The Economist - 29 June 2024

Год выпуска: June 2024

Автор: The Economist Newspaper and The Economist Group

Жанр: Экономика/Политика

Издательство: «The Economist Newspaper Ltd»

Формат: PDF (журнал на английском языке)

Качество: OCR

Количество страниц: 76

FRANCE’S CENTRE CANNOT HOLD

• Emmanuel Macron’s coalition faces a disastrous first-round vote, page 39.
• He risks losing everything he achieved: leader, page 7.
• Paris’s commercial revival is at stake, too, page 50.
• The struggle to keep order in Brussels: Charlemagne, page 43.

What to expect from a second Biden term

• What would the president do with four more years? Briefing, page 14, and leader, page 8.
• Despite a pummelling over Gaza, he is holding his own with young Democrats, page 17.
• But a New York primary reveals the party's deep divisions: Lexington, page 22.

Can countries get rich from services?

• Trade in them is booming, but will that create broad prosperity? Page 57.

China’s big chance to change

• Some advice for Xi Jinping ahead of the Communist Party’s third plenum: leader, page 9, and analysis, page 32.

Making heavy weather of hot weather

• Sweltering conditions are becoming increasingly common, page 48.
• But they needn't be deadly: leader, page 8.

The world this week Politics

• A disgruntled general led an attempted coup in Bolivia. Troops aligned with General Juan Jose Zimiga stormed the presidential palace in La Paz, the capital, before pulling back as momentum slipped away. Some Bolivians also took to the streets to condemn the coup attempt. Luis Arce, the president, called for international support. General Ziiniga had been sacked recently after he said he would stop Evo Morales, a former leftist president, from running for office again in next year’s election.
• Juan Orlando Hernandez, who was president of Honduras from 2014 to 2022, was sentenced to 45 years in prison by a judge in Manhattan for enabling the transport of cocaine to the United States. Mr Hernandez took millions of dollars in bribes, telling friends that he would stuff cocaine “right up the noses of the gringos”.

It’s not so jolly now for Mr Joly

• The first contingent of peacekeepers from Kenya arrived in Haiti. The peacekeeping force had been delayed as the Kenyan government hesitated over its deployment. Observers wonder whether the mission, which will include troops from other countries, will be able to rein in Haiti’s brutal gang warlords. One of those warlords, Germine Joly, was sentenced to 35 years in prison by a court in Washington, DC, after pleading guilty to charges of trafficking arms and laundering ransom payments.
• In Canada Justin Trudeau’s Liberal Party suffered a shock defeat in a by-election fora parliamentary seat in Toronto, a city that the Liberals dominate. The Conservatives narrowly won the seat, which the Liberals had held since 1993. The result has raised questions about how long Mr Trudeau can remain prime minister.
• Moderate Democrats ousted a left-wing congressman in a primary election in New York. Jamaal Bowman, one of Congress’s progressive “Squad”, was defeated by George Latimer in a race that turned on Mr Bowman’s outspoken criticism of Israel. It was the most expensive Democratic congressional primary ever. The American Israel Public Affairs Committee alone spent nearly $15m on ads opposing Mr Bowman.
• Julian Assange, the founder of WikiLeaks, struck a deal with American prosecutors, pleading guilty to one charge of breaking the Espionage Act. In 2010 WikiLeaks released hundreds of thousands of classified documents containing sensitive information about operations in Afghanistan, Iraq and elsewhere. Mr Assange spent five years in a British prison as his extradition case trundled on. He was flown to the Northern Mariana Islands, an American territory, where he pleaded guilty to the charge before being allowed to return to his native Australia.
• Israel’s Supreme Court ruled that ultra-Orthodox religious students must serve in the armed forces, overturning an exemption that traced its roots back to the founding of Israel. Binyamin Netanyahu, the prime minister, was trying to find an incremental solution to the issue, in part to appease the two ultra-Orthodox parties in his coalition. They are furious with the ruling.
• Around half a million people in Gaza face catastrophic levels of acute food insecurity, including starvation, according to the IPC, an international body that works with NGOs. Almost the whole population faces problems securing food.
• At least 23 people died in Nairobi, Kenya’s capital, protesting against a raft of new taxes on everyday items, including bread. After the demonstrations were met with rubber bullets, tear-gas and deadly force, the protesters set fire to the parliament building, governor’s office and city hall. William Ruto, the president, promptly withdrew the taxes.
• Namibia’s high court struck down colonial-era laws that criminalised gay sex between men. The judges ruled that the law banning sodomy and “unnatural sex” between men was discriminatory. (There are no laws prohibiting sex between women.) The judgment is a rare victory forgay rights, which are being rolled back in several parts of Africa.
• Islamist extremists attacked churches and synagogues in the Russian republic of Dagestan, where 80% of the population is Muslim. At least 21 people were killed, including a priest. Most of the dead were police officers. Last October a mob rampaged through Dagestan’s airport in an attempt to kill Jews on a flight from Israel.

Trying to join the club

• In a highly symbolic move, Ukraine and Moldova began formal talks with the European Union to accede to the bloc. The initial negotiationsallow the EU to present both countries with a framework for the reforms that are required to gain entry. A final decision is probably years away. Separately, Mark Rutte, the outgoing Dutch prime minister, was confirmed as the next secretary-general of NATO.
• Volodymyr Zelensky removed Lieutenant General Yuriy Sodol as commander of the Ukrainian army’s joint forces. Hours earlier the chief of staff of the Azov national guard brigade accused General Sodol of incompetence, claiming he was responsible for the death of more Ukrainian soldiers than Russia.
• The International Criminal Court in The Hague issued arrest warrants for Sergei Shoigu, Russia’s defence minister until last month, and Valery Gerasimov, the senior commander of Russian troops in Ukraine. The ICC said there were reasonable grounds to believe the pair ordered attacks on Ukrainian energy infrastructure, and that the consequential harm to civilians was “clearly excessive” to any military objective.
• Evan Gershkovich went on trial in Russia. The journalist from the Wall Street Journals accused of espionage, a claim rejected by America. Russia has suggested it would exchange Mr Gershkovich in a prisoner swap with America.
• Arvind Kejriwal, the chief minister of Delhi and a prominent Indian opposition figure, was arrested by one of India’s main anti-corruption bodies. He was already being detained on related charges brought by another corruption agency. The new arrest came hours before the Supreme Court was due to hear Mr Kejriwal’s plea for bail, which he will re-file. Mr Kejriwal insists the charges are politically motivated.
• Om Birla was elected speaker of India’s parliament, as the opposition forced the first contest for the job since 1976. Mr Birla comes from the Bharatiya Janata Party, which lost its overall majority at the recent general election. Rahul Gandhi, from the Congress party, was selected as official leader of the opposition, a constitutional position that has been vacant for a decade.

The world this week Business

• The Federal Reserve released the results of its annual stress tests, which assess how banks would cope with a severe global recession and meltdown in the property market. All 31 of the banks, including Bank of America, JPMorgan Chase and Wells Fargo, passed the Fed’s baseline scenario, meeting their minimum capital ratios, though the aggregate ratio, a cushion against losses, fell from 12.7% to 9.9%. The bank’s combined hypothetical losses reached $685bn.
• Lufthansa announced that it would pass on the cost of complying with new emissions regulations to passengers. The German airline will introduce an “environmental-cost surcharge” of between €1 and €72 ($77) on flights that depart from the EU, Britain, Norway and Switzerland after December 31st. Lufthansa said this was to help cover a European rule ensuring that at least 2% of airlines’ fuel consumption comes from more-expensive sustainable aviation fuel, as well as other green tape.

Stalled engines

• Airbus’s share price plunged by 10%, after it slashed its profit forecast because of supplychain problems that have left it with a shortage of aircraft engines. It is now aiming to deliver 770 commercial planes this year, down from a previous estimate of 800.
• The European Commission accused Microsoft of breaching antitrust rules by tying its Teams communications product into its Office software. The commission says Microsoft did not offer customers a choice on whether they wanted Teams. The accusations form part of a preliminary response to a complaint lodged by Slack. Microsoft has already taken steps to tackle some of the issues, and said it would try to answer the commission’s remaining concerns.
• In another preliminary finding, the commission accused Apple of preventing App developers from steering consumers towards alternative channels for content at its App Store. Apple responded that it had made a number of changes to comply with the EU’s new Digital Markets Act. The company is postponing the roll-out in the EU of new artificialintelligence features for the iPhone because of “uncertainties” in competition rules.
• Nvidia’s stint as the world’s most valuable company didn’t last long. The chipmaker’s share price fell over several days, wiping hundreds of billions of dollars off its market value. At one point the stock was 13% down from its peak. The decline may have been caused by investors cashing in gains from the stock’s extraordinary recent rise. News that Jensen Huang, Nvidia’s chief executive, sold a tranche of his shares may also have contributed to the sell-off. Enthusiasm for the stock wras soon rekindled, and the stock climbed again in subsequent trading.
• Argentina fell into recession again. The economy shrank by 2.6% in the first quarter over the previous three months. On a year-on-year basis GDP was 5.1% smaller. The unemployment rate surged to 7.7%.
• Volkswagen created a joint venture with Rivian, and will invest $5bn in the maker of electric vehicles. Rivian, best known for supplying Amazon with delivery vans, will share its technical expertise and software with VW, which faces a big challenge in Europe from cheaper Chinese EV imports. The deal is a potential lifeline for Rivian, which reported a net loss of $1.4bn for the first three months of the year.

The Big Apple in a jam

• New York has the most traffic congestion of any city in the world, according to a survey by INRIX, a data-analytics firm. NewYorkers spent 101 hours stuck in traffic last year, though London, Paris, Mexico City and Chicago were not far be hind in terms of time wasted. New York’s plan to introduce a congestion charge was recently put on hold by New York state’s governor. INRIX calculates that vehicles in downtown Manhattan crawl along at a speed of 11 miles an hour(18kph) during peak morning periods.
• After several setbacks the robotaxi industry took a big step forward, as Waymo opened its service in San Francisco to everyone following trials of limited numbers of passengers. The city is only the second in America (Phoenix is the other) where Waymo’s self-driving fleet is available to all. Some 300,000 San Franciscans have signed up.
• Chapel Down, Britain’s biggest winemaker, said it was considering a sale of the business as one option to fund its long-term growth. Known for its sparkling wine, the company listed on London’s AIM stockmarket in December. A warming climate has helped Britain’s vineyards: yields in 2023 were the highest ever. GB Wine estimates that production rose from 5.3m bottles in 2017 to 20m-22m in 2023, still a drop in the barrel compared with France’s 7bn-8bn bottles.

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