bloc to commit to stop illegal deforestation in the Amazon, to comply with the Paris climate agreement, and to apply the same environmental and sanitary standards as EU farmers. “We are still far from that,” a French official said.

It's a message that Macron drove home last week, albeit indirectly, on a trip to Africa where — posing before a scenic backdrop of rainforest in Gabon, on Central Africa's Atlantic coast — he emphasized the importance of primary tropical rainforests in soaking up carbon emissions.

One more thing ...

The European Commission has to assuage the concerns of France, the European Parliament and NGOs, and it has been working on a legally-binding addendum on how to include extra environmental criteria from the Mercosur countries without having to reopen the original trade deal and make changes to it.

The secret document has yet to be published, and the French government hasn’t yet taken a position on it. But the same French official conceded that France’s worries could be addressed without reopening the deal itself — a sign that the additional protocol could be enough to persuade Paris to change its mind.

Supporters of the deal stress that much has changed since it was first struck in 2019, including the fact that the EU now has new rules banning the import of goods whose production entails deforestation. Also, last year, the EU implemented a new carbon border tax that would hit polluting competitors around the world.

Farmer Julien Georges at the Salon de l’Agriculture | Giorgio Leali for POLITICO

Former EU trade commissioner and WTO chief Pascal Lamy said the Commission should be brave and defy Paris in a vote amongst EU capitals. 

“At the end of the day, the Commission should ask the Council for a vote, saying that we have spent a lot of time trying to get everyone to agree and that there is not a blocking minority of member states. I had to do it myself when I was commissioner," said Lamy, noting that the trade section of the deal doesn’t need the unanimous support of EU capitals to pass.  

Opposition to the Mercosur deal is almost unanimous in France, with all political groups and the country’s powerful farm lobby FNSEA constantly describing it as a threat to farmers and consumers. 

Backing the deal could mean losing the support of French farmers, who could then swing towards Marine Le Pen’s far-right National Rally, Macron’s arch-nemesis.

“Many small farmers switched to the National Rally, it’s the pressure of the National Rally,” as Lamy put it. 

Healthy diet

When Macron in late February visited the Salon de l’Agriculture, a major farming event on the outskirts of Paris, he spent most of his day with livestock breeders and had lunch with meat industry representatives worried that the Mercosur deal would open the floodgates to imports of South American beef. 

“Feeding the French people with merde (shit) so that we can export other products to South America is inadmissible,” farmer Julien Georges, who owns a herd of 140 Charolais cattle in the Lorraine region, told POLITICO as Macron stood nearby.

But not everyone is against the deal in France. Business organizations in France and Europe in the past repeatedly urged Brussels and Paris to unlock the deal. 

“We are unable to defend the agreement. Even if we are in favor of it, politically it does not pass,” said a French industry representative, who refused to speak publicly, stressing the political sensitivity of the deal in France.

The French government is gearing up to face additional pressure as Brussels is moving faster to push the deal beyond the finish line. Officials from the economy and trade ministries are testing the waters, for instance by setting up meetings with industry representatives. 

“We know very well that some want to make progress on [the deal], we will see what balances can evolve,” said one official from the French prime minister's office, requesting anonymity due to the sensitivity of the matter. 

For Lamy, the former trade commissioner, the time has come for Paris to finally be pragmatic and back a deal where Europe has more to gain than to lose.

“If you think that you can open that market without having to pay something when it comes to agriculture … you must be dreaming!”

Giorgio Leali reported from Paris, and Camille Gijs and Sarah Anne Aarup from Brussels. Additional reporting by Barbara Moens.

*This story corrects the attribution of a quote to farmer Julien Georges.

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Cooperate with objective and ethical thinking…

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Image:Eni Chief Executive Officer Claudio Descalzi attends a signing ceremony as QatarEnergy joins TotalEnergies and Eni to explore Lebanon's offshore oil and gas, in Beirut, Lebanon January 29, 2023. REUTERS/Mohamed Azakir/File Photo

CERAWEEK Eni CEO says gas market will be "difficult" for Europe through 2025

Reuters

Eni Chief Executive Officer Claudio Descalzi attends a signing ceremony as QatarEnergy joins TotalEnergies and Eni to explore Lebanon's offshore oil and gas, in Beirut, Lebanon January 29, 2023. REUTERS/Mohamed Azakir/File Photo

HOUSTON, March 7 (Reuters) - Eni (ENI.MI) CEO Claudio Descalzi said on Tuesday that the natural gas market will be "more difficult" for Europe this winter through 2025 due to a lack of supply from Russia.

"This next year, and also in 2024 and 2025, will be more difficult because last year until July we relied on about 80% of the Russian gas," he told the CERAWeek conference in Houston.

"Now there's no Russian gas at all."

*Writing by Richard Valdmanis

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News round-up, March 6, 2023

Quote of the day… 

European Commission chief von der Leyen says the EU has seen ‘no evidence’ that China is considering sending arms to Russia.

POLITICO EU BY GABRIEL RINALDI AND HANS VON DER BURCHARD

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Most read…

Germany’s Scholz says China ‘declared it will not deliver’ weapons to Russia

European Commission chief von der Leyen says the EU has seen ‘no evidence’ that China is considering sending arms to Russia.

POLITICO EU BY GABRIEL RINALDI AND HANS VON DER BURCHARD, MARCH 5, 2023

The Republicans Begin to Eye 2024

It’s been a winter of garish factional disputes in the G.O.P., and Donald Trump remains a seismic force of instability.

The New Yorker By Steve Coll, March 5, 2023

Kremlin: Nord Stream's future is decision for all shareholders

Reuters

Modi’s India demands good news only

Narendra Modi’s government has muzzled India’s media through arrests, tax raids and other uses of arbitrary powers. Only a few brave independent news sources still resist.

Le Monde Diplomatique by Samrat Choudhury

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”We’ll need natural gas for years…

—

but can start blending it with green hydrogen today, AES CEO, Andrés Gluski says…

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Image: Germán Toro Ghio by shutterstock.com

Germany’s Scholz says China ‘declared it will not deliver’ weapons to Russia

European Commission chief von der Leyen says the EU has seen ‘no evidence’ that China is considering sending arms to Russia.

POLITICO EU BY GABRIEL RINALDI AND HANS VON DER BURCHARD, MARCH 5, 2023

MESEBERG, Germany — German Chancellor Olaf Scholz on Sunday said China had declared it won’t supply Russia with weapons for its war against Ukraine, suggesting that Berlin has received bilateral assurances from Beijing on the issue.

Scholz was speaking at a press conference with European Commission President Ursula von der Leyen, who told reporters that the EU has received “no evidence” so far from the U.S. that Beijing is considering supplying lethal support to Moscow.

Senior U.S. officials including Secretary of State Antony Blinken have expressed deep concern in recent weeks that China could provide weapons such as kamikaze drones to Russia, which in turn triggered warnings to Beijing from EU politicians. Scholz himself urged Beijing last week to refrain from such actions and instead use its influence to convince Russia to withdraw its troops from Ukraine.

Yet speaking at Sunday’s press conference, which was held at the German government retreat in Meseberg north of Berlin, Scholz claimed that China had provided assurances that it would not send weapons to Russia.

“We all agree that there should be no arms deliveries, and the Chinese government has declared that it will not deliver any either,” the chancellor said in response to a question by POLITICO. “We insist on this and we are monitoring it,” he added.

Scholz later told CNN that if China were to aid Russia: “I think it would have consequences, but we are now in a stage where we are making clear that this should not happen, and I’m relatively optimistic that we will be successful with our request in this case, but we will have to look at and we have to be very, very cautious.”

Scholz’s comments about Beijing came as a surprise because China has not publicly rejected the possibility of weapons deliveries to Russia. The chancellor appeared to suggest that Beijing had issued such reassurances directly to Germany.

EU foreign policy chief Josep Borrell received similar private assurances last month. Borrell told reporters that China’s top diplomat Wang Yi had told him in a private discussion at the Munich Security Conference in mid-February that China “will not provide arms to Russia.”

“Nevertheless, we have to remain vigilant,” Borrell said.

Von der Leyen, who attended the first day of a two-day German government retreat in Meseberg, told reporters that the EU still had not seen any proof that China is considering sending arms to Russia.

“So far, we have no evidence of this, but we have to observe it every day,” the Commission president said. She did not reply to the question on whether the EU would support sanctions against China should there be such weapon deliveries, saying that was a “hypothetical question” she would not answer.

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Image: Germán & Co

The Republicans Begin to Eye 2024

It’s been a winter of garish factional disputes in the G.O.P., and Donald Trump remains a seismic force of instability.

The New Yorker By Steve Coll, March 5, 2023

On August 6, 2015, Donald Trump appeared at the first Republican Party primary debate of the 2016 Presidential cycle, hosted by Fox News. Bret Baier asked all the candidates onstage if they would endorse the eventual Republican nominee, whomever that might be, and rule out running as an Independent. Trump alone declined, stating, “I cannot say.”

Come next August, another season of Republican Presidential-primary debates is set to begin, and candidate Trump is again a seismic force of instability in the G.O.P. Last week, the Republican National Committee chair said that, during the 2024 cycle, all participants in its televised primary debates should first sign a “loyalty pledge” promising to support whichever candidate is finally selected to take on the Democratic nominee—presumably Joe Biden. Trump has not indicated that he will sign such a pledge; last month, he told the radio host Hugh Hewitt that his support for the Republican standard-bearer in 2024 “would have to depend on who the nominee was.” Some of Trump’s most ardent Republican opponents feel similarly; Asa Hutchinson, a former governor of Arkansas, who is considering joining the race, told the Washington Post that he has doubts about promising to back Trump if he becomes the nominee.

This has been a winter of garish factional disputes among Republicans, starting in January with the fifteen-ballot shouting match required to elect Kevin McCarthy Speaker of the House of Representatives. McCarthy’s difficulties highlighted the power of hard-right extremists and social-media egoists among the fragile Republican majority in the House. Yet the context for that imbroglio was Trump’s continuing grip on the Party’s base, his legitimizing of the country’s far right, and the institutional G.O.P.’s ongoing failure to hold him accountable for his lies about election fraud in 2020 or his attempted subversion of the Constitution on January 6, 2021.

Holed up in his gilded bunker at Mar-a-Lago, Trump might not appear to be the political force he once was, and he has clearly lost some mojo since the Republicans’ disappointments in the midterm elections, which followed his endorsement of weak and extremist candidates in key races. By Trump’s robust standards, his fund-raising since the midterms has been anemic. His love-hate relationship with Fox News has been aggravated by a lawsuit’s recent revelations that Rupert Murdoch and some of his network’s personalities seem to have privately thought that Trump’s claims of election fraud were nonsense. As the primary field for 2024 takes shape, G.O.P. establishment figures are calling Trump a liability. “If we nominate Trump again, we’re going to lose,” the former Republican House Speaker Paul Ryan said late last month.

Yet Trump remains the top choice for 2024 among likely Republican primary voters, often by sizable margins, according to many national polls, including two released last week. Among other possible contenders, only Florida’s governor, Ron DeSantis, attracts double-digit support. And, although he and other high-profile Party leaders such as former Vice-President Mike Pence and former Secretary of State Mike Pompeo are testing the waters, for now the only other prominent figure to have officially declared is Nikki Haley, who has served as both U.N. Ambassador and governor of South Carolina.

Of the undeclared contenders, nobody triggers Trump like DeSantis, who won a thumping reëlection victory last November and has become a star attraction for Republican donors. Trump’s take is that DeSantis owes his political success to the fact that Trump backed him in the 2018 gubernatorial primary. If he is to be believed, DeSantis had “tears coming down from his eyes” at a meeting where he begged Trump for an endorsement, only to betray his mentor after he lost to Biden. These days, on his social-media site, Trump has been highlighting DeSantis’s past support for cuts to Social Security and Medicare benefits (which the Governor has since walked back). “he is a wheelchair over the cliff kind of guy,” Trump posted last week.

The DeSantis surge raises the question of whether, in today’s G.O.P., only a quasi-Trumpist can defeat Trump. The Governor promotes his record in Florida as a model for the nation, and he has a lustrous résumé—Yale, Harvard Law, Navy service. Yet he has positioned himself as a fists-up culture warrior, choosing Disney as a foil for his anti-woke posturing and championing censorious laws in Florida to regulate the teaching about gender identity and Black history. On tour last week to promote a new book, DeSantis renewed his crusade against “the ruling class” and recounted for a Fox News interviewer how he managed to stave off liberal indoctrination at Yale. He recalled turning up on campus in jean shorts and flip-flops, only to experience “major, major culture shock” as he encountered “kids from Andover and Groton,” as well as classroom discourse that involved “attacking God, attacking the United States.” (DeSantis captained Yale’s baseball team and graduated magna cum laude.)

Other contenders, including Haley and Pence, might try to run against Trump as unifiers, eschewing populist battle cries. In past Republican eras of orderly succession, Pence would likely have been an early front-runner, but Trump has excoriated him for refusing to go along with the January 6th coup plot, and he has lagged in early primary polls.

The R.N.C. might wish for normalcy and party discipline, but an unregulated brawl is the only kind of campaign that Trump knows how to mount. During last week’s litany of attacks, he complained about the “Marxist Thugs” who are out to get him, by which he meant the federal and state prosecutors who have been investigating his finances, his intimidation of election officials, his role on January 6th, and his handling of classified documents. He described America under President Biden as a “Third World Failing Nation” whose rescue urgently requires his maga revival and his restoration to the White House.

Our two-party apparatus of Presidential primaries—absurdly long, media-saturated, corrupted by big money—can hardly be justified as a model of democratic decision-making. Yet it does allow Republicans and Democrats to resolve their factional conflicts in the open, and it gives motivated partisan voters at the grass roots a say. The Republican primaries will offer an early measure of whether our constitutional system remains strong enough to expunge by democratic means the anti-democratic movement that Trump continues to mobilize. ♦

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Seaboard: pioneers in power generation in the country

…Armando Rodríguez, vice-president and executive director of the company, talks to us about their projects in the DR, where they have been operating for 32 years.

More than 32 years ago, back in January 1990, Seaboard began operations as the first independent power producer (IPP) in the Dominican Republic. They became pioneers in the electricity market by way of the commercial operations of Estrella del Norte, a 40MW floating power generation plant and the first of three built for Seaboard by Wärtsilä.

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Image: Germán & Co

Kremlin: Nord Stream's future is decision for all shareholders

Reuters

MOSCOW, March 6 (Reuters) - The Kremlin said on Monday it was for all shareholders to decide whether Nord Stream gas pipelines damaged in blasts last year should be mothballed.

Sources familiar with the plans told Reuters last week that the ruptured Nord Stream 1 and Nord Stream 2 pipelines, built by Russia's state-controlled Gazprom (GAZP.MM), were set to be sealed up and mothballed as there are no immediate plans to repair or reactivate them.

Asked about the report at a regular briefing, Kremlin spokesman Dmitry Peskov said: "Of course, this is a decision that should be taken collegially by all shareholders."

He also said the Kremlin would not issue any recommendations to Gazprom regarding the future of the undersea pipelines.

Apart from Gazprom, shareholders in Nord Stream AG, the Swiss-based operator of Nord Stream 1, are Engie (ENGIE.PA), Gasunie (GSUNI.UL), Wintershall DEA (WINT.UL) (BASFn.DE) and E.ON (EONGn.DE).

Nord Stream 1 and Nord Stream 2, each consisting of two pipes, were built by Gazprom to pump 110 billion cubic metres (bcm) of natural gas a year to Germany under the Baltic Sea.

Three of the four pipes were ruptured by unexplained blasts in September, and one of the Nord Stream 2 pipes remains intact.

Gazprom has said it is technically possible to repair the ruptured lines, but two sources familiar with plans said Moscow saw little prospect of relations with the West improving enough in the foreseeable future for the pipelines to be needed.

Europe has drastically cut its energy imports from Russia over the past year after Moscow's decision to send hundreds of thousands of troops into Ukraine on Feb. 24, 2022.

Reporting by Vladimir Soldatkin Editing by Gareth Jones

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Cooperate with objective and ethical thinking…

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Image: Germán Toro Ghio by shutterstock.com

Modi’s India demands good news only

Narendra Modi’s government has muzzled India’s media through arrests, tax raids and other uses of arbitrary powers. Only a few brave independent news sources still resist.

Le Monde Diplomatique by Samrat Choudhury

Around midday local time on 14 February 2023 the staff of the British Broadcasting Corporation in Delhi and Mumbai were surprised to see men march into their offices. They were told to hand over their mobiles and assemble in one place: it was a ‘survey’ by the Indian government’s income tax department. Although the official reason for the survey was suspected tax evasion, journalists were questioned and their computers were also ‘surveyed’. Paramilitary soldiers in combat fatigues brandishing assault rifles guarded the gate during the three-day operation. The taxman’s visit came weeks after the release of a BBC documentary, The Modi Question, that did not go down well with its subject, Prime Minister Narendra Modi, and his government (1).

The two-part documentary looks at Modi’s role as chief minister of Gujarat during riots in that state in 2002 in which at least a thousand people, most of them Muslims, were killed. The on-screen captions mention that ‘More than 30 people in India declined to take part in this series because of fears about their safety. The Indian government declined to comment about the allegations made in this film.’ After the first episode of the two-part series was broadcast by BBC Two on 17 January, the government banned the documentary, even though the BBC did not show it in India, and there were no plans to show it there.

Kanchan Gupta, a former journalist who is now senior advisor at the ministry of information and broadcasting, wrote in a Twitter thread on 21 January, ‘Important. Videos sharing @BBCWorld hostile propaganda and anti-India garbage, disguised as “documentary”, on @YouTube and tweets sharing links to the BBC documentary have been blocked under India’s sovereign laws and rules.’ Gupta added that the government had used emergency powers under its new Information Technology Rules, framed in 2021, since multiple government ministries had found it to be ‘vile propaganda’ which was ‘undermining the sovereignty and integrity of India, and having the potential to adversely impact India’s friendly relations with foreign countries as also public order within the country.’

This position was repeated stridently by the army of social media handles run by Modi’s ruling Bharatiya Janata Party (BJP) and by most mainstream Indian news channels, which have in recent years largely become public relations wings of the party. For years, TV news anchors have been Modi cheerleaders. After the tax raid on the BBC, journalists close to unnamed sources in the government swiftly began circulating through WhatsApp groups an unsigned, undated press release with no letterhead or attribution, which said, ‘Today, the Income Tax authorities conducted a survey on the BBC’s premises in Delhi in view of the BBC’s deliberate non-compliance with the Transfer Pricing Rules and its vast diversion of profits.’ Most Indian media outlets ran it, as part of their nationalist duty.

The Indian media’s relationship with the Modi government is one of deep love, though the affection has not been fully returned. Since the start of his tenure in 2014, the prime minister has held only one press conference in India and on that occasion, in 2019, he did not answer a single question. He has given rare interviews to TV news anchors known to be fans; in 2018 he spoke to the Zee News channel, answering questions like, ‘At this age, how do you have so much energy?’ Those who ask harder questions about him, his party or any aspect of his government are accused not so much of being anti-Modi or anti-BJP (both legal in a multi-party democracy) as of being ‘anti-national’. For them, Modi is India and India is Modi.

Accused of being ‘anti-national’

Being called ‘anti-national’ can have serious consequences, as several journalists have discovered in recent years. In 2020 there was a gang-rape of a girl in Hathras in the north Indian state of Uttar Pradesh, which is run by a Hindu nationalist monk from the BJP, Yogi Adityanath (2). Siddique Kappan, a journalist who was on his way to report on this, was arrested, charged with crimes including sedition under emergency anti-terrorism laws and imprisoned without trial for more than two years before finally getting bail. After his release, he told independent news portal The Wire, ‘It was easy for them to call me a terrorist, because I am a Muslim.’

The crackdown against journalists has not been restricted to Muslims. In 2020 a journalist in the state of Manipur, Kishorchandra Wangkhem, spotted the wife and girlfriend of a local government minister having a fight on Instagram. He posted this on Facebook; soon after, he was arrested and jailed for crimes including sedition (3). It was his second stint in jail for a Facebook post; in 2018 he had been jailed for 133 days after posting a rant against the state’s BJP chief minister, Biren Singh, himself a former journalist.

There is a growing tendency to monitor every news report and social media post and crack down on anything critical. The official press release is the only acceptable version. Any departure is treated as heresy. This is done by appointing government officials as ‘fact checkers’. Several state governments, run by parties across the political spectrum, have tasked the police with the job of curbing ‘fake news’. While India does indeed have a fake news problem, politicians and government officials keen on protecting their own image have found it convenient to suppress any unfavourable coverage by labelling it as fake.

Covid deaths uncovered

In 2020 in Modi’s home state of Gujarat, the editor of the small Gujarati-language web news portal Face of Nation, Dhaval Patel, ran a news item saying the state’s chief minister, Vijay Rupani of the BJP, was likely to be replaced by the party’s central leadership. Patel’s story was derided as fake news and he was jailed for sedition. The following year, Rupani was indeed replaced (4). The state had been in the throes of a terrible Covid wave. The death toll had shot up, and efforts to suppress the news had finally failed when one Hindi-language newspaper, Dainik Bhaskar, and its Gujarati-language subsidiary, Divya Bhaskar, ran investigative stories that showed massive undercounting of the deaths including a front cover report headlined ‘Government data on deaths is a lie, these burning pyres are telling the truth’.

The Dainik Bhaskar publications ran reports revealing the horrendous state of affairs in India during the second wave of Covid, when hospitals overflowed and patients in intensive care died after medical oxygen ran short. They subsequently experienced a harsher version of what the BBC is now getting — tax raids across 30-odd locations including not just offices but also the home of its owner, Sudhir Agarwal (5).

With Indian media reduced to compliance or silence, solid journalism about India appears in the foreign press, to government consternation

Mainstream Indian media companies, especially TV channels, realised that safety lay in abandoning investigative journalism. They now strictly avoid criticising the government and attack the opposition instead. Since the government is a major advertiser, this brings significant revenues (the ads get withdrawn before the taxman comes). Uncompliant journalists have lost their jobs or been sidelined within organisations; columnists who are critical of Modi have had their columns dropped. A sizeable number of once secular, liberal journalists have saved their jobs by becoming loud cheerleaders for him and Hindu nationalism. Others have simply fallen silent. The number of prominent Indian journalists who still speak truth to power is low. And mainstream TV channels that still produce proper journalism are all but gone: NDTV, the last such channel, was bought up in December 2022 by Gautam Adani, a controversial billionaire from Gujarat with close ties to Modi.

What little journalism worthy of the name still exists in India is published by small, independent websites. Not even these have escaped police raids or tax ‘surveys’. The decline in press freedom has been reflected in India’s global ranking on the annual press freedom index published by Reporters Without Borders. In 2022 India was ranked 150th out of 180 countries, a little ahead of Russia, at 155th. With Indian media reduced to compliance or silence, solid journalism about India slowly started appearing in the foreign press, to the government’s consternation. The taxman’s visit to the BBC offices is only the latest episode in a simmering row.

The BBC is not the only foreign news organisation to face the Indian government’s ire. On 13 January Deutsche Welle (DW) Asia released a video report headlined ‘Is communal violence in India here to stay in 2023?’ (6). In a promotional tweet, DW said, ‘After numerous instances of communal clashes between Hindus and Muslims in 2022, new research suggests that such violence could increase across India in 2023. Many see growing Hindu extremism as a threat to India’s principles of secularism, diversity and democracy’ (7). Reacting to this, Kanchan Gupta, cited above, described it as ‘Further drivel and trash from DW’. He added that ‘DW’s hostile agenda is to attack India in G20 year. That apart, this unhinged report stinks of anti-Hindu hate. It’s reflective of DW’s jaundiced reportage out of India’ (8).

There is one kind of story that the media can safely tell from India. All journalists are free to say or write anything they like in praise of Modi and the happy state of affairs under his rule.

Samrat Choudhury is a journalist and author, and former newspaper editor.

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