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World

EU leaders set to rebuke Poland for challenging their integration

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Polish Prime Minister Mateusz Morawiecki delivers a speech during a debate on Poland’s challenge to the supremacy of EU laws at the European Parliament in Strasbourg, France October 19, 2021. Ronald Wittek/Pool via REUTERS

  • Polish court ruling questioned primacy of EU law
  • France, other Western member states say rules must apply to all
  • Warsaw has clashed with EU over rights of women, LGBT people
  • European parliament to vote on demand to cut handouts to Poland

BRUSSELS, Oct 21 (Reuters) – European Union leaders will pile pressure on their Polish counterpart on Thursday over a court ruling that questioned the primacy of European laws in a sharp escalation of ideological battles that risk precipitating a new crisis for the bloc.

The French president and the Dutch premier are particularly keen to prevent their governments’ cash contributions to the EU from benefiting socially conservative politicians undercutting human rights fixed in the laws of western liberal democracies.

French EU affairs minister said “the European project is no more” if joint rules stop applying.

“Poland puts itself in danger,” Clement Beaune said before national leaders of the bloc’s 27 member countries convened in Brussels. “Eventually, if dialogue does not work, we could resort to various types of sanctions.”

The European Parliament was voting on a resolution later in the day demanding the bloc cut EU handouts for Poland for violating democratic principles.

Polish Prime Minister Mateusz Morawiecki is set to defend in front of his peers the Oct. 7 ruling by Poland’s Constitutional Tribunal stating that elements of EU law were incompatible with the country’s constitution.

Morawiecki has already came under fire from EU lawmakers this week and the head of the Commission said the challenge to the unity of the European legal order would not go unanswered.

This, as well as other policies introduced by his ruling Law and Justice (PiS) party, are set to cost Poland money.

‘NOT TENABLE’

With the ruling, the PiS raised the stakes in years of increasingly bitter feuds with the EU over democratic principles from the freedom of courts and media to the rights of women, migrants and LGBT people.

A senior EU diplomat said such policies were “not tenable in the European Union”.

The Commission has for now barred Warsaw from tapping into 57 billion euros ($66 billion) of emergency funds to help its economy emerge from the COVID-19 pandemic. Warsaw also risks more penalties from the bloc’s top court.

Sweden, Finland and Luxembourg are also among those determined to bring Warsaw into line and have stepped up their criticism since PiS came to power in 2015 in Poland, the largest ex-communist EU country of 38 million people.

For the EU, the latest twist in feuds with the eurosceptic PiS also comes at a sensitive time as it grapples with the fallout from Brexit.

The bloc – without Britain – last year achieved a major leap in integration in agreeing joint debt guarantees to raise 750 billion euros for post-pandemic economic recovery projects, overcoming stiff resistance from wealthy states such as the Netherlands.

Morawiecki has dismissed the idea of leaving the EU in a “Polexit”. Support for membership remains very high in Poland, which has benefited enormously from funding coming from the bloc it joined in 2004.

But Warsaw – backed by Hungarian Prime Minister Viktor Orban – wants to return powers to national capitals and has lashed out at what it says are excessive powers held by the Commission.

While many have grown increasingly frustrated at failed attempts to convince Warsaw to change tack, German Chancellor Angela Merkel has long warned against isolating Poland and said ideological rows were better not settled in courts.

Her sway, however, is weakened as the veteran of more than 100 summits during her 16 years in power visits Brussels for what may be her last gathering of EU leaders before she hands over to a new German chancellor.

Beyond Poland, the leaders will also lock horns over how to respond to a sharp spike in energy prices, discuss migration, their fraught relationship with Belarus and the COVID-19 pandemic. ($1 = 0.8584 euros)

Additional reporting by John Chalmers, Gabriela Baczynska, Philip Blenkinsop, Michel Rose, Andreas Rinke, Sabine Siebold; writing by Gabriela Baczynska; Editing by Richard Pullin and Alex Richardson

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Business

Bundesbank chief Weidmann quits early with one last inflation warning

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German Bundesbank President Jens Weidmann attends the 29th Frankfurt European Banking Congress (EBC) at the Old Opera house in Frankfurt, Germany November 22, 2019. REUTERS/Ralph Orlowski

  • Weidmann to leave on Dec. 31
  • Had over five years left of eight-year term
  • A conservative policymaker, Weidmann was often in minority

FRANKFURT, Oct 20 (Reuters) – Bundesbank President Jens Weidmann, a relentless critic of the European Central Bank’s ultra easy monetary policy, will step down more than five years early, opening the door for Germany’s new government to pick a less confrontational successor.

Weidmann said he would leave for personal reasons on Dec. 31, just days after the ECB must make a crucial decision on winding down pandemic-era stimulus that has revived growth but also pushed inflation to its highest rate in over a decade.

Among the most conservative members of the ECB’s Governing Council, Weidmann often found himself in opposition to fellow euro zone policymakers during his decade heading the German central bank.

He even warned about inflation risks in his farewell message to Bundesbank staff on Wednesday, saying: “It will be crucial not to look one-sidedly at deflationary risks, but not to lose sight of prospective inflationary dangers either.”

The successor to Weidmann, a former economic advisor to Chancellor Angela Merkel, will be picked by a new German government, to be formed when coalition talks conclude.

ECB-watchers said potential Bundesbank chiefs include Claudia Buch, currently Weidmann’s deputy, economists Volker Wieland, Marcel Fratzscher, Lars Feld, Lars-Hendrik Röller, and current Bundesbank chief economist Jens Ulbrich.

Isabel Schnabel, an ECB board member, is also a potential successor, although she would need to quit her current role, which some argue is a higher-profile job.

“Isabel Schnabel is doing a fabulous job at the ECB but I could think of no one better than Schnabel to lead the Bundesbank at this juncture,” UniCredit economist Erik Nielsen said. “Perfect background and experience, and outstanding European and global respect.”

CONFLICT

After taking charge at the Bundesbank in May 2011 as the euro zone’s debt crisis raged, Weidmann was frequently in a minority at the ECB, voting against major policy moves pushed through by ECB chiefs Mario Draghi and Christine Lagarde.

In July, the 53-year-old was among a handful of policymakers that opposed the ECB’s pledge to keep interest rates at record lows until inflation stabilises at 2%.

While he has become less confrontational in recent years, his frequent criticisms made it difficult for the ECB to prop up public confidence in its policies and close a wide “trust gap” that opened up after the global financial crisis of 2007 on.

“A new Bundesbank president more in line with the ECB mainstream may make it easier to explain the rationale of ECB policies to the German public,” Berenberg economist Holger Schmieding said.

The ECB, the central bank for the 19 countries that use the euro currency, has battled with sluggish price growth for a decade, but inflation has risen sharply in recent months and data on Wednesday showed it hit 3.4% in September.

“I respect Jens Weidmann`s decision to step down from his position as President of Deutsche Bundesbank at the end of this year after more than 10 years of service, but I also immensely regret it,” ECB President Lagarde said on Wednesday.


Editing by Catherine Evans

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Technology

Google CEO sought to keep Incognito mode issues out of spotlight, lawsuit alleges

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Sept 24 (Reuters) – Google Chief Executive Sundar Pichai in 2019 was warned that describing the company’s Incognito browsing mode as “private” was problematic, yet it stayed the course because he did not want the feature “under the spotlight,” according to a new court filing.

Google spokesman José Castañeda told Reuters that the filing “mischaracterizes emails referencing unrelated second and third-hand accounts.”

The Alphabet Inc (GOOGL.O) unit’s privacy disclosures have generated regulatory and legal scrutiny in recent years amid growing public concerns about online surveillance.

Users last June alleged in a lawsuit that Google unlawfully tracked their internet use when they were browsing Incognito in its Chrome browser. Google has said it makes clear that Incognito only stops data from being saved to a user’s device and is fighting the lawsuit.

In a written update on trial preparations filed Thursday in U.S. district court, attorneys for the users said they “anticipate seeking to depose” Pichai and Google Chief Marketing Officer Lorraine Twohill.

The attorneys, citing Google documents, said Pichai “was informed in 2019 as part of a project driven by Twohill that Incognito should not be referred to as ‘private’ because that ran ‘the risk of exacerbating known misconceptions about protections Incognito mode provides.'”

The filing continued, “As part of those discussions, Pichai decided that he ‘didn’t want to put incognito under the spotlight’ and Google continued without addressing those known issues.”

Castañeda said teams “routinely discuss ways to improve the privacy controls built into our services.” Google’s attorneys said they would oppose efforts to depose Pichai and Twohill.

Last month, plaintiffs deposed Google vice president Brian Rakowski, described in the filing as “the ‘father’ of Incognito mode.” He testified that though Google states Incognito enables browsing “privately,” what users expect “may not match” up with the reality, according to the plaintiffs’ write-up.

Google’s attorneys rejected the summary, writing that Rakowski also said terms including “private,” “anonymous,” and “invisible” with proper context “can be super helpful” in explaining Incognito.

Reporting by Paresh Dave; Editing by David Gregorio

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World

Italy makes COVID health pass mandatory for all workers

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  • Private and public sector workers must have health pass
  • Draghi looks to boost vaccinations, blunt virus
  • Italy becomes a test case for rest of Europe
  • Minister says move puts country “in the forefront” globally

ROME, Sept 16 (Reuters) – The Italian government approved on Thursday some of the strictest anti-COVID measures in the world, making it obligatory for all workers either to show proof of vaccination, a negative test or recent recovery from infection.

The new rules will come into force on Oct. 15 in the latest effort by Prime Minister Mario Draghi’s broad coalition to persuade people to get inoculated and blunt contagion in one of the countries worst-hit by the virus.

Any worker who fails to present a valid health certificate will be suspended on no pay, but cannot be sacked, ministers told reporters after the cabinet approved the measures.

People who ignore the decree and go to work regardless will face a fine of between 600 to 1,500 euros ($705-$1,175). The sanction for employers will be 400-1000 euros.

“Nothing like this has been done in Europe … we are putting ourselves in the forefront internationally,” said Public Administration Minister Renato Brunetta.

He added that the government expected an “enormous” acceleration of jabs simply by the announcement of the decree, so that much of its desired effect could be achieved before it actually comes into effect in a month’s time.

While some European Union states have ordered their health workers to get vaccines, none have made the so-called “Green Pass” mandatory for all employees, making Italy a test case for the continent.

The pass was originally conceived to ease travel around Europe, but Italy was among a group of countries that swiftly also made it a requirement for those wanting to access venues such as museums, gyms and indoor dining in restaurants.

Draghi, who was not present at Thursday’s news conference, had previously faced resistance against his extension of the Green Pass from right-wing leader Matteo Salvini, one of the main stakeholders in his government.

However, Salvini’s League party is split on the issue and the cabinet finally approved the decree unanimously.

An employee shows her “Green Pass”, a document showing proof of coronavirus disease (COVID-19) immunity, in an office in Rome, Italy, September 16, 2021. REUTERS/Yara Nardi

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There have been sporadic protests aroundthe country in recent weeks against the growing pressure to get a jab, but most political parties as well as the main employers’ federation have backed the move, hoping it will prevent further lockdowns.

Union leaders have been more lukewarm, saying tests should be given free of charge to workers who refuse to be vaccinated, enabling them to remain on the job.

The government rejected this request, but said the price of tests would be capped at 15 euros for work purposes, significantly below the current cost.

VACCINES WORK

Italy has the second-highest COVID-19 death toll in Europe after Britain, with more than 130,000 people dying of the disease since the pandemic surfaced in early 2020.

Around 74% of its 60-million-strong population have had at least one COVID-19 shot and 68% are fully vaccinated, figures broadly in line with most other EU countries.

Underscoring the importance of jabs, Italy’s health foundation Gimbe said in a report on Thursday that almost all COVID-19 sufferers currently in hospital were unvaccinated.

The report said vaccines had helped reduce deaths in Italy by 96.3%, hospitalisations by 93.4% and intensive care admissions by 95.7%.

Italy in March ordered health workers to get vaccinated or face suspension. As of today, 728 doctors have been suspended, the doctors’ federation said on Thursday. It was not immediately clear how many nurses or carers had refused to comply.

A similar measure in France came into force on Wednesday. Health Minister Olivier Veran said on Thursday that around 3,000 health workers had been suspended for their failure to get vaccinated. read more

Additional reporting by Gavin Jones, writing by Crispian Balmer and Gavin Jones; Editing by Janet Lawrence

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World

UK to extend Northern Ireland’s Brexit grace periods

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LONDON/DUBLIN, Sept 6 (Reuters) – Britain plans to further extend post-Brexit grace periods on some goods imports to Northern Ireland, Brexit minister David Frost said on Monday, in a move designed to give London and Brussels more time for talks about trade with the province.

The fate of British-ruled Northern Ireland was the most contentious issue in Britain’s negotiations over its exit from the European Union, which was completed on Dec. 31, and it has continued to cause friction.

To avoid imposing a hard border on the island of Ireland, Britain agreed to leave some EU rules in place in its province of Northern Ireland and accept checks on goods arriving there from elsewhere in the United Kingdom.

London has since said the arrangement is not working and wants it changed, while the EU rejects renegotiating the treaty.

“To provide space for potential further discussions (with the EU), and to give certainty and stability to businesses while any such discussions proceed, the government will continue to operate the protocol on the current basis,” Frost said in a written ministerial statement.

“This includes the grace periods and easements currently in force,” he said.

The European Union took note of Britain’s plans, but said it was not pursuing further legal steps against London.

“At present, the Commission is not moving to the next stage of the infringement procedure launched in March 2021, and is not opening any new infringements for now,” the bloc’s executive said in a statement.

Officials in London and Brussels have been trying to prevent the dispute from escalating into a full-blown trade war.

The European Commission agreed in July to freeze legal action against Britain for making changes to the protocol that Brussels says breach the Brexit treaty.

London has now indicated it would prolong grace periods, suspending new checks on cross-channel trade due to kick in within weeks.

Ireland is a key player in post-Brexit trade talks and Irish deputy prime minister Leo Varadkar, speaking after a meeting with British Cabinet Office Minister Michael Gove, said he expected the British move to lead towards attempts to reach a more permanent solution.

“The expectation is that the United Kingdom will announce a further extension of the grace periods, not just in relation to Northern Ireland but also imports from the EU and Ireland into the UK,” Varadkar said in an interview with Irish state broadcaster RTE.

“It is important that we use the period of any extension that may occur really to get down to business and to try to put in place more permanent … arrangements to make sure that the protocol is made more workable,” Varadkar told RTE.

But Varadkar warned that any more permanent solution secured between London and Brussels would have to be within the confines of the existing agreement.

Varadkar said Gove had told him that Britain “doesn’t want to walk away from the protocol but does want to make it more workable”.

Irish Prime Minister Micheal Martin said last month he believed the issues could be resolved with the right political will. read more

Reporting by Conor Humphries in Dublin and James Davey in London, Sabine Siebold in Berlin; Editing by Michael Holden and David Clarke

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Business

Investors eye COVID-19 spread, Golden Cross to gauge U.S. dollar trajectory

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A U.S. dollar note is seen in front of a stock graph in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration

July 23 (Reuters) – A rally in the U.S. dollar has investors looking at a broad range of factors — from global COVID-19 infections to yield gaps — to determine whether the greenback will continue appreciating.

The dollar is up 4% from its lows of 2021 and is among the world’s best performing currencies this year, boosted by last month’s hawkish shift from the Federal Reserve, burgeoning inflation and safe-haven demand driven by COVID-19 worries.

Because of the dollar’s central role in the global financial system, its moves ripple out towards a broad range of asset classes and are closely watched by investors.

For the United States, a period of sustained dollar strength would be a double-edged sword, helping tamp down inflation by increasing the currency’s buying power while denting the balance sheets of exporters by making their products less competitive abroad.

On the other hand, dollar strength would continue pushing down currencies such as the euro and British pound, potentially giving a boost to the recoveries in those countries.

Here are several things investors are watching to determine the dollar’s trajectory.

THE DELTA VARIANT

Some investors believe the dollar – a popular safe haven during uncertain times – will rise if the Delta variant of COVID-19 spreads and risk aversion grows in markets.

COVID worries have already helped the dollar notch gains against the currencies of countries where the Delta variant is proliferating, including the Australian dollar and the British pound. Those gains could fade if coronavirus concerns ebb in coming months, however.

“We’re seeing a lot of risk factors and uncertainty across assets, said Simon Harvey, senior FX market analyst at Monex Europe. “Investors are looking at all these and saying that they’re going to find refuge in the dollar.”

GLOBAL GROWTH

While some investors are concerned the U.S. rebound is slowing, it still outpaces the bounce seen in Europe and other regions.

That gap in growth, illustrated by such metrics as stronger manufacturing sector growth and inflation, is among the factors putting upward pressure on the dollar, said Morgan Stanley’s James Lord in a recent podcast.

“There is a case still for the dollar to strengthen as we do see more divergence,” he said.

YIELD GAP

Though Treasury yields have recently slid, the gap between real yields on U.S. government debt and some foreign bonds has widened, raising the allure of dollar-denominated assets. Real yields represent the cost of borrowing after stripping out inflation effects.

The spread between the real yield on 10-year Treasury Inflation Protected Securities at “constant maturity” and those on their German counterpart, for instance, stood at 72 basis points late Thursday, up from 63 basis points two months ago.

POSITIONING SQUEEZE

Speculators’ net short positions on the U.S. dollar fell to their lowest level since March 2020 last week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on July 16.

“The most crowded trade in the world through the first quarter was the short dollar. We had, unquestionably, a squeeze on the way back,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

The dwindling bearish sentiment could mean there is less fuel for further dollar gains. At the same time, “the dollar and other currencies do tend to overshoot when they are correcting, in both directions,” Schamotta said.

GOLDEN CROSS

The Dollar Index’s (.DXY) 50-day moving average is close to crossing above its 200-day moving average and forming a chart pattern known as a “Golden Cross” that is seen as a bullish signal by those who follow technical analysis.

A Golden Cross “could herald another leg higher for the greenback,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

Reporting by Saqib Iqbal Ahmed; editing by Ira Iosebashvili and Richard Pullin

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Business

Dollar, yen on back foot as risk sentiment revives; Musk buoys bitcoin

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  • Risk appetite returns as strong earnings lift Wall Street
  • Euro firmer against dollar ahead of ECB policy decision
  • Musk hints Tesla will accept bitcoin as payment again

TOKYO, July 22 (Reuters) – The safe-harbour U.S. dollar and yen were on the back foot on Thursday, after pulling back from multi-month highs amid a recovery in risk appetite as strong earnings lifted Wall Street stocks.

Cryptocurrencies held gains after Tesla Inc (TSLA.O) CEO Elon Musk said the company would “most likely” resume accepting bitcoin for payment. read more

The dollar index , which measures the currency against six major peers, stood at 92.770 after pulling back from a 3 1/2-month high of 93.194 touched on Wednesday.

The yen traded at 129.950 per euro , from an almost four-month top of 128.610 earlier this week, and at 81.07 to Australia’s dollar , from a 5 1/2-month peak of 79.85.

“Strong earnings have swept away Delta concerns in the U.S.,” weighing on haven currencies, National Australia Bank analyst Tapas Strickland wrote in a note to clients.

“The consensus is that (the Delta strain) does not pose an immediate risk to the recovery,” delaying reopening by three months at the most as countries ramp up vaccination drives in response, he said.

Sterling traded at $1.3717, recovering from a 5 1/2-month trough of $1.35725 reached on Tuesday, despite rising Delta variant cases in Britain and confusion about the lifting of restrictions in England.

The Aussie changed hands at $0.7350, from an eight-month low of $0.72895 the previous day, even as coronavirus cases spiked despite half the Australian population being under lockdown. read more

The euro stood at $1.1789, rising off Wednesday’s 3-1/2-month low of $1.1752 ahead of a closely watched European Central Bank policy decision later in the global day.

Policymakers will implement for the first time changes to their strategy and are all but certain to promise an even longer period of stimulus to make good on its commitment to boost inflation. read more

Analysts generally see ECB dovishness weakening the euro over the medium-term.

“On balance, the ECB’s new inflation target suggests monetary policy will remain ultra‑accommodative for an even longer period of time,” which will act as a headwind for the euro, Commonwealth Bank of Australia strategists Kim Mundy and Carol Kong wrote in a research note.

“Indeed, we expect the ECB will be one of the last central banks under our coverage to tighten policy.”

In cryptocurrencies, bitcoin held Wednesday’s 7.9% jump – the biggest since mid-June – to trade just north of$32,000.

Rival ether traded slightly below $2,000 following a 12% surge.

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Currency bid prices at 0525 GMT

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Tokyo Forex market info from BOJ

Reporting by Kevin Buckland; Editing by Sam Holmes

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