Friday, July 1 2022

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Germany fears that Russia is taking advantage of maintenance of its main gas export pipeline to completely cut off the country’s gas supply, raising the risk of a winter energy crisis in Europe’s largest economy.

Earlier this month, Moscow cut gas flow through Nord Stream 1 by 60%. The pipeline, one of Russia’s main gas conduits to Europe, will be closed for two weeks from mid- July for annual work.

German officials have said they are concerned that Gazprom, the Russian state-owned gas giant, could completely cut off gas deliveries while NS1 is under repair, undermining efforts to fill gas storage before the winter.

“The supply situation is tight enough without NS1 being shut down” – official

The fears over NS1 come as Berlin and other European capitals realize that Russia is militarizing its energy exports in retaliation for EU sanctions over the war in Ukraine.

Chancellor Olaf Scholz has ruled out a return to any normal relationship with the Kremlin, days after his foreign policy adviser made waves with comments about Berlin’s future ties with Moscow.

Learn more about the war in Ukraine

  • It could be a cold winter: The International Energy Agency has warned that Europe must prepare for a complete shutdown of Russian gas exports.

  • “Suicide” strike: A fire has broken out at an oil refinery in southern Russia after a drone attack, state media reported yesterday.

  • NATO: Estonia would be “wiped off the map” according to the current plans of the transatlantic alliance in the event of a Russian attack, according to its Prime Minister.

Thank you for reading FirstFT Europe/Africa. Here’s the rest of the day’s news — Jennifer

1. Railway chief threatens to circumvent union with reforms Network Rail chief executive Andrew Haines has threatened to scrap the striking RMT union and go straight to staff to push through reforms if there is no progress in the talks as further industrial action is scheduled today.

  • Go further: The massive strike has highlighted how the coronavirus has wrecked the sector’s finances, with passenger numbers yet to recover.

  • In other union news: Rishi Sunak has defended the government’s decision to raise the basic state pension in line with inflation as teachers’ unions threatened to strike over wages.

  • Opinion: Business leaders should consider public sector strikes in their own wage negotiations, writes Cat Rutter Pooley.

Thank you to everyone who participated in yesterday’s survey. Fifty-seven percent of respondents did not support the strikes, while 36 percent did.

2. Emmanuel Macron calls for compromise The French president has urged his opponents to end the country’s political stalemate by joining his minority government in passing laws in parliament, although he acknowledged that now was not the time for a broad government to ‘unity.

3. Fed Chairman: US Recession “A Possibility” Jay Powell said avoiding a downturn largely depended on factors beyond the central bank’s control, acknowledging in testimony before the Senate Banking Committee that it was becoming increasingly difficult to stamp out the surge in the economy. inflation while maintaining a strong labor market.

4. Jacob Zuma banned a spy agency from investigating Guptas The former South African president manipulated the agency to cover up alleged corruption by his allies and the Gupta business family, according to a judicial inquiry into the biggest scandal of the post-apartheid era.

5. Quantitative hedge funds profit from the crypto turmoil A small group of algorithm-based hedge funds have reaped gains from the rapid decline in digital assets such as bitcoin and luna as the turmoil that wiped billions of dollars off the value of cryptocurrencies created a lucrative opportunity.

The day ahead

Elections Voters in Britain head to the polls – on the sixth anniversary of the Brexit referendum – in two former Tory seats, Wakefield plus Tiverton and Honiton, in what is seen as a test of Boris Johnson’s disapproval over the partygate scandal. Grenada also holds general elections.

Fed stress test results The US central bank’s annual test, which involves doomsday scenarios for 34 banks including Goldman Sachs and JPMorgan Chase, is a crucial indicator of financial strength and helps determine how much capital lenders will be able to spend on dividends or redemptions.

  • Other economic news: The IHS Markit and S&P Global flash composite (industrials and services) purchasing managers’ indices are out for the Eurozone, France, Germany, the US and the UK, which also releases sector financials public and its GfK consumer confidence survey for the month of May.

FedEx Revenue The US delivery giant reports its fourth quarter results, which were anticipated last week with the announcement of a dividend increase and two new board members.

What else we read

The food crisis is raging across Africa Sharp global increases in food, fuel and fertilizer prices since Russia’s invasion of Ukraine have deepened the economic pain of the coronavirus pandemic and left millions of Africans facing an “unprecedented food emergency “, warned the World Food Program. It has also increased the risk of social unrest in poorer countries.

How ‘Vice Signaling’ Swallowed Electoral Politics Politicians around the world have always flattered. But lately, the political stunts, from former US President Donald Trump’s border wall to British Prime Minister Boris Johnson’s Rwandan flights, have taken a darker turn, writes Stephen Bush.

Putinism delays a reformist turn Change is coming to Russia. Precisely, ‘the Great Change’ – the name of a youth movement the Kremlin is building under Vladimir Putin, whose presidency has been defined by domestic repression and mind manipulation, writes Tony Barber.

Biden’s blues The 79-year-old US president’s ratings were already poor before the midterm elections in November. Now, with Federal Reserve rates rising and the risk of a recession looming, a more ominous reality faces Joe Biden: He may have already spent his political capital.

It’s all about the money, silly Like governments, many golfers are in it for the money. Certainly, a country can claim that money creates jobs. But unlike governments, golfers don’t provide missiles and helicopters, and big stars don’t care enough about human rights abuses – like their governments, writes Robert Shrimsley.

Work & Careers

In this week’s Working It podcast, Andrew Hill, Business Editor, talks to best-selling author Daniel Pink, whose book The power of regret urges us to think differently about our regrets at work and reframe our past. For a deeper dive, sign up for our Work newsletter.

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