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Cuma, Şubat 3, 2023
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INTERNATIONAL MARKETS
BUSINESS
POLITICS | WORLD
TECHNOLOGY
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🇯🇵 Defense & Demographics

Europe's budget deficit widens in wake of energy subsidies, Japan's PM pledges military buildup and reversing low birthrate, Russia and Estonia expel ambassadors amid "destroyed" relations

Reuters

Good morning. It is Tuesday, January 24th.

While everyone awaits Germany to solve their Leopard dilemma and decide whether they approve dispatching these tanks to Ukraine or not, Poland simply said, "we don't have time for this," and announced they will send battle tanks to Kyiv if a small coalition of countries agrees to do the same. Berlin's response to this was, "we wouldn't stop you from doing it if you just asked."

  • Scroll down and learn more about what happened around the world — accompanied by today's playlist of course.

—Tanem and Can

INTERNATIONAL MARKETS

The eurozone budget deficit widened sharply to 3.3% of GDP in Q3 of 2022 from 2% in the previous quarter, data from Eurostat showed on Monday, caused mainly by government measures to shield consumers and businesses from record-high energy prices. In Germany, the deficit widened to 3.8% in Q3 of 2022 from 1.1% over the previous three months.

Eurozone govt deficit

Eurostat

  • Furthermore: Separate Eurostat figures also released on Monday showed that in Q3, public debt relative to GDP was 178% in Greece and 145% in Italy, the highest in the region and well above the 93% of the eurozone.

Eurozone consumer confidence continued to improve in January, a flash estimate by the European Commission revealed on Monday. The consumer confidence index in the single-currency bloc improved to ‑20.9 from -22.0 in December, registering an 11-month high but failing to match a forecast of a 2 percentage point rise to -20.0 and remaining well below its long-term average.

EU proposals to overhaul its electricity market will attempt to better protect consumer energy bills from short-term swings in natural gas and oil prices, the European Commission said on Monday. In a public consultation launched on Monday, the Commission laid out numerous options to overhaul the way power plants sell electricity, as part of the market reform it will propose in March.

Britain's National Grid said it would pay customers to use less power on Monday and Tuesday evening, in its first use of the new scheme designed to help prevent power shortages. More than a million households and businesses are signed up for the Demand Flexibility Service (DFS), which rewards people, usually via money off their bills, for cutting down consumption when electricity demand is high.

Consumer confidence in Turkey continued its recovery in January, official data showed on Monday, as the index rose 4.6% to 79.1 points but remained below the 100-line that separates a pessimistic and optimistic outlook.

BUSINESS

Ford plans to cut up to 3,200 jobs across Europe and move some product development work to the US, Germany's IG Metall union said on Monday, vowing action that would disrupt the carmaker across the continent if the cuts go ahead. "If negotiations between the works council and management in coming weeks do not ensure the future of workers, we will join the process," IG Metall said.

Ford

via Spiegel

  • A step back: The US automaker, which employs about 45,000 people in Europe, is planning seven new electric models in the region, a battery assembly site in Germany, and a nickel cell manufacturing joint venture in Turkey as part of a major EV push on the continent.

The operator of Germany's Berlin Brandenburg Airport expects a strike over a wage dispute planned for Wednesday to ground all regular passenger flights, Reuters reported on Monday. Around 300 takeoffs and landings were planned for Wednesday, when 35,000 passengers were to travel via the airport.

Elliott Management has built a multibillion-dollar stake in Salesforce, the activist investor fund announced on Monday, as the US cloud-based software giant faces calls to cut costs and improve its stock price. Fellow activist Starboard Value, which disclosed a stake in Salesforce in October, made a call to increase profit margins.

Former McDonald’s restaurants in Kazakhstan reopened on Monday with no branding, serving fast food under generic names such as "Cheeseburger", weeks after the US company left the local market, citing supply issues. Reuters had earlier reported that McDonald's Kazakhstan had stopped buying supplies from Russia and had trouble replacing them.

POLITICS | WORLD

Poland said on Monday it will send Leopard 2 battle tanks to Ukraine if a "small coalition" of countries agrees to do the same, even if Germany does not give permission for their tanks to be dispatched.

Leopard tanks

via CNN

  • The response: Berlin's new Defense Minister Boris Pistorius said there will soon be a decision on the tanks, a comment that came after the country's foreign minister said Sunday that the country would not stop Poland from sending Leopards if asked.

Russia and Estonia expelled the ambassadors from each other's countries on Monday, saying that their diplomatic missions will now be handled by chargé d'affaires as relations between the two countries have been getting worse over Ukraine. In accordance, Latvia also announced that they would downgrade diplomatic relations with Russia as of Feb 24, in a show of solidarity with its neighbor Estonia.

Estonia

via CTV

  • Blame it on the West: On a visit to South Africa, Russian Foreign Minister Sergey Lavrov said Moscow was willing to negotiate with Ukraine at the beginning of the war, but the US and other Western nations advised Ukraine against holding talks.

UK PM Rishi Sunak opened an investigation into the ruling Conservative Party Chairman Nadhim Zahawi, over allegations that he settled a multimillion-dollar unpaid tax bill while he was in charge of London's treasury. The probe came as Zahawi faces calls to resign after reports came that he paid a penalty over unpaid tax, and said over the weekend that the "error" he made was seen to be "careless and not deliberate."

Japan's PM Fumio Kishida pledged to push a military buildup under their newly adopted security strategy, saying they are facing the most severe and complex security environment since the end of WW2. Tokyo said the current deployment of missile interceptors is insufficient to defend it from rapid weapons advancement in China and North Korea, and their new defense reforms include a counterstrike capability that break's from their postwar self-defense-only principle.

Japan parliament

via Reuters

  • In accordance: PM Kishida also pledged to take urgent steps to tackle the country's declining birth rate, saying that it is "now or never," as Japan saw a new record low in births last year that dropped below 800,000 for the first time.
TECHNOLOGY

Spotify said it plans to cut 6% of its workforce —around 600 employees— and would take a related charge of up to nearly $50 million, joining the massive layoffs in the technology sector from Amazon to Meta, in preparation for a possible recession. The company also said their head of content and advertising Dawn Ostroff was leaving after four years where he helped shape Spotify's podcast business.

Spotify

via Bloomberg

  • Good to know: Spotify's operating expenses grew at twice the speed of its revenue last year, as the company poured a lot of money into its podcast business — more attractive for advertisers for having higher engagement levels.

The European Parliament's economic affairs committee is to vote on a draft law on Tuesday that would require banks to set aside a punitive amount of capital to cover holdings of crypto assets, Reuters reported. 

  • Zoom in: The draft law would introduce tougher shadow banking rules, implementing the remaining elements of Basel III, a global accord that forces banks to hold more capital to cope with market shocks unaided by taxpayers.

Elon Musk said that he was sure he had backing from Saudi financiers in 2018 to take Tesla private, as he testified against claims that he defrauded investors by later tweeting about his company. Musk said at the trial that he had met with Saudi Arabia's sovereign wealth fund PIF on July 31, 2018, and that even though they did not discuss a takeover price the representatives made clear they would do what it takes for the buyout to happen.

  • What happened? Tesla shareholders claim they suffered millions of dollars of losses after Musk tweeted on August 2018 that he had "funding secured" to take Tesla private, which was followed by a surge in Tesla's stock price and later a fall as it became clear that the buyout would not happen.

Reddit added a chief revenue officer to its executive ranks, promoting global advertising president Harold Klaie to the position, almost a year after filing for an initial public offering, Bloomberg reported.

APOSTO PICKS

🏦 Analysis: ECB struggling to keep market on its side after mixed messages

🇫🇷 Explainer: Why Macron, French unions at odds over pensions

⚕️ NHS Crisis: Why is Britain’s health service falling apart?

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