Economy
EU leaders resolve to boost economic security amid global tension
© Reuters. A European Union flag flutters outside the congress palace ahead of the European Political Community summit in Granada, Spain, October 4, 2023. REUTERS/Jon Nazca
By Belén Carreño
GRANADA, Spain (Reuters) – European Union leaders resolved on Friday to strengthen the bloc’s competitiveness, be at the forefront of new green and digital technologies and reduce its reliance on third countries, notably China.
In a declaration at the end of an EU summit in Spain, the leaders said the COVID pandemic and Russia’s invasion of Ukraine in February 2022 had tested the bloc’s resilience and the EU needed to boosts its competitiveness.
They agreed that the 27-nation EU should bolster its single market, reduce external dependencies in digital and green technologies, raw materials and critical medicines, and boost investment in research and skills.
“We will strengthen our position as an industrial, technological and commercial powerhouse, putting a special focus on areas of high added value where we already have a competitive edge or can become a frontrunner,” the declaration read.
The Granada declaration should steer discussions in the coming months on European Commission proposals that could lead to tighter control of exports and outflows of technologies, particularly those that could be put to military use.
The EU executive plans to work with the 27 EU members to assess by the end of the year whether there are any risks to the bloc’s economic security linked to advanced semiconductors, artificial intelligence, quantum technology and biotechnology.
It is part of the European Economic Security Strategy unveiled by the Commission in June that calls for strengthening the EU’s own internal market, fostering research, forging alliances with reliable partners, and using existing trade defence tools and considering new ones.
One use of those tools is an investigation to assess whether electric vehicles from China are unfairly benefiting from subsidies there. An EU source said it was likely to be followed by other inquiries into Chinese exports, such as wind turbines.
Part of the debate will centre on the degree to which countries are willing to harmonise their policies on national security and transfer certain powers to Brussels.
Another aspect will be the extent to which European markets should remain open to foreign companies. Countries such as Sweden and the Netherlands want more open markets, while others such as France has more focus on protecting domestic producers.
(This story has been refiled to update the headline)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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