Financial Times Europe - 10 03 2020

2020·17.38 MB·English

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WORLDBUSINESSNEWSPAPER
TUESDAY 10 MARCH 2020 EUROPE
3 Crude plummets 30% 3 FTSE and S&P battered 3 New York exchange triggers circuit breaker
Briefing
Saudi-Russia oil price war sends
iAontobuyWillisTowers
in$30bnall-sharedeal
Thesecondandthird-biggest
insurancebrokershaveagreeda
tremors through global markets
dealthatwillforgeanindustry
leaderinthelateststageofalong
consolidationprocess.Aonsaid
therewouldbe$800mof
synergies.
—PAGE11;LEX,PAGE10
iEUseeksTurkeyaccord
BrusselschiefUrsulavonder
S&P500 FTSE100 Stoxx600oil&gas S&PFT50S0Ee10n0ergy
Leyenhassaidtheblocwantsa
“future-proof”strategytohalt
-7.7% -7.7% -16.8% -187..62%%
conflictsatitsborderwith
Turkeyaheadofameetingwith
Oil price
RecepTayyipErdogan.
—PAGE4
iLatewavepropelledBiden
$52.59
FTanalysishasshownthatWhite
HousehopefulJoeBiden’sSuper
Tuesday
Tuesdaysweepwasdrivenby
Mar 3 8am voterswhodecidedonhimonlya
weekbefore.
—PAGE4;NOTEBOOK,
PAGE8;GIDEONRACHMAN,PAGE9
iAustraliasuesFacebook
Canberra’sprivacywatchdoghas
startedproceedingsagainstthe
platformovertheCambridge
Analyticascandal,inwhich
personaldatawereharvestedfor
politicaladvertising.
—PAGE4
iDorseystaysinElliottdeal
Theactivisthedgefundand
Twitterhaveagreedaceasefire
thatwillseeJackDorseykeephis
postaschiefexecutive,whilethe
companypreparesa$2bnshare
buyback.
—PAGE11;LEX,PAGE10
$36.25 iFalconeassetsfreeze
SaudiArabia’sdefacto
Ajudgehasmadeanorder
leaderPrinceMohammed
Monday againsthedgefundbossPhilip
binSalman
Falconeafterhefailedtopay
Mar 9 5pm millionsinfeestoalawfirmthat
MarketpricesaboveareintradayforS&P
GettyImages haddefendedhiminhigh-stakes
Low $31.02 battleswithregulators.
—PAGE14
Datawatch
FTREPORTERS Trumpplayeddowntheimpactofthe introducedin2013—was“anexclama- percentage point in an unscheduled investment strategist for State Street
virus,circuit-breakerslimitedthetrad- tionpointonhowbadthingsare”,said movelastweek,butinvestorsarestill GlobalAdvisors. Virus strains
Marketsreactedviolentlyyesterdayas ing of the biggest US stocks in an MikeKagan,aportfoliomanagerfor pricinginanadditionalcutthismonth “Themantrarightnowis:‘Youcan
Hospital beds per 1,000
SaudiArabiaembarkedonanoilprice attempttocalmpanickyselling. ClearBridgeInvestments. andashifttonear-zerointerestratesin forgetaboutreturnoninvestment,it’s inhabitants (2018)
warwithRussiathatsentpricesfalling Investors,bruisedbyweeksofsell- Italy’sFTSEMIBwashitespecially theUSbythesummer.SomeUKgov- return of investment. Will I get my
Japan
atthefastestpaceinthreedecades. offsinresponsetotheoutbreak,shifted hard,sheddingmorethana10thofits ernmentbondyieldsalsoturnednega- moneyback?’That’sallinvestorscare
South Korea
Pricesplunged30percentatthestart furtheroutofriskyassets,suchasequi- valueafter16mpeopleinthecountry’s tiveforthefirsttime. about,”saidAlexTedder,headofglobal Germany
ofAsiantrading,triggeringastringof tiesandhigh-yieldbonds,andintothe prosperousnorthwerelockeddownin SharesinUSoilmajorsExxonMobil equitiesforSchroders. France
stockmarketdeclinesthatlefttheS&P perceivedsafetyofgovernmentdebt. anefforttocontrolthevirusoutbreak. andChevronfellbymorethan10per ReportingbyKatieMartin, China
500andtheFTSE100downbycloseto8 “Injustovertwoweeks,investorsen- Governmentbonds,meanwhile,shot cent.TheUK’sBPtumbledbyafifthand PhilipGeorgiadis,AdamSamson, Italy
Spain
percent.“Atsuchatimeofuncertainty timenthasswungfromcomplacencyto higher,reflectinggrowinganxiety—as UKindependentPremierOilfellalmost RichardHenderson&ColbySmith
US
andpotentialvulnerabilitytotheworld panic,”saidPaulO’Connor,aportfolio wellasstrongexpectationthatcentral 60percent.Corporatebondmarkets Virus&oilreportspages2&3 UK
economy...playing Russian roulette manageratJanusHendersonInvestors. bankswillridetothemarkets’rescue,as alsopunishedUSoilexplorationgroups. EditorialCommentpage8 0 2 4 6 8 10 12
withtheoilmarketmaywellhavegrave “What started as a virus-driven de- theyhavedoneseveraltimessincethe “Noonehasaninformationadvan- RayDalio&MohamedEl-Erianpage9 Source: OECD
consequences,”saidFatihBirol,execu- riskinghasnowmutatedintoabroad- financialcrisisof2008. tagewhenitcomestocoronavirus.Asa Lexpage10 Thecoronaviruscrisiswillstretchhealth
tive director of International Energy based,multi-assetcapitulation.” While10-yearUSgovernmentbond result,thepaththatinvestorsaretaking TailRiskpage11 services.JapanandSouthKoreahavethe
Agency,theglobalbody. Thetriggeringofthe15-minutetrad- pricesrattledhigher,yieldssanktoa istotakeriskoffthetable,regroupand Oilindustryriskspage13 mosthospitalbedspercapita;theUK
Thespreadofcoronavirusalsostoked ingbreakinNewYork—thefirsttime recordlowof0.32percent.TheUSFed- re-evaluatewhenmoreclaritybecomes Marketsreportspage19 ranksamongcountrieswiththelowest
marketfears.WhilePresidentDonald themeasurehasbeenusedsinceitwas eralReservecutinterestratesbyhalfa available,” said Michael Arone, chief MarketsInsightpages20
Music stops for investors as aggressive,
debt-driven strategies near their finale
protectionin“longbonds”astheir “gating”theirfunds,orpreventing
OPINION portfoliossufferahitacrossequities. investorsfromsellingtheirholdings.
Manyportfolioswerealreadynursing Manyseasonedinvestorswillnote
Michael
lossesfrombigfallsoverthepasttwo thatmarketsultimatelybounceback
Mackenzie weeks.Andwhileanoilpricewarraises fromboutsofturmoil.Buyingthedip
thepressureonenergysharesanddebt, hasworkednomatterhowtoughtimes
Barclaysbosses’acquittal italsoreinforcesdemandforthesafety havelooked.Thescaleofyesterday’s
spurscallsforUKreform oflong-datedgovernmentbonds.The equitydeclinesisanecessary
fallintheUS’s30-yearTreasuryyield— developmentbeforemarketseventually
BigReadiPAGE7 Atsomepointthemusicstopsplaying from1.7tojust0.7percentinthepast stabiliseandrecover.Onesmall
forinvestors.Yesterday’ssteepdropin threetradingdays—suggestsinvestors consolationisthatthecombinationof
theoilpricesenttradersacross donotbelievecentralbankscanprevent ultra-lowinterestratesandoilprices—
Austria €3.90 Malta €3.70 equities,creditandemergingmarkets theworldfromsinkingintodeflation. alongwithgovernmentsboostingtheir
Bahrain Din1.8 Morocco Dh45
Belgium €3.90 Netherlands €3.90 rushingforthepausebutton. Bigmarketshake-outscanescalate spending—shouldstarttolifttheglobal
Bulgaria Lev7.50 Norway NKr40
Croatia Kn29 Oman OR1.60 overweeksasriskmanagerssubject economyinthenextfewmonths.
Cyprus €3.70 Pakistan Rupee350 Theinitialshockwasthecoronavirus portfoliosandtradingdeskstotighter “Thecatalystsforamarketturnare
CzechRep Kc105 Poland Zl20
Denmark DKr38 Portugal €3.70 outbreak’simpactontheglobal limits.Thereisalsotheprospectof morelikelytobesomecombinationof
Egypt E£45 Qatar QR15
Finland €4.70 Romania Ron17 economy.Thencametheblowofanoil increasedmargincallsontradersto peakinfectionrates,underweight
France €3.90 Russia €5.00 pricewar.Nextisescalatingfinancial increasecollateralontheirpositions.In positioningandverycheapmarkets,”
Germany €3.90 Serbia NewD420
Gibraltar £2.90 SlovakRep €3.70 contagion.Marketsarelikelytoburn turn,thatislikelytocompelthesaleof saysJPMorgan’sJohnNormand.
Greece €3.70 Slovenia €3.70
Hungary Ft1200 Spain €3.70 untilthefuelofhighdebtlevelsand sharesthathaveperformedstrongly Onthosemetrics,financialmarkets
India Rup220 Sweden SKr39 aggressiverisktakingisextinguished. untilnow.Amoretroublingsignfor facequiteawaitbeforethemusicstarts
Italy €3.70 Switzerland SFr6.20
Latvia €6.99 Tunisia Din7.50 Investorsareseekingatleastsome marketswouldbeassetmanagers playingagain.
Lithuania €4.30 Turkey TL19
Luxembourg €3.90 UAE Dh20.00
NorthMacedonia Den220
World Markets
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MSCI World $ 2149.29 2192.35 -1.96 Oil WTI $ 32.71 41.28 -20.76 Euro Libor 3m -0.52 -0.50 -0.02
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MARCH 10 2020 Section:FrontBack Time: 9/3/2020 - 18:57 User: simon.roberts Page Name: 1FRONT USA, Part,Page,Edition: EUR, 1, 1
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2 ★ FINANCIAL TIMES Tuesday10March2020
CORONAVIRUS
Europe tackles economic contagion
CORONAVIRUS
ROUND-UP
Germany pledges €12.4bn state investment while France calls for ‘co-ordinated response’
Warningoverpotential‘collapse’of
healthsystemsindevelopingworld
GUYCHAZAN—BERLIN GiuseppeConte,Italy’sprimeminis- tospendanadditional€3.1bneachyear issue—thewillingness,orotherwise,of
DAVIDKEOHANE—PARIS ter,saidRomewould“useallhuman between2021and2024onroads,rail- policymakersintheeurozonetogenu-
MARTINARNOLD—FRANKFURT
andeconomicresources”tocontainthe waysandaffordablehousing. inelydowhateverittakes,”saidKen Brazil’shealthministerwarnedthatthecoronavirus
Europeanleadershavesteppeduptheir outbreak and tackle what he called TheAssociationofGermanChambers Wattret,chiefEuropeaneconomistat wasthreateningtotriggerthe“collapse”ofhealthsys-
effortstogettogripswiththeeconomic “Italy’sdarkesthour”. of Industry and Commerce has IHSMarkit. temsindevelopingnations.LuizHenriqueMandetta,a
impactofthecoronavirus,withtheGer- So far the measures promised by demanded an immediate package of “Italy is heading for an economic, doctorandthehealthministerofLatinAmerica’slarg-
mangovernmentunveilingapackageof Europeancapitalshavefallenwellshort aid,includingtaxholidaysandeasier financialandlikelypoliticalcrisisand estcountry,toldtheFinancialTimes:“Thevirusmay
measurestohelpaffectedcompanies ofthe€200bnofspendingtheymobi- access to state support such as Kur- won’tbeabletomakeitthroughalone.” endupbeingmorelethaltothehealthsystemsthanto
and€12.4bninstateinvestment. lisedinresponsetothe2008financial zarbeitfunds,whileinarecentreport Expectationsofaneconomiccrisisin thepeople.”Heestimatedthattheoutbreakcouldcost
OlafScholz,financeminister,pledged crisisandhaveleftbusinessesandecon- the Federation of German Industries Italy have rippled through sovereign Brazil’shealthsystembetween$430mand$860m.
thatGermanywasprepared“todoeve- omistscallingformore. calledforapackageofshort-termmeas- bond markets, where the spread
rythingneededtostabilisetheeconomy Germany’smeasures,agreedaftera uresaswellas“medium-term,growth- betweenItalian10-yearbondyieldsand
andsecurejobs”,addingthatitwould seven-hourmeetingofthethreeparties promotinginvestmentandtaxreforms” German 10-year Bunds widened to
Regionallawmakerscallforsweeping
“ensure that there is always enough inAngelaMerkel’sgrandcoalitiongov- to“restorebusinessconfidence”. morethan2percentagepointsyester-
liquidityavailableforbusiness”. ernmentonSundaynight,aredesigned TheEuropeanCentralBankisunder day—itshighestlevelsincelastAugust. quarantineasIrancasualtytollrises
EUleadersareduetodaytodiscuss toaddressmountingcallsforhelpfrom growingpressuretofurtherloosenits MrLeMairetoldradiostationFrance
theirresponsetothevirusandUrsula German business. They came only already ultra-easy monetary policy Infothattheviruscouldpromptthe
vonderLeyen,EuropeanCommission hoursafterreportsthatthefirstGerman after inflation expectations fell to a Virusand Frenchgrowthratetofallbelow1per MembersoftheIranianparliamentfromanorthern
president, said yesterday that it was haddiedofthedisease. recordlow.Thedropinthemeasureof oilpricewar centthisyear,fromapreviousestimate provincecalledonPresidentHassanRouhanitoquar-
consideringalloptions. Thenewpackageprovidesliquidityto whereinvestorsexpectinflationwillbe Editorial of1.3percent. antinetheirregionasthenationaldeathtollgrew.
BrunoLeMaire,Frenchfinancemin- companies suffering a virus-related infiveyears’timetobelow1percentfor Comment, FranceispushingforEuropeanbank Lawmakersmadetheirpleaasshortagesofmedical
ister,saidthesituationrequiredaplan cashcrunchandexpandsaccesstoa thefirsttimeindicatesincreasingscep- page8;Opinion, regulatorstoshowleniencyovernon- equipment began to bite in the province of Maz-
page9;Lex,
ataEuropeanlevelandheexpecteda government-subsidisedschemeknown ticismthattheECBcanachieveitstar- performing loans to soften the eco- andaran,closetoTehran.Iran’shealthministrysaid
page10
“strong, massive and co-ordinated as Kurzarbeit, or “short-term work”, getforinflationtobecloseto2percent. nomicimpactofcoronavirus.Thisech- thatatotalof237peoplehaddiedfromcoronavirusin
SeeCompanies
response from Europe” after econo- whichisdesignedtoavertasharprisein “There’sanear-termpanicelementto SeeMarkets oesasimilarcallbytheItalianbanking thecountrywith7,161peopleinfected.
mistswarnedofaeurozonerecession. unemployment.Berlinhasalsoagreed this but there’s also a longer-term associationlastweek.
SixinmateskilledinItalianprisonriot
Eurozone. Monetary policy
ECB set to unveil
crisis response
insuranceassociation.“Isittemporary?
Financialmarketsarepricing
HowmanymonthsbeforeaV-shape
inaratecuttominus0.6% recoverystarts?” SixinmatesdiedafterariotinsideaprisonintheItalian
MsLagardeisalsograpplingwiththe townofModenaasunrestovergovernmentmeasures
atthemeetingonThursday questionofwhatactionthebank’sgov- tocontrolthevirus’sspreaderuptedinsidethepenal
erningcouncilcouldtakewhenmany system.Anumberofguardsinanotherprisonwere
observers believe it looks alarmingly takenhostageandlaterrescuedasinmatesexpressed
MARTINARNOLD—FRANKFURT shortofoptions. angeroverrestrictionsthatincludelimitingvisitsfrom
ChristineLagardewillonThursdaytake UnliketheFed,theECBhasnotlifted familiesandfriends.Thenumberofconfirmedcasesin
onhertoughesttestasheadoftheEuro- ratesfromtheirpost-2008financialcri- Italyroseabove9,172with463deaths.
peanCentralBankwhenitdecideshow sislows.Insteaditkeptcutting,most
to respond to coronavirus fears that recentlyinSeptembertoarecordlowof
havesentfinancialmarketsintoatail- minus0.5percent.AsMsLagardeher-
Sporting,summitandStPatrick’sDay
spinandthreatentocauseadeepeuro- selfsaidrecently,thishas“significantly
zonerecession. reducedthescope”tocutratesfurther. eventscancelledastravelcurbstighten
Asthefirstmajorcentralbanktohold PolicymakersacrossEurope,includ-
ascheduledpolicymeetingsincethefull ingtheECB,“stillhavelowerratesthan
impactofthevirusontheglobalecon- theUSanddonotneedtofollowtheFed Organiserscontinuedtohaltbigeventstocontainthe
omy took shape, the ECB president necessarily”, said Vítor Constâncio, virus.Dublin’sStPatrick’sDayparadeonMarch17was
mustonThursdayoutlinearesponse former vice-president of the ECB. cancelledandtheSixNationsrugbymatchbetween
aftertheUSFederalReserveenactedits “Somewilldoitthough,despiteevery- FranceandIreland,duetotakeplaceinParisthisSatur-
firstemergencyratecutsincetheheight onebelievingthattheeffectsarequite day,waspostponed.
ofthefinancialcrisisin2008. meagre.” ThesummitbetweenEUleadersandIndia’sNaren-
Untilonlyafewweeksago,ithad There is already a growing debate draModiwascancelledbecause“bothpartiesneedto
seemedtheECBwouldberespondingto about the adverse effects of keeping befocusedoncombatingthedisease”,theEUsaid.
abrighteningeconomicoutlook.After interest rates negative for many years
twoyearsofsagginggrowthandinfla- andeconomistsevendoubtanothercut
tiontheeurozoneeconomyseemedto woulddomuchtohelpwiththevirus’s
Thailandordersairlinestocarryout
beturningacorneratthestartofthis immediateimpact.
year, with rebounding factory orders “Whenyouhavenegativerates,you medicalexaminationofpassengers
andimprovingbusinesssentiment. areeffectivelytargetingbankreserves. Screening: region’s export-dependent economy. Anotherpossibilitywouldbetobulk
However,thatwasbeforethevirus Youdon’tneedaratecuttoallowover- Frenchpatients MsLagarde,however,hashintedthat uptheECB’sexistingprogrammeoftar-
spreadrapidlythroughmanyEuropean nightmarketratestodriftlowertempo- arechecked herfocusisonprovidingextraliquidity getedloanstobanksatsub-zerorateson Thailandputinplacestrictrulesrequiringairlinesto
countries,causingItalytolockdowna rarily,”saidLenaKomileva,chiefecono- inBordeaux. tothebankingandcorporatedebtmar- theconditionthattheyusethemtofund checkthehealthofpassengersfromSouthKorea,China,
quarterofitspopulationacrossmuchof mistatG+Economics. Below,Christine kets.Shesaidinarecentstatementthat lendingtosmallbusinesses.Finally,the HongKong,Macau,ItalyandIranbeforeallowingthemto
its prosperous industrial north while Complicating the picture for Ms Lagarde theECBwas“readytotakeappropriate ECBcouldwidenthetypesofcollateral boardflights.
triggeringasharpsell-offinfinancial Lagardearethedeepdivisionsinthe GeorgesGobet/AFP/Getty andtargetedmeasures”toaddressthe itacceptsfrombankstoincludemore SaudiArabia,meanwhile,saiditscitizensandforeign
marketsyesterday. ECB’sgoverningcouncil,whichblewup crisis. loanstosmallbusinesseshitbycorona- residentswouldnotbeallowedtotraveltoorfromOman,
ThevirusishittingexportstoChina intoapublicspatthelasttimeitcut Abigworryforeconomistsisthatthe virusdisruption. France,Germany,TurkeyandSpain.Irishbudgetairline
andthreatenstodisruptthesupplyof ratessixmonthsago.Somepolicymak- strainondisruptedbusinessescould “Financial strains that worsen the RyanaircancelledmoreflightstoItaly.
crucialpartsfromChina.Fearofconta- ersstronglyopposefurthercuts. leadtotheseizingupofcorporatedebt downturnareamajorrisk,”saidAdam
gion, school closures, event cancella- Thisallputsmorepressureonthe markets,wherelevelsofleverageand Slater,leadeconomistatOxfordEco-
tionsandtravelrestrictionsonworkers ECBtotakeaction;financialmarkets overall indebtedness have been nomics. “Central banks may have to Casessofar
arehurtingtourism,airlinesandleisure arepricinginafurtherratecuttominus rising. becomedirectlyinvolvedinproviding
companies across Europe, as well as 0.6percent. Onewaytoaddressthiswouldbeto bridgefinancingtokeyfirmsandsec- 111,400
investorandbusinesssentiment. ManyeconomistsbelievetheECBis expandtheECB’s€2.6tnassetpurchase tors,andinpushingbankstodolike-
“Theonebilliondollarquestionis: likelytocutratesinresponsetothe programme,whichwasrelaunchedlast wise.” Resultingin3,892deathsby18:00GMT
Source:JohnsHopkinsUniversity
howlongwillitlast?”saidJörgAsmus- sharpappreciationoftheeuroin year. The ECB could temporarily Headdedthatthismightrequirea
Readmoreatft.com/coronavirus
sen, a former ECB executive board recentweeks,whichthreatens increaseitssize,particularlybybuy- suspensionofEUfiscalrulestoallow
memberwhoisnowheadofGermany’s toputmorepressureonthe ingcorporatepaper. memberstatestorunhigherdeficits.
PR failure
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DONWEINLAND—BEIJING benefits and was having to pay high beenunderstrictquarantinesincelate “Internaldirectivesfrompresscon-
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cWfwostbiOnlhicfuaKarc“RTurqeticse?leIshuheudotTa—esaaaeli’namisnhntrndctaaagavteerennrsonfitdind.ceaottukeitesiouknssrcsi-fntr.edaipe”irislnd,gmeromimneenemWaimmeettctsamut’eaiosshtehsdmnuoharhars5vfteeoSneta5eairuusmrakadapntisntenpibinpCd!vbnet”aegihhaegHdloreutctfeperuwhrnoaodeloberlenesmaeetfsei—ioonaiuedno.p,sscthetwhhr,ctaanoeoehhvgavtsiwoeeersss- asoptmidllbneahofleeapuufoTBmrtpredrhonrdsuhacoeeeoueditrteprntengsetcshatmgpdrhrCihcgasianoMsea.oaenacvitnpnmesrh3hee.tad,rfefeXI0mbhoaft8ar0oliarhe0ueclr0satcsaa,nth0opnremsiiinf0hvodsctcpen0liatmarectn.aissshiaspeatisVpidgbemiaMstnInuieorpPntlbretotahaagyhnvlXfnfrai’tteisitsditsehmthyoasirhCeetpusaah:ahadutctrsaslbihorblanngorekeulalebdwidinooacloalbnilitkinbonenrtal.kddyyyyggl pfKf“haoSgwFqolglntefiaaioaiucar“TcbnsrHsaanunTdtthragsteaysgoguihleiseepdt,rt-n,aoeosuCdebpa,rwg”caCdon‘coayoigdaKCmoaeeidsnransyntneheoafemtttttddtbftnihhereriinpuaugrdteeaorraucec.’ntlhCsoarkaddtiMtsefihJtfshesehoiifsWtiroeesopneeuepesdnlruenadraodwle”isonhraurra,d”eoicwtraacnaeyusPrhpnlaitccaainhnrr’tsiestiteoiddamdghisotspjvessoenesKcwneorb,pac’rUo.irtsaentinn,.oMagtns,eMdgiafirnicafsd-rvraiwaMiesrceWsoHmltaGiamrffearto-saumutFdliiinnhvntoioguinygaeege---f,
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Tuesday10March2020 ★ FINANCIAL TIMES 3
OIL PRICE FALL
Saudi Arabia likely to suffer
Plunging stocks
Trump says cheaper fuel
for taking nuclear option
‘good for consumers’
responsetothecrisisdrewmorecriti-
DEMETRISEVASTOPULO—WASHINGTON
Kingdom set to slash spending, raise borrowing and endure double-digit deficit cismattheweekendaftertheUSsur-
Donald Trump blamed Russia and geon-generalandAnthonyFauci,the
Saudi Arabia for the plunge in US head of the US National Institute of
stocks,asheattemptedtoshiftatten- AllergyandInfectiousDiseasesanda
tionfromgrowingcriticismofhishan- memberofthecoronavirustaskforce,
dlingofthecoronavirusoutbreak. gaveconflictingaccountsofthenumber
“SaudiArabiaandRussiaarearguing oftestkitsthathadbeendistributed
overthepriceandflowofoil.That,and Californiawaspreparingforaninflux
theFakeNews,isthereasonforthemar- ofcasesyesterdayastheGrandPrin-
ketdrop!”MrTrumptweetedyester- cess,acruiseshipcarrying3,500pas-
day. sengers,wasexpectedtodockinOak-
AsthenumberofAmericanswiththe land.Theshipiscarrying21crewand
virushasgrown,theUSpresidenthas passengerswiththevirus.MrTrumpon
comeunderharshcriticismforhowhe Fridaysuggestedthathedidnotwant
istacklingthecoronaviruscrisis,partic- the ship to dock because it would
ularlyhisrhetoric,includingadvicethat increasethenumbersofreportedcases
contradictsUShealthauthorities. ontheUSmainland.
Againyesterday,MrTrumpplayed Some critics have compared his
downthescaleofthecoronavirusepi- actionstothewayGeorgeWBushdealt
demicandsaidthecollapseinoilprices withHurricaneKatrina,adevastating
wouldbe“goodfortheconsumer”by
loweringpetrolprices. ‘Thisis[Trump’s]
Inaseriesoftweetslashingoutatcrit-
Katrinaevent . . . He
ics,MrTrumpsaid37,000Americans
haddiedfromtheflulastyear,while isincompetentand
only22peoplehadsofarbeenkilledby
thisistheproof’
coronavirus.
“Nothingisshutdown,life&theecon-
omy go on,” he tweeted. “At this stormin2005thatkilledalmost2,000
momentthereare546confirmedcases people. The former president suffered
ofCoronavirus,with22deaths.Think politicallyforwhatwasviewedasinept
aboutthat!” managementoftheaftermath.
MrTrumpwasexpectedtomeethis “ThisishisKatrinaevent...Heis
economicteamattheWhiteHouseyes- incompetentandthisistheproof.We
terday afternoon to discuss ways to arewaybehindonthis,”TomSteyer,the
reducetheeconomicfalloutfromthe formerDemocraticpresidentialcandi-
coronavirusoutbreak. datesaid.
UShealthauthoritieshaveidentified MrFauciwarnedattheweekendthat
566casesofcoronaviruswith22deaths, peopleshouldbethinkingharderabout
Powerplay:abanneroutsideamallinJiddah,SaudiArabia,showsCrownPrinceMohammedbinSalman,left,andKingSalman mostofwhichwereinWashingtonstate, whethertoattendbigevents,asauthori-
—AmrNabil/AP
accordingtoJohnsHopkinsUniversity. tiesshiftedthefocusfromcontainment
MrTrumpsaidattheweekendthathe tomitigation,orstoppingthespreadof
ANDREWENGLANDANDANJLIRAVAL tomodernisewasstartingtopayoff. alreadybeentoldtocutspending,two it.Opecalonecannotdoit.Weneed was not worried about the situation, thevirus.
LONDON Petrodollarsarethecrucialdriverof peoplefamiliarwiththemattersaid. other producers.” When asked about even as several people in the area MrTrumphassaidhewillcontinueto
SIMEONKERR—DUBAI
economicactivityinthekingdom,and Yesterday government advisers were the country’s move to dramatically aroundtheUScapitalwerediagnosed holdralliesashecampaignsforre-elec-
ShortlyaftertalksbetweenOpecand withoilpricesnowtradingatabout$36 canvassingtheopinionsofbankersas reduceexportprices,hereplied:“What withcoronavirus. tioninNovember.ThetwoDemocratic
Russiacollapsedlastweekwiththepar- abarrel,economistsexpectthegovern- theydiscussedpolicyoptions. elseisthesolution?” TedCruz,aRepublicansenator,said contenders — Joe Biden, the former
tiesfailingtoagreeonoilproduction menttohavetoslashspending,delay FormanySaudisitwillrekindlepain- SaudiArabiadoeshavefinancialbuff- hewouldstayathomeinTexasafter vice-president,andBernieSanders,the
cutstopropupweakeningprices,Prince projects,increaseborrowingandbrace fulmemoriesofthelastoilslumpin ers in the short term, with foreign learningthathehadinteractedwitha Vermontsenator—havebothsaidtheir
AbdulazizbinSalman,SaudiArabia’s foradouble-digitbudgetdeficit. 2014.Alial-Naimi,thenoilminister, reserves of $502bn. But analysts say manwhotestedpositiveafterattending campaigns were co-ordinating with
energy minister, cryptically said the “Everybody[inSaudiArabia]issur- pursuedasimilarstrategyoframping thatifoilpricesremainatcurrentlevels theConservativePoliticalActionCon- localandstatehealthauthoritiesbut
kingdomwouldkeepmarkets“wonder- prised.Somesay‘wehadtoshowmus- up production in the hope volume itwillbeforcedtodipintothosesavings. ference, a four-day event held two that they did not intend to cancel
ing”aboutitsnextmove. cletoRussia,wearethebigguysinthe wouldoffsetpricedeclines.Thepolicy MonicaMalik,chiefeconomistatAbu weeks ago less than 20km from the events.
Theywerenotleftguessingforlong. room’.Ithinkit’sakindofbrinkman- failedastheeconomytanked.Abudget DhabiCommercialBank,saidtheking- White House. Mr Trump and Mike Six states, including Michigan and
Within24hours,Riyadhtookthedra- ship,butthere’sgoingtobeaheavy surplusbecamea$98bndeficitin2015. domcouldfaceanextra$60bninfund- Pence,hisvice-presidentwholeadsthe Washington,willholdprimariestoday,
maticdecisiontotriggeranaggressive priceforSaudiArabiaandotheroilpro- ingrequirementsthisyear,withthedef- White House coronavirus task force, withFloridaandOhioawardingtheir
pricewarthathaspushedcrudeprices ducers,”saidaSaudi-basedanalyst.“If ‘Iftheysatdownand icitatriskofdoublingto$100bnifoil also attended. The White House delegatesaweeklater.
totheirlowestlevelsinfouryearsand theysatdownandthoughtaboutthis remainsatcurrentlevelsandthegov-
thoughtaboutthis,
rockedglobalstockmarkets. and it was a rational decision, they ernmentmaintainsspending.
ThemoveisviewedbyOpecdelegates couldn’thavepickedaworsetime.” theycouldn’thave “Ifthepricewarcontinues,SaudiAra-
aspartpowerplay,partbrinkmanship Saudi investors have already dis- biawillhavetoretrenchspendingto Wealth fund
pickedaworsetime’
bytheworld’stopoilexporter,which playedtheiruneaseasthekingdom’s limitthefiscalshortfall,whichwillbe
Russia claims it has financial
hasspentthreeyearsspearheadingco- Tadawulindexhaslostmorethan15per painfulforthenon-oileconomy,”she
ordinationbetweenOpecandRussiato centinvalueoverthepasttwodays. RiyadhsealeditsagreementwithRussia said.“Thisisatatimethattheeconomy
trimoutputtokeepcrudepricesatrea- TradingwassuspendedinSaudiAra- in2016topropupcrudepricesbycut- needstogrowandcreatejobs.” firepower to survive fallout
sonablelevels.OnceMoscowrejected mcoyesterdayafteritssharesplum- tingproductioninwhatbecameknown RiyadhcouldstillbehopingMoscow
Riyadh’srequestfordeepercutsonFri- meted10percent.Thestateoilcom- astheOpec+alliance. willreconsider,analystssay.ButRussia
day, the kingdom took the nuclear pany’sstocksfellbelowtheirinitialpub- PrinceAbdulazizhaspursuedamore haslargerreserves,afree-floatingcur-
optiontofloodthemarketwithaddi- licofferingpriceforthefirsttimeon aggressiveapproachtothekingdom’s rencyandamorediverseeconomy.
tionaloilathugelydiscountedprices. Sunday—threemonthsafteritslisting relationshipwithRussiathanhisprede- Saudi officials were aware of Mos- MAXSEDDON—MOSCOW hadbecome“meaningless”forMoscow
With the coronavirus outbreak washailedbySaudiofficialsasahistoric cessor,Khalidal-Falih. cow’sreluctancetocontinuecutswhile in the face of increased competition
Russiasaiditcouldwithstandlowoil
heightening concerns about a global successforPrinceMohammed. Ahalf-brotherofthecrownprince, USsuppliesremainedrobust,meaning fromUSshaleproducers.
pricesforaslongasadecade,setting
recession and the oil price outlook ThesenseofuncertaintyinSaudiAra- PrinceAbdulazizbelievesMoscowhas Riyadhconsideredoframpingupout- Helima Croft, head of global com-
thestageforaprolongedbattlewith
already bleak, Riyadh’s calculation biahasbeenexacerbatedbyasweeping notfulfilleditssideofthedealbymak- putforsometime,analystssay. modities strategy at RBC Capital Mar-
SaudiArabiaaftertalksoverOpecpro-
appearedtobethatifMoscowwouldno crackdownthatcoincidedwiththeoil ingsubstantiveenoughproductioncuts “SaudiArabiaistakinganawfullybig kets,saidMrSechinwasalsomotivated
ductioncutscollapsed,leadingtothe
longerplayball,itshouldincreasevol- meetingandtargetedseniorroyalsin andwantstoreassertRiyadh’sauthority gamble.Itsstrategymaybeaimedat bytheUSdecisiontoimposesanctions
biggestone-dayfallinpricessincethe
umeandgrabmarketshare.Butitisa whatmanyviewaspartofthe34-year- overOpec+.Still,apersonfamiliarwith forcingRussiabacktothetable.Butif onRosneft’stradingarmlastmonthfor
1991Gulfwar.
high-stakes gamble that will damage oldcrownprince’sattempttoneutralise Saudienergypolicysaidthekingdom thatdoesnotwork—wedonotbelieveit helpingVenezuelatoselloil.
SaudiArabia’seconomy,justasofficials potentialrivals.“He[PrinceMoham- hadsoughtaconsensusamongproduc- will—thenthiscouldbeashiftofpro- Russia’sfinanceministrysaidyesterday “FornowitseemsthatSechinisnot
werehopingapick-upinnon-oilgrowth med] is feeling the pressure on all ers,evenassomeOpecdelegatessaid foundconsequencewithrepercussions itwoulddrawfromits$150bnnational seekingtoeliminatesimplythemarket
last year was evidence that Crown fronts,”saidakingdomexecutive. PrinceAbdulazizalienatedRussia.“The foroilproducersglobally,”saidAmrita wealth fund to boost government shareofUSshaleproducers,butthe
PrinceMohammedbinSalman’sdrive Government departments have realityisSaudiArabiaalonecannotdo SenatEnergyAspects. spendingwhileoilpricesremainedat aggressive US sanctions policy that
between$25and$30abarrel.Itsaidit Americanenergyabundancehasena-
couldcoverthelostrevenueforthenext bled,”MsCroftsaid.
sixto10years. “Nowwehaveachancenotjusttopro-
Crude crash Global producers count cost of Riyadh-Moscow spat Thecollapseintheoilprice,whichfell duceandsellasmuchasweneedto,but
asmuchas30percentonSundayafter tothrowAmericanshaleoverboard,”
SaudiArabiaretaliatedagainstRussia DmitryKiselev,thedirectorofRussia’s
withthreatstodiscountitscrudeand mainstatenewsagency,saidonsocial
boostoutput,pushedtheRussianrou- media.“Ourbudgetismuchmorestable
ANJLIRAVALANDDAVIDSHEPPARD WhydidRussianotco-operate? thatmakeupmostoftheUSshalesector tiallyaddmorethan1mbarrelsadayin bletoitslowestlevelagainstthedollar thanSaudiArabia’sandisreadyforlow
LONDON Russia said it wanted to see the full have hedged their output at higher thecomingmonths.Itcanalsopulloil sinceJanuary2016. oilprices,unlikethekingdom’s.”
Saudi Arabia’s move to fire the first impact of the coronavirus on oil prices.Supplyisunlikelytofallimme- outofstoragetoraiseexports. ButMoscowappearsconvincedthatit Yesterday’sfallintheoilpricehas
shots in an oil price war prompted demandbeforetakingaction. diately. Russia’sabilitytoboostitsoutputis isbetterpositionedthanRiyadhtoride seenRussiancompanieslosebillionsof
crude’sbiggestone-dayfallsincethe ButMoscowhasalsobeenkeentotest For President Donald Trump the probably more constrained. Lower outthepricedrop. dollarsinvalue.Rosneftstockfell22per
early1990sGulfwar.Butwhydidthe theUSshaleindustry.Itbelievescutting pricecrashhadposedaconundrum. prices could jeopardise President “Fornow,theyarecountingonthis cent in London, while gas producer
world’stopexporterdecidetomoveso outputwouldonlyhandalifelinetoa Loweroilpricesareanimportantpartof VladimirPutin’slonger-termpromises beingatemporaryscenario.Butsaying Gazpromdropped18percent.
aggressively,withdemandreelingfrom sectorwhosegrowthhasturnedtheUS hispitchtovoters,frequentlycallingon toinvestinareassuchasinfrastructure thisshowstheyarereadyforanything,” Russianoilproducerscouldcompen-
thecoronaviruscrisis?Andwhatdoesit into the world’s largest oil producer, Opectobringthemdown.Butapro- andsocialspending. saidSofyaDonets,chiefRussiaecono- sateforlowerpricesbyincreasingout-
meanforthewideroilindustry? gainingcustomersatRussia’sexpense. longedpricefallcouldspelleconomic SaudiArabiamayhavehopedthatthe mistatRenaissanceCapital. putbuthadonlylimitedcapacitytodo
USsanctionsonRussianenergycom- trouble for energy-producing states enormityofthepricefallwouldforce Vladimir Putin, Russian president, this,saidDmitryMarinchenko,anoil
WhatisbehindtheSaudimove? panies,includingthosethattargetedthe suchasTexasandNorthDakota. Russiatoreturntothenegotiatingtable, waspersuadedtobreaktheexistingdeal analystatFitchRatings.
SaudiArabiahadwantedtoleadOpec tradingarmofstate-backedoilcham- butthatseemsunlikely. withOpecaftermeetingdomesticoil “Russiacouldmanagetoincreasepro-
andRussiainmakingdeepercutstooil pionRosneftlastmonth,andattempts Willpriceskeepfalling? companies, which have opposed the ductionby250,000-300,000barrelsin
productiontosupportcrudepricesin tohalttheNordStream2gaspipelineto Hopesforanoilpricerecoveryinthe Whatdoesitmeanforbigoil? productioncutssincetheywereagreed thecomingmonths,orbyaround3per
thefaceofthecoronavirusoutbreak. Germany,haveinfuriatedtheKremlin. short-term have been pinned on the Afteroilpricescrashedin2014thelikes in2016,accordingtopeoplefamiliar cent—butthisseemstobeimmaterial
ButwhenRussiabalkedattheplan,the coronavirusoutbreakbeingcontained ofRoyalDutchShell,BPandExxonMo- withthetalks. compared to losses caused by lower
Gulfkingdomturnedonanallyithad WhatwillhappentotheUSshaleoil faster than expected. Traders have bilretrenched.Theycutcostsaggres- Rosneft,thestate-runoilcompany prices,”hesaid.
workedwithtopropuptheoilmarket industry? warnedthatglobaloildemandin2020 sively,soldoffassetsandstreamlined ledbyIgorSechin,aformerKGBagent MrPutin’sbetreliesonacalculation
since2016. Thepricecrashcameatadifficulttime couldcontractforthefirsttimesince operationstostayprofitableatloweroil andlongtimePutinconfidant,saidthe that the Russian economy is in a
Riyadhrespondedbyraisingproduc- forUSshale.Whileproduction thefinancialcrisismorethanadecade prices. But while they have become dealthroughwhichOpecmembersand strongerpositiontodaythanin2014,
tionandofferingitscrudeatsteepdis- hassoaredoverthepastdec- ago.Oilconsumptioncouldbeatleast more efficient, generating more cash Russiacutproductiontosupportprices whenasharpdevaluationoftherouble
counts. Analysts said that was an ade, leapfrogging that of 1to2percentlowerthisyearthan whenpricesaveragedaround$65abar- forcedthecentralbanktobailoutstate
attempttopunishRussiaforabandon- Russia and Saudi Ara- what analysts had expected at the reloverthepasttwoyearsthanwhen lendersafterRosneftrefinanced$18bn
ingtheso-calledOpec+alliance.Saudi bia, the industry has startoftheyear. theytradedat$100,theynowfacedif- inforeigncurrencydebt.
Arabiamayalsohavewishedtocement burntthroughborrowedcash, Butwiththepossibilityofthe ferentpressures. Russiahas$570bninforeigncurrency
its position as the world’s top oil alienatinginvestors. coronavirusdevelopinginto Companieshavebeendesperateto reserves,comparedwithSaudiArabia’s
exporter,analystsadded. Thathasleftitvulnerabletoa aglobalpandemic,crude’s maintain dividends and payouts to $502bn,anditcanbalanceitsbudgetat
“TherewasaconsensusamongOpec dropinprices.Thehugeoilprice short-termprospectslook shareholdersunsettledbypredictions anoilpriceof$42perbarrel—about
[tocutproduction].Russiaobjectedand fallsincethestartoftheyearhas bleak. oildemandcouldpeakinthenextdec- halfthatofSaudiArabia.
hassaidthatfromApril1,everyonecan thrownany Muchdependsonhow ade. At the same time they need to That includes the national wealth
producewhatevertheylike.Sotheking- remaining aggressivelySaudiAra- reduce debt and look to new energy fund,whose$150bnvalueisequivalent
dom,too,isexercisingitsright,”saidone expansionplans bia increases produc- sourcessuchasrenewables,fearinga to9.2percentofgrossdomesticprod-
personfamiliarwithSaudioilpolicy. intodoubt. tion.Ithasmorespare long-termshiftawayfromfossilfuels. uct. Those reserves could provide
Analystshavequestionedthewisdom The hit to produc- capacity than any Withoilatlessthan$40abarrel, $1.7bnamonthforthenextdecade,ifoil
ofSaudiArabia’sapproach.Itseconomy tion,however,maybe other country, so it manyinvestorsdoubtthisispossible. prices remain at current levels.
isnotimmunetoapricecrash,evenifit muted.Manyofthesmall can boost output Sharepriceswillprobablycomeunder Feelingthechill:sharesinGazprom Additional reporting by Nastassia
believesitcanwinmarketshare. independent producers quickly and poten- pressureinthecomingdays. dropped18percentyesterday Astrasheuskaya
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INTERNATIONAL
Refugees Privacy scandal
EU seeks ‘future-proof ’ deal with Erdogan Australia
watchdog
sues Facebook
Brusselssuspectsborder Askedabouttheprospectofaboostto derwithGreece.Thousandsofrefugees theirrefusaltostartgivinggroundtoMr clearlyaboutthefactthatwhathap-
clashesare‘politically the EU’s €6bn 2016 agreement with andasylumseekersmadetheirwayto Erdogan,aboutmorecashorvisaliber- pened last weekend cannot happen over personal
Turkey on refugees, she said talks Europe’slandandseafrontier,trigger- alisation,underthethreatof“black- again.Weneedafuture-proofstrategy
motivatedpressure’ betweenthepartieswouldcover“allthe ingalarminEuropeancapitalsevenas mail”. togethertomakesurethesekindsof
data breach
topics”andthattheprocesswasonly Athenspreventedthemajorityofpeo- MsvonderLeyensaidyesterdaythat escalationsattheGreek-Turkishborder
beginning. While some EU states, plefromcrossing. Europewascaughtonthehornsofa donothappenagain.”
SAMFLEMING,MICHAELPEELAND
includingGermany,supportdiscussions “deepdilemma”.Therewasanurgent Turkey,whichishometo3.6mpeople
JIMBRUNSDEN—BRUSSELS
LAURAPITEL—ANKARA on more money, many others are Commissionpresident need to relieve the “tension and the from Syria, argues that Europe has
TheEUwantsa“future-proof”strategy opposed,andseveralhaveaccusedTur- pressure”ontheGreek-Turkishborder, failedtocarryitsshareoftheburdenin JAMIESMYTH—SYDNEY
vonderLeyensaysEurope
topreventrenewedescalationsatits keyofattemptingtoblackmailtheEU. shesaid. caringforrefugeesfleeingtheSyrian
Australia’sprivacywatchdogissuing
border with Turkey, Ursula von der Turkeyisstillformallyintalkstojoin iscaughtonthehorns DiscussionswithMrErdoganmarked conflict.
Facebook over its role in the Cam-
Leyensaidasseniorofficialsfromthe theEUthatbeganin2005butrelations theresumptionofdialoguebetweenthe ItaccusestheEUofbeingslowtopay
ofa‘deepdilemma’ bridge Analytica scandal, which
blocandNatopreparedtomeetRecep betweenthetwosideshavebeendeteri- sidesthatshehopedwouldleadtoa outthemoneypromisedunderthe2016
involvedharvestingthepersonaldata
TayyipErdoganinBrussels. oratingforyears. “roadmap”toasolution. dealandfailingtoupholdothercom-
oftensofmillionsofpeoplefromthe
TheEuropeanCommissionpresident MrErdoganwasdueinBrusselsfor OnFriday,Europe’sforeignministers “Ontheonehand,weacknowledge mitmentsintheagreement,including
social media platform for political
saideventsattheGreek-Turkishborder talkslastnightwithMsvonderLeyen rebuffed Turkish demands for more thefactthatTurkeyisdoingagreatdeal, visa-freetravelforTurkishcitizensto
advertisingpurposes.
pointedto“politicallymotivatedpres- and Charles Michel, the European financialaidunderthe2016migration islookingaftermillionsofrefugees,with Europe’sSchengenarea.
sure”andthatitwasnecessarytodo Councilpresident,justoveraweekafter dealstruckaftermorethan1mpeople ourhelpaswell,butprimarilyTurkeyis MrErdoganalsowantsEUsupportfor TheOfficeoftheAustralianInforma-
everythingpossibletoensurethesitua- theTurkishpresidentannouncedthat arrivedbyMediterraneanroutesinthe lookingafterthesemillionsofpeople,” Turkey’splantocreatea“safezone”for tionCommissionersaidyesterdaythat
tioncalmeddown,andthatreliablehelp he had opened his frontiers with EUthepreviousyear. thecommissionpresidentsaid. refugeesinaswathofTurkish-control- ithadstartedlegalproceedingsinthe
wasprovidedforthoseatthefrontier. Europe,leadingtoaflare-uponthebor- TheEuropeansareholdingfirmon “Secondly, we need to talk very ledterritoryinnorthernSyria. FederalCourt,allegingFacebookhad
seriouslyandrepeatedlycontravened
privacylawbyexposingusers’datato
Cambridge Analytica, a political
Biden attracted previously undecided voters Sanders’ strongest demographic did not turn out in force on Super Tuesday researchfirm.
“Weclaimtheseactionslefttheper-
Per cent, by when voter decided who to vote for in Per cent of voters, all Super Tuesday primaries on Mar 3 2020
sonaldataofaround311,127Australian
Super Tuesday primary on Mar 3 2020 Facebookuserstobesoldandusedfor
Width shows age group as a share of all voters Width shows race as a share of all voters
All Super Tuesday primaries purposesincludingpoliticalprofiling,
100 100 100 welloutsideusers’expectations,”said
AngeleneFalk,Australia’sinformation
andprivacycommissioner.
Sanders
Sanders TheAustraliancaseisthelatestina
Sanders seriesoflegalchallengesfacingtheUS
social media group, which has paid
Warren
75 75 75 morethan$5bninfinesrelatedtothe
Warren
misuseofusers’dataintheCambridge
Other Analyticascandal.
Other
Warren Underexistinglaws,Australia’sFed-
eralCourtcanimposeacivilpenaltyof
Bloomberg
uptoA$1.7m($1.1m)foreachserious
50 Bloomberg
50 Other 50 and/or repeated interference with
privacy.
Thescandaleruptedin2018whenthe
Bloomberg
UK’sObservernewspaperrevealedthat
Facebookuserdatawereleakedtothe
25 politicalresearchfirmthroughathird-
25 25
partyapp,whichenabledcampaignsto
Biden
targetindividualswithads.
Biden
Biden Sincethescandal,Facebookhasfaced
abarrageofcriticismfromregulators
0 andpoliticiansinEurope,theUSand
0 0 elsewhere, and accusations that the
Decided before In In past
companynotonlymisuseduserdata
February February week 30 to 44 45 to 64 65 and over White Black
18 to 29 Asian Hispanic/ butalsoalloweditsplatformstobeused
Source: FT analysis of Edison Research exit polls Latino FT graphic tospreaddisinformation.
The Australian lawsuit alleges the
personalinformationofuserswasdis-
Democratic duel Biden’s late surge knocks Sanders’ hopes closedtotheThisisYourDigitalLifeapp
forapurposeotherthanthatforwhich
theinformationwascollected,breach-
inglocalprivacylaws.
Facebook’sdefaultsettingsfacilitated
thedisclosureofpersonaldata,includ-
JOHNBURN-MURDOCH,ALANSMITH, amongvoterswhoonlydecidedinthe theimpactofMrSanders’corevoter withdrawalofothermoderatecandi- clear the way for him. A post-Super ing sensitive information, at the
CALETILFORDANDJANEPONG lastweekMrBidenbeathisrival. basewasreducedbylowturnoutamong dates,freeingupmoderatevotes. Tuesday Reuters/Ipsos poll suggests expenseofprivacy,accordingtocourt
Presidential candidate Joe Biden’s sur- TheanalysissuggeststheSouthCaro- youngpeople. AheadoftheSouthCarolinaprimary, thatvoterswhopreviouslysupported documents.
prisesweepofSuperTuesdayprimary linaprimaryon29February,whichthe The65-plusagegroupthatheavily supportersofPeteButtigiegandAmy the progressive candidate Elizabeth MsFalksaidmostoftheAustralian
contestswasdrivenbyvoterswhoonly formervice-presidentwon,waspivotal favoured Mr Biden over Mr Sanders Klobucharsaidtheyweremorelikelyto Warrenarenomorelikelytoturntofel- usersdidnotinstalltheappthemselves
decidedontheirpreferredcandidatein inprovidingthefreshappealtovoters makesuponly19percentoftheSuper voteforMrSandersthanMrBidenif lowprogressiveMrSandersthanthey andtheirpersonalinformationwasdis-
the US Democratic race in the week acrossthecountry,revivingtheprevi- Tuesdayelectorate,butaccountedfor theircandidatedroppedout.AfterMr aretoMrBiden. closedviatheirfriends’useoftheapp.
before,anFTanalysisofexitpollsfrom ouslystutteringBidencampaign. 44percentofvotescast. Biden’semphaticvictoryon29Febru- Instead,MrSanderswillneedgreater Facebookdisclosedthepersonalinfor-
theMarch3votessuggest. MrBiden’sSuperTuesdayresurgence MrBidenhasalsobenefitedfromthe ary,however,bothcandidatesleftthe turnout from younger, Hispanic and mationofAustralianuserstoThisisYour
WhilehismainrivalBernieSanders’ isreminiscentoftheboostthatpro- raceandendorsedMrBiden. AsianvotersthantherewasonSuper Digital Life between March 2014
supportersaresteadfast—manymade pelledformerpresidentBarackObama Among Super Tuesday voters who Tuesday.Butdemographicdataforthe andMay2015inbreachofthe1988Pri-
uptheirmindtheywouldvoteforhim tovictoryaheadofHillaryClintonin decidedwhotovoteforinFebruary,15 statesinthenextroundofdemocratic vacyAct.
well before February’s primaries — 2008. Mr Obama received an initial percentoptedforeitherMrButtigiegor primaries—Mississippi,NorthDakota, “These were systematic failures to
there’slittleevidencethatheisattract- 9-pointboostinhispollingafterwin- MsKlobuchar,butamongthosewho Michigan,Idaho,MissouriandWash- complywithAustralianprivacylawsby
ingnewvotersinsignificantnumbers. ningtheopeningIowacaucuses.Like decidedinthefinaldaysleadingupto ington—suggesttherewillprobablybe oneoftheworld’slargesttechnology
This lack of momentum may prove MrBiden,hethenwonSouthCarolina thevote,only4percentstuckwiththe limitedopportunitiesforthis. companies,”saidMsFalk.
decisiveinscuttlinghiscampaign. ahead of a strong showing on Super pair. Hispanic voters make up no more Facebooksaidithadengagedwiththe
As other moderate candidates Tuesday,allowinghimtoovertakethe FormerNewYorkCitymayorMichael than8percentofthecitizenvoting-age privacycommissioneroveratwo-year
droppedoutoftherace,some19per earlyfrontrunner. Bloomberg was the wild card in the population in this week’s primary periodaspartofitsinvestigation.
cent of moderate voters were up for TheexitpollsfromSuperTuesday’s democraticrace.Followingthebillion- states. “We’vemademajorchangestoour
grabs in the final days before Super primaries also show Mr Sanders has aire’spoorperformanceonthedebate Thereisstillalongwaytogointhe platforms,inconsultationwithinterna-
Tuesday.MrBidensucceededingetting remainedmostpopularwithyounger stageon19February,however,hisshare race to cross the threshold of 1,991 tionalregulatorstorestricttheinforma-
manytocasttheirprimaryballotsfor voters and those who had not voted oftheSuperTuesdayvotedeclinedfrom pledgeddelegatesneededtosecurethe tionavailabletoappdevelopers,imple-
him. before, while Mr Biden appealed to 20percentamongearlydecidersto12 nominationattheDemocraticConven- ment new governance protocols and
ThelatesurgeofvotesforMrBiden oldervoters. percentamonglatemovers. tioninJuly.ButMrSandershasalong buildindustry-leadingcontrolstohelp
wasapparentacrossall14statesvoting MrSandershasmaintainedhissup- MrSandersnowneedstofindawayof battleaheadofhimifhehopestobeat peopleprotectandmanagetheirdata,”
inlastweek’sprimaries,includingMr portfromHispanicandAsianvoters, quicklyreversingtheswingtowardshis theBidencampaign’ssurge. thecompanysaid.
Sanders’ home state of Vermont. whileMrBiden’ssupportamongblack JoeBidenisthefavouredcandidate rivalinwhathasbecomeatwo-horse Notebookpage8 “We’reunabletocommentfurtheras
Although Mr Sanders won the state, voterswasequallyapparent.However, amongblackandoldervoters race—andendorsementsmaynothelp GideonRachmanpage9 thisisnowbeforetheFederalCourt.”
Clean energy Green drive
Europe to unveil hydrogen fuel partnership Brussels carbon border tax risks years of delay
SAMFLEMINGANDPEGGYHOLLINGER the commission’s industrial strategy, SomeofEurope’sbiggestindustrial MEHREENKHANANDSAMFLEMING ards.“WewillprotectEuropeanindus- doesnotfallfoulofWorldTradeOrgani-
PARIS whichisbeingspearheadedbyThierry groupsareexpectedtomeetthisweek BRUSSELS tryifittakesahistoricsteptodecarbon- zationrules.PhilHogan,EUtradecom-
Europewillthisweekannounceplans Breton, EU single market commis- todiscusstheshapeandgoalsofanalli- Brussels’planforacarbonborderlevy ise,”hesaid. missioner,toldtheFinancialTimeslast
for a new EU-wide partnership to sioner,withotherofficials.Hetoldthe ance.Policymakershopeleadingcom- onimportsrisksgettingsnarledupin Butbehindthepromises,diplomats month that if the measure was “not
developcleanhydrogenfueltechnolo- FinancialTimesthathydrogenwouldbe paniessuchasAirLiquideofFranceand political resistance and compliance andofficialshavewarnedthemecha- WTO-compatiblethenwehavetolook
gies,asBrusselsseekswaystoacceler- avitaltechnologyforEuropeanindus- BoschofGermanywillbeinterested. thatcouldradicallyreducethescopeof nism is a uniquely complicated and atanalternativeway”.
ateitspushtowardscarbonneutrality. tryintheyearstocome.“Itwillbestra- Thelatestindustrialstrategy,atleast themeasureanddelayitforyears,offi- unprecedented exercise that has Diplomatswarnpoliticalresistance
tegically important for energy inde- thefifthsuchinitiativefromBrussels cialshavewarned. alreadyprovokedresistancefrompow- willmeanthatevenafteraproposalis
Plansfora“cleanhydrogen”alliance since2005,comesascompaniesacross putforwardin2021,memberstatesand
willbeunveiledtodayalongsideanew Europepushforanewapproachinlight AspartoftheEU’spushtobecomecli- ‘Somejurisdictions, MEPscouldtakeyearstoagreeonthe
industrialstrategyforEurope,officials Interestinusing of huge technological change and mateneutralby2050,theEuropean mechanism’sworkings.
hydrogenasa particularlytheUS,are
said,followingtheprecedentsetbylast increasinggeopoliticalvolatility. Commission has promised a “carbon “Thiswon’tseethelightofdayuntil
replacementfor
year’sadvancedbatterytechnologyalli- fossilfuelsis MrBretonsaiditwouldpavetheway bordermechanism”thatwouldimpose waitingforareasontoslap weareinthefinalyearsofthiscommis-
ance, which was cleared to receive increasing forthecreationofnewindustrial“eco- sanctionsonforeignC02importstopro- sion,”saidonediplomat.Anotheroffi-
tariffsonEUproducts’
€3.2bninpublicsupport. worldwide systems” across Europe, which he tect European industries from being cialsaidtheEUwasbankingonnever
AnEUofficialsaidcleanhydrogen hopedwouldbolstercompanies’per- undercut by overseas polluters. The havingtousethetooliftheUS—should
could become vital for energy heavy pendenceandthefutureofEurope,”he formance,includingingreenanddigital ideaisamongthemostradicalelements erfulmembersincludingGermany.Ber- MrTrumplosethisyear’spresidential
sectorssuchasaviation,transportand saidinaninterviewinParis. technologies.Theplanisexpectedto ofcommissionpresidentUrsulavonder linhasvoicedfearsacarbontaxwould election—fallsbackinlinewithinterna-
otherpartsofheavyindustry. Interest in using hydrogen as a includekeyperformanceindicatorsfor Leyen’s“GreenDeal”andhasalready intensify tit-for-tat trade retaliation tionalclimatetargets.
Thealliancemarksamoreassertive replacementforfossilfuelsisincreasing theseclusters,totracktheirprogress raisedconcernfromtheUSandChina fromtheUStargetingitscarindustry. Commissionofficialsadmitthescope
industrialapproachfromtheEUamid globally as governments come under andtheeffectivenessofpolicyadjust- aboutEuropean“protectionism”. “We should take into account that ofthelegislationislikelytobeinitially
competitionfromChinaandelsewhere, pressuretoimposestrictconstraintson ments. Officialshavevowedtoputforwarda somejurisdictions,particularlytheUS, limitedtotargetareassuchascement
withplanstodeployarangeoftools, emissions.However,thetechnologyto “Ourjobistoestablishavision,”Mr proposalbynextyear.FransTimmer- arejustwaitingforareasontoslaptar- ratherthanmorepoliticallysensitive
includingtrade,competitionandpro- producethealternativefuelcleanly— Bretonsaid.“Weneedtoprovideastrat- mans,commissionerinchargeofthe iffsonEUproducts,”saidMarkusFer- imports, including steel. Other open
curementpolicies.Officialshopeeven- throughelectrolysisofwater—remains egybecauseweneedtogivevisibilityfor GreenDeal,lastweeksaidthescheme ber,aGermanMEP.Thebordertaxwas questions include how the scheme
tuallytoclearthehydrogenalliancefor prohibitively expensive. The aviation investment[in]thelongterm”. wasdesignedtoprevent“carbonleak- “theperfectpretext”todothat. wouldbegovernedandwhethersanc-
stateaidasthebatteryalliancewas. andautomotivesectorshavecalledfor AdditionalreportingbyMehreenKhanin age”—whereactivitiesandindustry AmongthequestionsishowtheEU tions would automatically apply to
Theallianceisoneofanumberof governmentsupporttobringthetech- Brussels,DavidKeohaneinParisandJoe coulddecampfromtheEUtocountries canensurethemechanism,whichthe countriesthatdidnotabidebythegoals
projectscitedinpreliminarydraftsof nology into the mainstream. MillerinFrankfurt withlessonerousenvironmentalstand- commissionisnolongercallinga“tax”, oftheParisclimateaccord.
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6 FINANCIAL TIMES Tuesday10March2020
ARTS
louder conflation of the two.
POP Almost all attention was
Scarlett’s Swan directed at her. There were no
Halsey dancers.Herbandwereastripped-
backtrioconsistingofdrummer
O2Arena,London
aaaae NateLotz,guitaristAriannaPow-
ellandkeyboardistBrettWhite,
soars despite
LudovicHunter-Tilney positionedoneitherflankofthe
stage. Unlike other arena-pop
“Ikeeparecordofthewreckageof shows, the majority of the music
my life,” Halsey sang, or more waslive,withminimaluseofback-
accuratelyshouted,atthestartof ing tapes or high-tech filtering.
suspension
herO2Arenaconcert.Itwasthe Rumblingbasslinesgavesongsa
chorus to a song called “Night- heavyunderpinning.Bigchoruses
mare”, which unfolded amid added brightness and motion,
hammeringdrums,burstsofpyro- typically of the straightforward
technicsandinfernalredlighting, jump-up-and-downvariety.
like a cartoon version of a life Halsey’s vocals were versatile
crashingandburning.Whatever and accomplished. Angry songs
personal turmoil went into the suchas“Nightmare”weredeliv-
writing of the track, the result eredatfulltilt,orwhatseemedfull
was geared towards maximalist tilt until a furious rampage
arenaentertainment. through “Experiment on Me”
TheNewJersey-raisedsingeris dialledtheintensityupanotch
onherManicWorldTour,staged further.Othertrackswereacted
in support of her latest album, out with conversational ease, a
Manic. The name refers to the personable to-and-fro. “I Hate
bipolardisorderwithwhichshe Everybody”belieditsteen-angst
was diagnosed after a suicide titlewithalightlytrippingbeat
attemptattheageof17.Realname andthesinger’sconfiding,gently
AshleyNicoletteFrangipane,she ironic tone. “Finally//Beautiful
isnow25andabestsellingchart Stranger”wasatenderloveballad,
act.Manicisthefirstalbumofthe sungwithunforcedemotiveness.
VadimMuntagirov newdecadetobecertifiedplati- Thesoundqualitywasattimes
andMarianelaNuñez numintheUS.Itstwopredeces- blaring and rather muddy. But
in‘SwanLake’ sors,2015’sBadlandsand2017’s Halsey’sperformancewassharp.
—BillCooper
Hopeless Fountain Kingdom, Aclosingspeechaboutthe“sec-
achievedthesamesalesaward. ondchance”thatshebelievedher
Hercandourabouthermental fanshadgivenherafter“thedark
residencewassuspendedlastAugust dances and the impeccably drilled heir-hungrymamaisoftenjustafew health, sexuality and turbulent places I have been in my life”
DANCE pendinganinvestigationintoalleged swansinActFourareproofofScarlett’s mimegesturesinabigdressbutwas romanticrelationshipsmightonce wasn’tmerelyanexerciseinarena
sexually inappropriate behaviour abilitytoturnmusical,prettilyplotted broughttolifebyElizabethMcGorian, have been considered diaristic. schmaltz.Itsummeduphersuc-
SwanLake towards young male students of the ensembles,buthalftheircharmissup- whosemournfulfroideurexplainsher Butthevibrantperformermarch- cess at turning herself into a
RoyalBalletUpperSchool. plied by Macfarlane’s handsome cos- son’sstateofmind.Muntagirovnever ingaroundtheO2Arena,keeperof spectacle,fromAshleyNicolette
RoyalOperaHouse,London
aaaaa PlansforhisOklahoma!wereshelved tumesandeasel-worthysetdesigns(the over-emotes, trusting to Tchaikovsky platinum records about “the FrangipaneintoHalsey,amass-
(filethisoneunderSmallMercies)and gildedporphyryballroomgetsitsown and the choreography. Yearning ara- wreckageofmylife”,washardlya entertainmentsharerofdifficult
LouiseLevene companies from San Francisco to ecstaticroundofapplause).Theroleof besquesembodySiegfried’smelancholy pictureofintrospection.Sherep- innerfeelings.
Queenslandscratchedhisworkfrom VonRothbartisbeefeduptomakehim introspectionintheopeningsolojustas resentedadifferentinterreaction
Awomancruellytrappedinthewrong theirrepertoireswithoutwaitingfora ashape-shiftingcourtierwithdesigns theairyjetésandexplosivedoubletours between private and public, a iamhalsey.com
body:Odettetiptoesonthebrinkonce verdictfromtheindependentdiscipli- onthethrone. oftheBlackSwanpasdedeuxtellofa
more in Liam Scarlett’s Swan Lake, naryinvestigation.Sevenmonthsseems Thisisallhugefunfordanceactors mandizzywithdesire. Versatileand
enjoyingarevivalattheRoyalOpera likealongtime—howmanystudents suchasBennetGartside,agothicvision Nuñez,38thismonth,remainsatthe accomplished:
House. John Macfarlane’s sumptuous arewetalkingabouthere?—butthe in matt black brocade, but his crown- heightofherpowers,theincarnationof Halsey
designs and shimmering transforma- inquiry’sglacialpacehasallowedRoyal grabbinganticsatthecloseofActThree the violin played by Concert Master
NoamGalai/GettyImages
tionsareajoyandtheopeningnightwas BalletdirectorKevinO’Haretoproceed areanunnecessarydistractionfromthe SergeyLevitin.HerOdettequiverswith forBudX
casttothehilt,withVadimMuntagirov withhiscompany’ssell-outrunof25 Prince, whose belief in the dazzling longing,herturnsandfallsaretimedto
asSiegfriedandMarianelaNuñezashis SwanLakes. doppelgängerOdilehasruinedallhope maximisetheemotionalforceofevery
enchantedswanqueen. Scarlettretainsmuchoftheoriginal ofhappinesswithOdette. step. Her Odile, crisply phrased and
WhenLiamScarlett’slavishnewpro- 1895 text by Marius Petipa and Lev Luxurycastingmadeforaterrificpas impeccablyturned,isamasterclassin
ductionwasunveiledin2018,itwas Ivanovbuthehastweakedthescenario, de trois with Marcelino Sambé, who weaponisedvirtuosity.Catchitwhile
assumedthatitwouldlastfordecades, alteredtheendingandinsertedseveral debuts as Siegfried later this month, youcan.
butitsfatemayhanginthebalance. newdances.Thecourtiers’waltzinAct partnering Fumi Kaneko and his
The company’s 33-year-old artist in One,someoftheActThreenational Odette-to-beMayaraMagri.Siegfried’s ToMay25,roh.org.uk
Dylan’s songs in a house of broken dreams
Bayardelle).HiswifeElizabeth(Mare
THEATRE Winningham), who is suffering from
dementia,extractsrevengewithastun-
GirlfromtheNorthCountry ningrenditionof“LikeaRollingStone”
thatbecomesabittercommentaryon
BelascoTheatre,NewYork
aaaae herhusband’shubris.
AseverwithMcPherson,hischarac-
MaxMcGuinness ters channel their frustrations and
regretsintoboozymelancholia.That
AttendingaBobDylanconcertisoneof world-weary mood, along with Rae
life’sgreatdisappointments.Theseptu- Smith’s shabby-genteel set and cos-
agenarian singer-songwriter typically tumes,seemsdeliberatelyreminiscent
stands aloof from the audience, of Eugene O’Neill. Nick’s son, a
mumbleshislyrics,andrendersmany would-be writer with a blossoming
ofhissongsunrecognisable. drink problem, is even called Gene
Thisquirkyjukeboxmusical(witha (Colton Ryan). And, like The Iceman
book by Conor McPherson) offers a Cometh,themusicalunfoldsinepisodic
vastly more satisfying excursion style as more than a dozen oddballs
throughtheNobellaureate’scatalogue. comeandgo.
SetinaDepression-eraguesthousein Youmayoftenfindyourselfatalossto
Dylan’shometownofDuluth,Minne- sayexactlywhatisgoingon.ButDylan’s
sota,GirlfromtheNorthCountrycomesto songshavethesameeffect.AndSimon
BroadwayfromthePublicTheaterfol- KimberElayneSprawlin‘Girlfrom Hale’sjauntyarrangements,performed
lowinganearlierstaginginLondon.The theNorthCountry’ byasmallonstageband,bringoutthe
showtakesitstitlefromDylan’searly music’srootsinprewarfolkandcountry
balladaboutunrequitedlove,whichis That romantic mismatch is one of so that even the 1970s protest song
sunglateinMcPherson’s150-minute several fraught relationships in “Hurricane” sounds oddly at home
staging(withaninterval)asMrPerry McPherson’sstory,whichcentresonthe here.Despiteallthebrokendreams,Girl
(TomNelis),anageingcobbler,vainly guesthouse’sowner,NickLaine(JayO. endsupresemblingajoyouslymessy
attemptstowinthehandofMarianne Sanders),whoisstrugglingtokeephis partythatyouwouldn’twanttomiss.
(KimberElayneSprawl),whoisyoung business afloat while conducting
enough to be his granddaughter and anaffairwithoneofhislodgers,the BookingtoSeptember
mysteriouslypregnant. widowed Mrs Neilsen (Jeannette northcountryonbroadway.com
composer and the British monarchs as the Second Elder, and Michael
CLASSICAL MUSIC whogavehimtheirpatronage. MofidianasChelsiasandYaritzaVélizas
ThebiblicalstoryofSusanna,taken Danielgavenoticeofimpressivebass
Susanna fromtheBookofDaniel,getsamodern and mezzo voices respectively. With
makeover. The setting becomes a conductorPatrickMilneinspiringthe
LinburyTheatre,RoyalOperaHouse,London
aaaee deprivedCornishvillagewherethelocal LondonHandelOrchestratoitsbest,
fishermenarestrugglingagainstwaste Susanna receives a fair resuscitation
RichardFairman plastic in the sea, making this the backtolife.
first“green”,orclimatechange,produc-
It is an irony that more of Handel’s tionoftheyearsofar.Otherwise,the ToMarch14,roh.org.uk
sacredoratorioshadtheirpremieresat parableofSusanna,falselyaccusedof
the Royal Opera House than did his sexualimproprietybymaleaggressors,
operas.Anearlierbuildingwasonthe is handled with respect by director
sitethen,where13ofhisoratorioswere IsabelleKettle.
first performed, mostly entertaining ThereisaninwardraptureinSusanna
audiences during Lent, when fully that compensates at least to some
stagedoperawasnotacceptable. degreefortheshortageofdrama.The
The Royal Opera is presenting a outstanding singer here is Masabane
series of the Handel works that Cecilia Rangwanasha, whose richly
weregiventheirpremieresatCovent colouredsopranoisaluxuryinHandel
Garden.Therewillbesomeraritieson thesedays.Shebringsanexaltedradi-
thewayandtheoratorioSusannaisone ancetoSusanna’sfinestariasonalevel
of them, getting more performances withHandel’sbetter-knownTheodora,
nowthanitmanagedbackin1749when composedayearlater.
itwasnew. Cast,conductoranddirectorallcome
Religioussensibilitiesarenotsoacute from the Royal Opera’s Jette Parker
thesedaysanditisbeingtreatedtoafull Young Artists Programme. Patrick
stagingattheLinburyTheatre.Thisis Terrymakesasympatheticallylyrical
a co-production with the London husbandJoacim.Intermsofstyle,the
Handel Festival, which has “Handel incisivetenorofAndrésPresno’sFirst
andtheHanoverians”asitsthemethis Eldersoundedlikeafishoutofwater, Radiance:MasabaneCecilia
year,exploringthelinksbetweenthe butBlaiseMalabawassuitablyforceful RangwanashaasSusanna
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FT BIG READ. UK LAW
TheacquittalofthreeformerBarclaysemployeesbroughtanendtoaninvestigationintothebank’sactionsduring
thefinancialcrisis.Butithasrenewedcallsforreformoflawstoprosecutecorporationsoverwhite-collarcrime.
ByCarolineBinhamandJaneCroft
The legal fight over a company’s
‘controlling mind’
Fromleft:Tom
Kalaris,Roger
Jenkinsand
RichardBoath,
werefoundnot
guiltyoflyingto
themarketover
£322min
paymentsto
investorsinQatar
GettyImages;Reuters
R ogerJenkinswasonceoneof whenitlauncheditsinvestigationinto emergency fundraisings in June and Theplayers liability” and make such alleged Forthebank,thespectreofayears
Britain’s most powerful Barclays,whoarguesthatprosecutions October2008.Theinvestmentsaved offences“impossibletoprosecute”. longinvestigation—oneofseveralmis-
Keycharactersinthe
bankers,earningasmuchas are being hampered by this legal thelenderfromastatebailout. Inabidtoclarifythelaw,MsOsofsky conduct issues it has faced — has
OldBaileydrama
£75min2005.Butsittingin requirement.“Theemailchaintendsto WhentheSFOfiledchargesin2017,it couldnowasktheattorney-generalto weighedonitsreputation.Itstillfaces
thedockatLondon’sOldBai- dryupatmiddlemanagementlevel. wasthefirsttimeamajorbankandits makeaspecialreferencetotheCourtof anoutstanding£1bnlawsuitoverclaims
leydresseddowninadarkjumperand “[Theseacquittals]willturbo-charge chiefexecutivehadfacedtheprospect JohnVarley:thechiefexecutive Appeal—thisinvolvesgrantingpermis- of deceit by the firm founded by
trousers,itwassometimesdifficultto argumentsinfavourofreformofthelaw ofajurytrialovereventsduringthecri- MrVarley,63,withhisdistinctive sionforaspecialcasetobebroughtto Amanda Staveley, the financier who
rememberthathewasoncethe“gate- oncorporatecriminalliability,”saysMr sis. Unusually, the SFO decided to redbracesandtailoredsuits,was decideapointoflaw.Shehaslongcalled orchestrated Abu Dhabi’s investment
keeper”ofBarclaysBank’smultibillion- Green,nowapartneratlawfirmSlaugh- chargeBarclaysasacorporatedefend- thearchetypalCitybankeras onparliamenttooverhaul“antiquated” intotheOctoberfundraising.
poundrelationshipwithQatar’sthen ter and May. “The current law was ant, accusing it of fraud and illegal Barclayschiefexecutivebetween fraudlawsandallowprosecutionsifa Barclays,andindeedMrVarleyand
primeministerSheikhHamadbinJabr developedintheindustrialrevolution financialassistance. 2004and2010.Hecametothe companyfailstotakeadequatestepsto MrJenkins,nowfacedelayedregulatory
al-Thani,whohehadfirstmetonboard whencompanieswerebeginningtobe ButJohnVarley,chiefexecutivein bankthroughfamilyconnections, preventfraudbyemployees. scrutiny from the Financial Conduct
ayachtinSardinia. formedandconsistedofonepersonor 2008,wasacquittedbythefirsttrial marryingintothePeasefamilywho “Althoughit’seasyfromthesidelines Authority,overtheQatariaffair.Itwas
Hewasfacingchargesthat—along twoorthreepeoplesoitwasveryeasyto judge last year and the corporate soldtheirlendertoBarclaysin toaskwhyhaven’tpeoplebeenheldto theFCA’spredecessorbody,theFSA,
withtwootherformerBarclaysBank identifywhowasacontrollingmind.” charges—builtarounda$3bnloanthe 1902.Afterrisingupthroughthe account,andwhyhaven’ttherebeen thatfirstopenedafileonthebankafter
employees—heliedtothemarketover bankextendedtoQatar’sfinanceminis- ranks,hebecamefinancedirector criminalconvictionsalotofthethings findingsuspectemailsduringaroutine
fees paid to Qatar, as the Gulf state ‘[Post-Brexit]theprime tryjustasthesecondfundraisingwas andthenchiefexecutive.And thatwentonaredifficulttoprovetoa visitin2011.
invested£4bntohelpsavethebankat closing—werescrubbedevenbefore remainstheonlychiefexecutiveof criminalstandard,”saysMarkButton, ButfortheSFO,thecasehasbecome
ministerisnotgoingto
theheightofthefinancialcrisis. trial.TheSFOhadaccusedBarclaysof amajorUKbanktofaceajuryover directoroftheCentreforCounterFraud biggerthanthesumofitsparts.The
Calm throughout the five-month wanttobeseen lendingQatarthemoneysimplytorein- eventsrelatedtothefinancialcrisis. StudiesatPortsmouthUniversity.“And acquittalofMrVarleyandthescrubbing
trial,MrJenkinsrarelyraisedhisvoice vestinthebank,essentiallyproppingup RogerJenkins:the‘gatekeeper’ thatiswhynotalothashappened.” ofthecorporatechargesinparticular
under cross-examination even as he addingredtapeto itsshareprice. Atonestage,MrJenkins,64,was Theidentificationprinciplegoverns strike at its very purpose of being a
describedbeingorderedbacktowork, businessrightnow’ Thecourtfoundnocaseofanycrimi- amongthebestpaidbankersin almost all areas of corporate crime “specialistprosecutingauthoritytack-
justweeksafteraheartattack,inAugust nalwrongdoingagainstBarclays,orMr Britain—receivinga£25mbonus exceptbribery,where,since2011,ithas lingthetoplevelofseriousorcomplex
2008,tohelpthebankavoidahumiliat- Varley,andthejuryintheretrialmadeit in2008asthe“gatekeeper”ofthe beenpossibletoprosecutecorporations fraud”astheagencydescribesitself.
ingUKtaxpayerbailout. HissuccessorattheSFO,LisaOsof- cleartheydidnotbelieveanyallega- relationshipwithQatar.Hehad undertheUKBriberyActforfailureto The UK is not unique in failing to
Butwhenaskedabouthisresponsibil- sky,wasevenblunterduringthetrial, tionsofcriminalityagainstthethree workedhiswayupfromagraduate prevent graft in their organisation. secureanyconvictionsofbankerssince
ityfor£322minfeespaidtotheQataris, telling the BBC that the law was a defendantstakingjustoverfivehoursto traineetoleadthebank’s Since2017failuretopreventcoverstax 2008despitebankspayingeye-water-
he became animated. Mr Jenkins “standardfromthe1800swhen‘mom clearthem. structuredwealthdivision. evasioncharges.MrGreen,andothers, ingfinesandcostsinrelatedlitigation.
insistedthatthetwosidedealswere andpop’rancompanies—thatisnotat Butinthewakeofthefailureofboth TomKalaris:the‘quarterback’ wantparliamenttoextendthat“failure TheUShasimprisonedjustonebanker
struckaspartofafundraising,were allreflectiveoftoday’sworld.” jurytrials,lawyerssayprosecutingbig Barclayscolleaguesdubbedthe toprevent”tocovereconomiccrime, overthecrisis:ajuniorCreditSuisse
genuineandnota“smokescreen”for companies in the UK looks to have Americanheadofitswealth whichwouldmakeiteasiertoprosecute trader,forinflatingthepriceofsub-
Desperatemeasures
illegalpayments,astheSeriousFraud becomeevenharder.Prosecutorshave divisionthe“quarterback”because largecompanies.
Officehadalleged.Addingthatfarfrom Thecourtcaserecalledthedesperate struggled to meet the “controlling ofhisroleinhelpingtogetcapital TheSFOhasalsobeenstrikingUS- ‘[Theacquittals]will
being“misleading”,theOctober2008 measuresBarclaystooktostayoutof mind”testinthepast.In2015,theUK raisingsovertheline.Duringthe style deferred prosecution agreements
turbochargearguments
capital-raising prospectus had been UKgovernmenthands.Andwiththe CrownProsecutionServiceannounced trial,thefather-of-fiverolledout whereacompanyagreestopayahefty
approvedbyBarclays’board. SFOevidencehingingonextractsfrom itwouldnotchargeNewsGroupNews- thebiggunsascharacter fine and overhaul compliance in infavourofreformofthe
“Toimply...thatI’minsomeway MrBoath’stapedphoneconversations papersoverthephonehackingscandal, witnesses:theformerchairmanof exchangeforasuspensionratherthana
guiltyforthisdocument,I’msorryIfind in2008—includingluridconversations whichsawseveralofitsjournalistscon- theoldmarketsregulator,the prosecution.Since2014ithasstruck lawoncorporate
[it]verydifficulttocontinuethatcon- inwhichhediscussedwithMrKalaris victedforvoicemailinterception. FinancialServicesAuthority,Callum DPAswithsevencompanies,including criminalliability’
versation,”hetoldtheSFO’sprosecutor fearsofgoingtojail—itwasavivid AtthetimetheCPSsaid:“Thepresent McCarthy,andtheex-Barclays Rolls-Royce,Tescoand,mostrecently,
Edward Brown QC in one charged reminderofadifferentera. stateofthelawmeansitisespeciallydif- chairman,DavidWalker,inplace Airbus.Butinnoneofthosecaseshave
exchange.“Wehaveaboardforthatrea- The jury heard that after Barclays ficult to establish criminal liability whenauthoritiesstartedcircling anyindividualsbeenconvicted. prime mortgages. He received a 30-
sonandIamnotonthatboard.Sorryto agreed the Qatari fundraising, Mr againstcompanieswithcomplexordif- thebank.Bothvouchedforhim. ButtheSFO’sapproachtoDPAshas monthsentence.
beemotionalaboutit.” Jenkins,whowaspaid£39.5min2007, fusemanagementstructures.” RichardBoath:the‘worrier’ raisedquestionsoverwhethertheproc- ElizabethWarren,whountillastweek
Hiscommentliesattheheartofthe pushedforanadditional£25mforhis Thereisnodefinitionofwhatconsti- Themostjuniordefendant,Mr essisfairbecauseindividualscanbe wasvyingtobecometheDemocratic
failedlandmarkUKprosecution.One roleinhelpingtoraisethecapital,say- tutesadirectingmind,butupuntilthe Boath’stelephonewasroutinely namedpubliclyasthewrongdoersand presidential candidate, tweeted that
that began nine years ago when the inghehadhelped“saveourarsesand Barclayscaseitwasthought,byprose- recordedbyBarclaysbecausehe directingmindsinaDPAyetbeacquit- giantbanks“willonlycleanuptheiract
financialregulator’sinvestigationfirst jobs”. cutors,thatagroupchiefexecutive,as dealtdirectlywithclientsand tedbyajuryinacriminalcourt.Inthe whentheirexecutivesknowthey’llface
started,tooktwojurytrialsandended TheSFOallegedthe£322msidedeal MrVarleywas,wouldmakethegrade. providedmostoftheSFO’s Tescoexample,thejudgethrewoutthe handcuffswhentheypresideovermas-
withMrJenkins,alongwithco-defend- oradvisoryservicesagreement—sealed Thefirsttrialjudge,MrJusticeJay, evidence.Aself-described SFO’scaseagainstthreeformerexecu- sivefraud”.
antsRichardBoath,aseniorbanker, withasix-paragraphhandwrittenletter obliteratedthatassumption:inessence, “worrier”,MrBoathtoldtheSFO— tivesontrialbecauseitwas“soweak”, IntheUKMsOsofskyhassaidthe
andTomKalaris,formerheadofBar- —wasadishonestwayoffunnellingout- heruledthatMrVarleywasnotthe duringeightdaysofquestioningin eventhoughtheyhadbeennamedas agencyis“hamstrung”bythedirecting-
clays’wealthdivision,beingacquittedat sizefeestoQatariinvestors,including directingmindofBarclays—and,there- 2014and2015—thatthebank thesupermarket’sdirectingmindinthe mindprinciple.Shetoldparliamentari-
theendofFebruary. SheikhHamad.Thecaseallegedthat fore,Barclayscouldnotbeprosecuted paidQataroutsizefeestosecureits corporateDPA. anslastyearthatwithoutreform“Ican
The lack of prosecutions of senior the payments were to help secure a ontheSFO’sevidence.MrVarleywas participationinthefundraisings.He “Wenowhaveasystemwhereit’sall goafterMainStreet,butIcan’tgoafter
bankers—arisingoutofeventsduring £4bn investment into Barclays via answerabletotheboard,whichinthe wasclearedbytheFCAinits aboutthemoney,”saysJonathanPick- WallStreet”—smallcompaniesbutnot
thefinancialcrisis—unleashedpublic judge’sviewmeanthewasnotworking parallelregulatorycase,andstill worth, a lawyer at White & Case. “It’s corporateswithlayersofcontrol.
angeronbothsidesoftheAtlantic.But asthecompanybutforthecompany. hasanemploymentclaim almostlikeanewsystemoftaxation, Yet Brexit may hinder any legal
thecleansweepofacquittals—which MrJusticeJayacquittedMrVarley outstandingagainstthebank. withlittleconcernfromtheSFOabout reform.
meanthatnoUKbankbosshasbeen halfwaythroughthefirstjurytrialin SheikhHamadbinJassimbinJabr whetheritcansuccessfullyprosecute “You’vegottoaskhowattractivethis
convictedorjailedoveractionstakenin 2019 on the basis that the SFO had al-Thani:themoneyman theindividualswhomthecompanyand willbetoBoris[Johnson]andhispost-
thecrisis—throwsupwiderquestions broughtinsufficientevidencetoshow Oncethepowerfulprimeminister theSFOconvenientlyagreearerespon- Brexit Britain,” says a former senior
abouttheUK’sabilitytoprosecutealle- hehadacteddishonestly;hecouldnot ofQatar.Oftenknownsimplyas siblefortheallegedoffences.” prosecutor.“Theprimeministerisnot
gations of white-collar crime at the be held accountable for alleged HBJ,healsochairedtheQatar goingtowanttobeseentobeaddingred
Achangedworld
highestlevels. misrepresentationsmadetothemarket InvestmentAuthoritywhich tapetobusinessrightnow.
UnlikeintheUS,prosecutorsinEng- inBarclays’name. investedinBarclays.Hefirstmet Morethanadecadeonfromtheemer- “If they want to hold corporates
landandWalesmustdemonstratethat Essentiallythebankcouldnotbeheld RogerJenkinsonayachtin gencycashcallsinquestion,theworld accountable, they need to make this
the“directingmind”ofacompanywas accountablefortheactionsofthechief Sardiniain2007,andayearlater has changed. Qatar is not quite the change,butwillprobablykickitintothe
involvedinallegedcriminalitytoprove executive,butneithercouldthechief investedover£800minBarclays. globalpowerhouseitwasin2008after longgrassandgiveittotheLawCom-
acompanyliable. executivebeaccountablefortheactions HewasoneoftheQatariinvestors beingisolatedbyitsneighboursover missiontoconsider,”hesaysreferringto
“Itisalmostimpossibletofindacon- ofBarclays.Inanunsuccessfulappeal whoreceivedashareofthe£322m regionaldivisions.YetQatarInvestment thebodythatrecommendschangesto
trollingmindandprovethatcontrolling againstMrJusticeJay’sdecisiontheSFO infeespaidbyBarclaysthatwere Authority, the state-owned holding thelaw.“That’llprobablytakefiveto
mindiscomplicitinanycriminality,” LisaOsofsky,oftheSFO,wantsan arguedthatthedualrulingswouldallow atthecoreoftheOldBaileytrial. company, remains the second-largest sevenyears...longerthan[any]SFO
saysDavidGreen,directoroftheSFO overhaulof‘antiquated’fraudlaws directorsto“insulatethemselvesfrom shareholderinBarclays. investigation.”
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Reaction to outbreak can’t ignore climate change EUhasanimportantrole
toplayinenhancingthe
conditionsforindustry
Inhiscolumnontheurgentneedfor complacentaboutthecoronavirus Allcountercyclicalpolicymeasures
co-ordinatedeconomicpolicy threat”,March9.) shouldbeeithercarbonneutralor Europeanbusinesshasacrucialrolein
responsestothecoronavirusthreat, AsmuchasIagreewithhispoint carbonnegative.Wehavealready bringingprosperitytoEuropean
WolfgangMünchaucriticisesEuropean thatweneedurgentpolicyresponsesto missedtheopportunitytoimplement citizensanddeliveringonthebig
CentralBankpresidentChristine dealwiththeeconomicfalloutfromthe sustainablecrisisresponsesduringthe societalchallengesthatEuropeis
Lagardefortalkingtoomuchabout coronavirus,thenotionthatclimate 2008-09crisis.Weshouldnotwaste facingsuchasclimatechange.
greenfinanceandclimatechange,and changeissomethingwecandealwith anothercrisis. Europeanmanufacturingindustries
wonderswhetherthishasbecometoo anothertimeisutterlywrong.Indeed, DrUlrichVolz areabackboneoftheEuropean
TUESDAY10MARCH2020
muchofadistractionfromwhathe anycrisisresponses,betheyfiscalor FoundingDirector, economy,andservicesarebecoming
considersthemoreurgenttaskat monetary,shouldbejudgedontheir SOASCentreforSustainableFinance, increasinglyimportant,notonlyonits
hand.(“Theeurozoneistoo sustainabilityimpact. SOASUniversityofLondon,UK ownstandingbutalsowithin
manufacturingprocesses.With
Virus downturn needs
digitisationincreasing,industryisa
Pricesshouldriseas inhumaneconditionssincethe2011 drivingforce.Weareatthedawnofthe
peacefuluprising. impactof5G,artificialintelligenceand
a global fiscal response demandincreases
Syrianrefugeesarenowonlypawns the“internetofthings”.
WithallduerespecttotheCompetition inageopoliticalstruggle,butifwewant Alongsideimportantnational
andMarketsAuthority,increasing tosolvetherefugeecrisisandgivethem initiativeswithinareassuchas
pricesinresponsetoincreasing thechancetobuildabetterlifeintheir researchanddevelopment,theEUhas
Priorityissafeguardingcompaniesandjobsuntilrecoverykicksin demandisnotrippingoffconsumers owncountrywemustpressvigorously animportantroletoplayinenhancing
(“Regulatorwarnsvendorsagainstrip- forapoliticalsettlementinSyriabased theconditionsforindustry.To
Theechoesof2008arebecomingdeaf- ministersmayhavetorelymoreonad offs”,March6).Rather,itisexactly onjusticeandaccountabilityforcrimes strengthenthecompetitivenessof
ening.Thepastweekenddelivereda hocnetworking.Monetarypolicyalso howthemarketshouldfunction.When againsthumanity,andevenmore Europe’scompanies,fiveareasshould
secondshock—anoilpricewar—on haslessscopetoactasanantidote. thereissurgingdemandand importantlyrespectforhumanrights, beprioritised.
topoftheeconomicdisruptionofthe Interestratecutshelpbolstersenti- constrainedsupply,pricesshouldrise freedomanddemocracy. First,barriersstillexistinthesingle
coronavirus.Athirdjoltwillfollow,as mentbyreducingborrowingcosts.But todiscouragehoardingandencourage RonanLTynan marketthatpreventcompaniesfrom
the sharp falls in financial markets theywilldolittleornothingtomend production. Director,“Syria—TheImpossible takingfulladvantageofallthe
destroywealthandmagnifythedam- brokensupplychains,hastenworkers’ TheCMA’sedictscannotmakethe Revolution”, opportunitiesitoffers.TheEUshould
agetotheeconomy.Thedeclinesin returntoworkorboostspendingby economicproblemdisappear.Retailers EsperanzaProductions, accelerateworkonEuropeanand
safebondyieldstohistoriclowsshow consumersconfinedtotheirhomes. unabletoraisepriceswilltrytostop Dublin3,Ireland internationalstandards,eliminate
just how pessimistic investors have Withinterestratesinadvancedecono- hoardersfromemptyingtheshelvesby nationalrulesandstrengthen
Saverswillsufferfrom
becomeabouttheoutlookforglobal miesoutsidetheUSalreadyclosetoor restrictingthenumberofitemseach supervisiononmemberstates
growth.Yetwhilethescaleofthefallsin belowzero,manycentralbanksinany customercanbuy.Butthesepolicies Fed’sratereduction applicationofsinglemarketrules.
marketsissimilarto12yearsago,what casehavelimitedfirepower. canbeeasilycircumvented.Theresult Second,EUcompetitionrules
is lacking — but still much needed Where policymakers can make a isgoodsgoingtoshopperswhohappen DavidWilcox’scommentthattheFed’s promotegloballycompeting
today—isaco-ordinatedglobalpolicy biggerimpactisthroughfundingand tobetherewhennewstockis Assad’sstrategyistostop reductionininterestrateswas“ina companies,lowpricesandmorechoice
response. fiscalmeasures.TheBankofJapanhas delivered,have“insideinformation” situationwherethere’sreallynothing forcustomers.TheEuropean
refugeeswantingtoreturn
Intheautumnof2008thecentreof already promised to inject liquidity aboutnewstock,havethetimeto tobelostandtheremightbe Commissionhasannouncedthatitwill
globalpolicymakingshiftedfromthe intomarkets.Justasimportantishelp- makemultipletripstotheshops,or Youreditorial“Europecannotignore somethingtobegained”waseither reviewpartsoftheacquis.Ourmessage
G7richdemocraciestotheG20,whose ingstrugglingcompaniesandindividu- havefriendsandfamilymembersthat theSyrianmigrantcrisis”(March7) myopicorcallous,orboth(“Fedand isclear—neitherbusinessnor
inauguralleaders’summittookplace alspaytheirbills.Othercentralbanks canbuyforthem.Hardlyanyfairer wasanexcellentreminderofabasic marketsjoustin‘hallofmirrors’”, consumersinEuropewillbenefitinthe
thatNovember.TheUS,underpresi- shouldfollowChinainofferingcheap thanallocatinggoodsbyprice.Norwill factthat“FortressEuropeisan March5).Althoughinvestorsand longtermbyamorepoliticised
dentGeorgeWBushandtheincoming financetobankslendingtocompanies pricecontrolsstop“profiteering”: illusion”.However,theonlywaythe corporationsmaycheera50-basis competitionsupervision.
BarackObama,playedavitalleader- worst-hitbythevirus. blackmarketerswillinevitablysetup crisiscanberesolvedisbyaddressing pointreductionininterestrates,the Third,theEUshouldstriveforclear
shiprole,alongwithBritain’sprime Amongothercountrieswithsevere shopandmakeakillingonarbitrage. therootoftheproblem. reductionwillinflictseriouspainon andpredictablecommonrulesin
ministerGordonBrown.Similarvoices Covid-19outbreaks,Italyisofferingtax QinhaoZhu Morethanhalfthepopulationhave millionsofpeoplewhoaresaversand internationaltrade.Reformofthe
aresadlylackingtoday,andthespiritof creditstocompanieswithsharpreve- ChristChurchOxford,UK beenuprooted,inthemainbyalong notinvestors.Theaveragepersonwill WorldTradeOrganizationandnew
multilateralismthatfloweredadozen nuedrops;SouthKoreahaspledged scorchedearthcampaignbyBashar seetheirincomegodownasinterest freetradeagreementswithindividual
Facemasksareacourtesy,
yearsagohasshrivelledunderDonald cashtosmallbusinesseshavingdiffi- al-Assad,backedbyRussiaandIran, ratesonbankcertificatesofdeposit countriesshouldbegiventoppriority.
Trump.ThecurrentholderoftheG20 cultypayingwages.Someloanforbear- andprotectotherpeople consistentwiththetonesetbyhis andmoneymarketfundsarereduced. Fourth,researchshouldhavepriority
presidencyisSaudiArabia—whose ance, so viable companies are not militiasinresponsetothe2011 Pensionplansthatusefixedincometo intheEUbudgetasacomplementto
brinkmanship with Russia triggered forced into bankruptcy for missing Yourepeattheadvicegivenbythe peacefuluprising:“Assadorweburn balanceassetsagainstliabilitieswill nationalinitiatives.Particular
theoilpriceconflict. debt payments, could help. Govern- NationalHealthServiceandother thecountry”.Mostpeople,iftheyeven alsofinditdifficulttomeettheir attentionshouldbepaidto
Thenatureofthiscrisisisdifferent, ments also need to ensure workers, informationsourcesbystatingthat noticed,ignoredthebombingof obligationswiththereducedincome. instrumentsandinfrastructurethat
too. The 2008 shock first paralysed especially those on precarious con- “wearingafacemaskispointless” hospitals,schools,bakeriesandeven TheconsequenceoftheFed’saction promoteinnovation.
thefinancialsystem,whichcauseda tracts,canaffordtotaketimeoffsickor (“Bewarefakenews,donotpanicbuy breadqueues,nottomentionthe istoforcesaversandotherpeoplewho Finally,thefreemovementof
collapseindemand.Covid-19isaneco- tocareforchildrenandrelatives. andprepareforpossibleself-isolation”, starvationsieges—oneofthegrimmest cannotaffordtotakeriskstotakerisks serviceswithintheEUiscrucialand
nomic shock, hitting both supply — Theoverridingaimshouldbetosafe- March7).Thismaywellbetruefor hallmarksoftheSyrianconflict.Now theydonotevenunderstandinorder needstobemadeeasier.
throughfactoryshutdowns,disrupted guardcompaniesandjobs,andlimit self-protection,butanyonewhohas likeBanquo’sGhostthisbetrayalofour toreplacethelostincome.Contraryto Attemptstoprotectdomestic
supplychainsandtravelrestrictions— damagingknock-oneffects,untilthe livedincrowdedcitiesinJapan,Korea so-calledvaluesandcommitmentto MrWilcox’sview,thereisplentytobe industryfromcompetitionandallow
aswellasdemand.Consumerswhoare virusabatesandrecoverycankickin. orotherAsiancountrieswillknowthat humanrightshascomebacktohaunt lost.Theactioncanbeviewedasa stateaidtosupportcertainselected
illortryingtoavoidfallingillgooutless Howfastthathappenswilldependon thepointofthefacemaskisthe usasTurkeyunlockedthegatesthat masstransferofwealthfromworkers industrysectorsdoesnotnecessarily
andspendless.Asthecrisisprogresses, governments’successincontainingthe protectionofothers,notofoneself. theEUpaidhimtokeepshutinsteadof andpersonsofaverageincometo deliversuccess.Itleadstolowergrowth
acashcrunchloomsbothforcompa- virus—andhereisthebiggestdiffer- Inthesecountries,peopletendto addressingthecauseofthecrisisin corporationsandwealthyinvestors, andhighcostsfortaxpayerswithout
niesexperiencingfallingrevenuesand encefrom2008.Importantasstimulus wearafacemaskattheslightsignofa Syria. manyofwhomtakeriskswithother promotingindustryinthelongrun.
consumerslosingtheirincomesorjobs. willbe,thebiggestpriorityofallisan cold,simplyasacourtesytoothersto Wemustconfrontthefactthat people’smoney. Inaforthcomingindustrialstrategy,
Sothetypeofsupport,andhowit effectivepublichealthresponse.Sadly, makesuretheydonotcatchit.Given PresidentAssaddoesnotwantthe DanielFHinkel theEUneedstobuilduponEurope’s
isdelivered,willhavetobedifferent thatiswheremanygovernmentsand theCovid-19incubationperiodofupto morethan5mrefugeestoreturnand Atlanta,GA,US successfactorsandstrengths,rather
thistime.Withoutglobalpoliticallead- healthauthoritieshaveappeared,so twoweekswithnovisiblesignsof hiswholestrategyofrepressionand thantryingtoturnbacktheclock.
Japanmayhavebeenin
ership, central bankers and finance far,tobefurthestbehindthecurve. infection,andmanymildcasesof crimesagainsthumanitywithRussia Jan-OlofJacke
infectionthatarehardtodifferentiate andIranhasbeenbasedondissuading aliquiditytrapalready DirectorGeneral,ConfederationofSwedish
fromacommoncold,Iwouldhave them.Theclearestevidencewas Enterprise
thoughtthebestadviceforthecountry providedbyGeneralJamilal-Hassan, CathalRabbitte(Letters,March6),in JyriHäkämies
wouldbeforeverybodytowearface theheadofSyria’sAirForce criticisingFedgovernorLaelBrainard’s DirectorGeneral,ConfederationofFinnish
masksinpublicplacesuntilthingsare Intelligence,atameetingof33senior proposalforyieldcurvemanipulation, Industries
Riyadh puts the squeeze
undercontrol,inadditiontoregular officersonJuly272018whenhewas rightlysaysthat“Japanendedupina LarsSandahlSørensen
hygieneadvicesuchaswashinghands. reportedassaying:“ASyriawith10m liquiditytrap”whenitadoptedthis.He DirectorGeneral,ConfederationofDanish
JemEskenazi trustworthypeopleobedienttothe neglectstopointoutthatJapanwasin Industries
on US shale producers
LondonN3,UK leadershipisbetterthanaSyriawith deflationwhenitintroducedthis—it OleErikAlmlid
30mvandals.”Healsoemphasisedhe mayhavebeeninaliquiditytrap DirectorGeneral,Confederationof
Ihaveseentheadvicethatthereislittle hadlistswith3mnamesofpeople already. NorwegianEnterprise
pointinwearingafacemaskasthereis deservingpunishment—aconceptin Withinflationandinflationary
AmericawillbehardesthitfromoilpricewarwithRussia noevidencethattheyofferprotection Syriathatmeansdeathlists,especially expectationsbothpositiveintheUS,it
againstcoronavirus.Butsurelythereis whensuchremarksareattributedto maynotnecessarilyfollowthatthis OPINIONONFT.COM
It has been dubbed the oil market daythatitisdigginginforapricewar, somevalueinthemiftheypreventyou GenHassan,whomanagesregime willhappenwereyieldcurve
TeresaJohnson
equivalentofadeclarationofwar.A declaringitcouldwithstandoilprices fromtouchingyourface? detentionfacilities,inwhichthousands manipulationtobeenactedtoday. Toolscreatedafterthe2008crisiscould
splitbetweentwooftheworld’slargest of$25-$30perbarrelforsixto10years. AdrianWiddowson havebeenexecutedordiedfrom PaulNegrotti empowerregulatorstoactonenvironment
crude producers, Saudi Arabia and Russian state group Rosneft is Leeds,UK torture,starvationandother Greenford,Middx,UK www.ft.com/opinion
Russia, on how to respond to the expectedtoraiseoutputnextmonth.
demand shock from the spreading Aperiodofsustainedlowoilprices
coronavirushassentmarketsintofree- would be bad news for an industry
Winning a
fall.Oilpricescrashedbyasmuchas30 alreadyoutoffavourwithinvestors MacombCounty,Michigan,homeof Americanresidents.Today’sMacomb whitevotersinMacomblikedthe
percentyesterday—thebiggestdrop overitsdamagingimpactonthecli- theso-calledReaganandTrump isestimatedtobeatleast12.2percent stereotypeofthecountyasan
turncoat county
sincetheGulfwarin1991.Shareprices mate.Itcouldforcelargerproducersto Democrats,isn’twhatitusedtobe. African-American,upfromonly2.7 alternativeto(mostlyblack)Detroit,”
havefollowedsuit,withbillionsofdol- rethink their dividend policies and Thatmaymakeallthedifferenceto percentasrecentlyas2000. shesays.“Diversificationhascreated
larswipedoffstockmarketsaround curbspending.Energycompanieshave will be crucial formervice-presidentJoeBiden’s “TheinfluxofAfrican-American sometensions.”Sodemographic
theworld.Itishardtooverstatethe beenthebiggestissuersofjunkbonds, chanceofbeatingBernieSanders,his votersintoMacombhelddown changecouldhurtMacomb
consequencesoftherout. accountingformorethan11percentof for Democrats rivalfortheDemocraticpresidential Bernie’svote”inthe2016primary, Democratsasmuchasithelpsthem,
Thesplithasunderlinedthedimin- theUShigh-yieldmarket. nominationinthisturncoatcounty saysJoeDiSano,aMacomb saysomelocals,addingthatgrowthin
ishedinfluenceofOpec,theclubofoil- America’sshaleindustrywouldbe outsideDetroit—thekindofplace Democraticcampaignconsultant.Mr theblackpopulationmostlyhappened
producingnationsthatinitsheyday amongthebiggestlosers.Evenbefore thatputsUSpresidentsinpower. Sandersnarrowlylostthecountyto between2000and2016.Thatdidn’t
heldtheworldinitsthrall.Itsgovern- thecoronavirushitdemand,therehad Voterswillfaceacleanchoice HillaryClintonbutnarrowlywonthe stopMrTrumpin2016.
ing statute stipulates that the group’s beenrisingconcernsaboutthesector’s betweenthetwocandidatesforthe statethatyear.“Itwilllikely EdBruley,theDemocraticparty
goalis,amongotherthings,to“work healthgiventheaccumulationofdan- firsttimetoday,whenMichigan negativelyimpacthimagainthis chairforMacomb,agreesthatwinning
togethertoensurestableoilprices”. gerouslevelsofdebt.Apersistentlow (alongwithahandfulofotherstates) year,”hesays,predictingMrBiden backTrumpDemocratsisalongshot.
Whatthishasmeantinpracticeisthat oilprice—WestTexasIntermediate, votesinitsprimarywithoutasplit willwincountyandstatebydouble Hesaystheparty’srealtargetisthe
pricesshouldbelowenoughtosupport theUSbenchmark,droppedto$30a ticketofmoderatestodistractthem. digits.“[MrBiden]iskillingitamong tensofthousandsofpeoplewhowent
globalgrowthbut,mostimportantly, barrelyesterday—willhurtsmaller ThechoiceforDemocratsissimple: voters50andupandAfrican- tothepollsin2016tovoteforother
highenoughtosustainthebudgetsof players.Hedgingstrategiesmaycush- whohasthebestchanceofbeating Americanvoters.I’mstartingtothink officials,butrefusedtochoosea
membercountries. ion the blow but at an oil price of PresidentDonaldTrumpin wemaybewitnessingasuburban presidentialcandidate.
Michigan
ButOpec’sgriponworldproduction $30-$35abarrel,vastswathsoftheUS November,MrBidenorMrSanders? surgeofpeoplewhojustthinkthey’ve ButNelsonWestrickisoneofthose
isnotwhatitwas.Therisingdomi- shale industry will be unprofitable. Infewplaceswillthatchoicematter hadenoughofTrump,anational TrumpDemocratswhosayshewon’t
Notebook
nanceofhomegrownAmericanpro- There is also little appetite among morethaninMacomb,apothole- momentofsanity,”hesays. beonebittemptedtoreturntothe
duction — the US has become the investors to help refinance these pitted,working-classcountythat Sodiversityprobablyhadanimpact fold.“Democratsareallsuchelitist
world’slargestproducerofoiloverthe companies. byPattiWaldmeir single-handedlygaveMrTrumphis ontheDemocraticprimary,butit snobsandtheylookdownonthe
pastdecade—hasupendedtheglobal Therewillbesilverliningstoaprice marginofvictoryinMichiganin2016, wasn’tenoughtodefeatMrTrumpin averagefolk,”hesays,showingmea
energyindustry. war.Theloweroilpricewillbenefit whenhewonthecountyby48,000 2016andMrDiSanothinksitwon’t Facebookmessage,purportedlyfrom
Since2016SaudiArabiahasreliedon some industries, including aviation, votesandthestatebyunder11,000. guaranteeaDemocraticvictoryover aDemocrat,saying“ifIgetthe
othercountriesoutsideofthecartel, althoughhedgeswilldelayanyupside Muchcoulddependonhow theRepublicansthisyeareither. coronavirusI’mgoingtoattendas
notablyRussia,tohelpitinfluencethe andformanycarriersitwillnotmake Macomb’sAfrican-Americansvote, JoelRutherford,chairofthe manyTrumpralliesasIcan”.
marketaspartofawider,so-called upforacollapseinpassengerdemand. andwhethertheyturnouttodoso. MacombDemocraticblackcaucus, So,yes,muchhaschangedin
Opec+,alliance.ItwasRussia’srefusal USmotoristswillreapthebenefitsof ThepoweroftheAfrican-American saysdemographicsmakeadifference Macomb—butmuchmorehasstayed
latelastweektojoininproductioncuts lowerpumpprices.Yet,unlike2014— voteinSouthCarolinalitafireunder “onlyifpeopleturnouttovote”.He thesame.DiversitycouldhelpMr
thatpromptedSaudiArabiatopullthe thelasttimeSaudiArabiafloodedthe MrBiden’smoribundcampaignahead criticisesthelocalDemocraticparty BidendefeatMrSanderstheretoday.
triggerandlaunchapricewar,boosting marketwithoil—thistimethereislit- ofSuperTuesday.TowinMacombhe forfocusingtoolittleonturnout, Butitmaynotmatterintheend,if
its own output and selling crude at a tleevidenceofdemandformoreofits willbehopingthesamethinghappens notingthattheinfluxofnon-whitesto neitherofthemcanbeatMrTrump.
discount.ButRiyadh’sgambit,driven supplies. The International Energy there.BackinthedayswhenMacomb Macombhasn’tjustbeenofAfrican- I’mnotbettingonMacombgivingup
inpartbyadesiretounderminedebt- Agency yesterday warned global oil helpedusherintheReaganerain AmericansbutalsoBangladeshisand itstasteforRepublicanpopulists
ladenUSshaleproducersandtogain demandwillfallthisyearforthefirst 1980—whenunionDemocratsflipped Hmongimmigrants. anytimesoon.Thathasbeendecades
marketsharefromMoscow,islikelyto timesince2009.SaudiArabia’sgame- partiesforapopulist,muchasthey SusanDemas,formerlya inthemaking.
provecostlyforeveryoneinvolved. playingwouldberiskyatanytime,but wouldlaterforMrTrump—the Democraticcampaignconsultant,says
ThealliancewithRussiahasallbut whentheworldisbattlingcoronavirus countyhadalmostnoAfrican- therehasbeena“backlash”.“Some [email protected]
unravelled.Moscowmadeclearyester- itlooksirresponsible.
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Opinion
Policymakers must co-operate to fight coronavirus How this market
crash is unlike
the 2008
andtheeconomicshockthatwillcome importantly,thosewhowillbehardest likeahurricane,thatwarrantsfinancial Thescaleofthesupportshouldbein
Ray
fromit,isasurprise,severalthingshave hitbythevirusneedtobeprotectedvia support for responsible people and linewiththescaleofthecrisis.Itwill
Dalio beenobviousforsometime. fiscalpoliciessuchasbridgeloansand companies that would otherwise be increasethedeficitwhich,allelsebeing financial crisis
First,ithasbeenclearthataneco- financialassistance. brokenbyit. equal,willraiseinterestrates.
nomicdownturnwouldsomedaycome Somepeoplewillarguethatproviding Therearemanypeoplelivingnearthe That’swheretheFedmightneedto
fromonetriggerorother.Second,that such assistance is a bad idea. They povertylinewithnofinancialcushion comeintoholdinterestratesdown,if
theUSeconomyisheavilyindebted. say that our Darwinian economic whoseeconomicsecuritywillbehitas needbebyprintingmoneyandmone-
A nyonewhoisknowledgea- Third,thatwithinterestratesnearzero systemisdesignedtoshakeoutthose hardastheirhealthbycoronavirus.A tisingthedebt.Whilethisfiscal-mone-
Mohamed
bleandplain-speakingwill monetarypolicyalonecannotbevery who don’t manage their finances well, numberofotherwisestrongcompanies taryco-ordinationiscontroversial,itis
tellyouthatthenegative stimulative. likewisewon’tbeabletowithstandthe the best policy under the circum- El-Erian
economic impact of Fourth,thatwearenowinthepartof downturn. stances,withtheeconomysoindebted
the coronavirus outbreak thelong-termdebtcyclewhenthere Despitepoliticaldivisions, Nowimagineaddingthetwinhealth and with other forms of stimulation
will probably be big, that monetary needstobegoodco-ordinationbetween andeconomicshocksdeliveredbythe ineffective.Itisalsoapolicyweallneed
governmentsneedtostep
policywillbeoflittleusetocounteract fiscal and monetary policymakers to outbreak and where that will lead. togetusedtobecauseitistheonlyway
it,andthatco-ordinationbetweenpolit- handledownturnswell.Andlast,but inwithco-ordinatedfiscal Imagine many companies suffering economicpolicymakerswillbeableto A mid the market turmoil,
icalleadersandcentralbankersisboth notleast,itisobviousthatthebigwealth debilitating revenue losses, some too dealwitheconomicdownturninthisera thereisasensetheworldis
andmonetarystimulus
essentialandunlikely. andpoliticalgapswearenowexperienc- indebtedbecauseofpersistentlycheap ofnear-zerointerestrates. revisiting the financial
WhattheUSFederalReservehasto ingwillmakesuchco-ordinationhard moneyandotherincentivestoborrow, Theonlyremainingquestiontomeis upheavals of 2008 which
offer—slightlycheaperborrowingcosts tocomeby. or that fiscal assistance will widen thatwillforcethemtocutpaymentsto whetherourfragmentedpoliticalsys- almost tipped the world
and/or printing money and buying Lookingbacktoperiodsinhistory thedeficit. theiremployeesanddefaultontheir tem, led by people who are more economyintodepression.Itisnot.
financial assets — won’t give help to when this configuration of circum- Neither of those arguments makes debts. inclinedtofighteachotherthantoco- Unliketheglobalfinancialcrisis,this
those who need it. What those people stancesoccurred(thelasttimewasin anysensetome.Thiscrisisisnotatest Theireconomicproblemswillspread operate,canachievewhatneedstobe isnotacripplingcrunchinthebanking
and companies in distress will need the1930s),thekeydifferentiatingfac- ofpeopleandcompanies’economicvia- justlikethevirus.Providingassistance done. orpaymentsandsettlementssystems.
(besidesgoodmedicalsupport)isfinan- torbetweensuccessandfailurewasthe bility, and the cost of not providing inthiscaseisnotonlyhumane;itis Instead, the world economy and
cialsupporttosurvivethroughserious ability of fiscal and monetary policy assistancewillbegreaterthanthecost goodeconomicpolicytosaveproduc- Thewriteristhefounder,co-chairmanand markets are going through a rough
temporarydeclinesintheirincomes. leaderstoco-ordinate. ofprovidingit. tivepeopleandcompaniesthatwould co-chiefinvestmentofficerofBridgewater patchthathasbeenyearsinthemaking.
Whiletheemergenceofcoronavirus, Sowhatneedstobedonenow?Most Thecoronavirusisanaturaldisaster, bebrokenbythissituation. Associates Thetoughtimesarealsobeingampli-
fiedbecausegovernmentshavefewer
waystorespondtothem.
Theimmediatecauseoftheturbu-
lenceistheerosionofthreeanchorsthat
Biden cannot
hadkeptmarketssteady,orevenrising,
despitedeterioratingfundamentals.
First,theactualandfearedimpactof
the coronavirus is destroying supply
anddemandsimultaneously.Thishas
turn back underminedthemomentumofglobal
economicgrowth.
Second,centralbanksarenolonger
seenasabletorepressfinancialvolatil-
itythroughinjectionsofliquidityand
ever-lowerinterestrates.Policyinterest
the clock ratesarealreadynegativeinEurope.
Third, Saudi Arabia’s decision to
launchanoilpricewar,whichhassent
the price of crude down more than
20percent,hasimperilledtheviability
ofsmalloilcompaniesandundermined
partsofthecorporatebondmarket.
As a result, elevated asset prices
country’srelationshipwiththeoutside havebeguntofallbacktowherefund-
global affairs
world. Social and political divisions amentals suggest they should trade
within the US, which widened so bru- (evenasfundamentalsarealsodeterio-
Gideon
tally during the past four years, are rating). Because this correction is
Rachman unlikelytogivewaytoaperiodofheal- happening in a disorderly manner,
ing.Onthecontrary,theRepublican thereisariskofcollateraldamagetothe
party now seems committed to the financialworldandtherealeconomy.
nativistTrumpagenda,andthepara-
noidstylethatgoeswithit.ABiden
J ustafterthe2016electionofUS victory after a coronavirus-induced Thereisnothreat
President Donald Trump, a recessionwouldquicklybedismissed
tothebanking
Harvardprofessorremarkedto asillegitimate—oreventheproductofa
me:“IthinktheUScansurvive deep-stateconspiracy. competition”withChina—arguingonly decisionstoquitIraqandnottointer- democracy.MrBidenhasalreadyprom- nervecentreofthe
four years of Trump. Eight The Trump years have also pro- foramorenuancedandintelligentpur- vene in Syria. As vice-president, isedto“makeAmericanmoralagain”.
internationaleconomy
yearsandwe’llreallybeintrouble.” foundly changed the relationship suitofthatstrategy. MrBidenwasevenmorecautious— Buthisdesiretostandupforhuman
NowwiththeemergenceofJoeBiden betweentheUSandChina—whichisat Indeed,itisdistinctlypossiblethat opposingthetroopsurgeintoAfghani- rightsgloballywillswiftlyrunintoreal-
astheprobableDemocraticcandidate theheartoftheglobalorder.Therewill tensions between Washington and stan.The2015nucleardealwithIran— politik(asitsooftendoes).Itishardto Today’sturbulentmarketsrecallhow
torunagainstMrTrumpinNovember benosignificant“reset”inUS-China BeijingwouldincreaseinaBidenpres- destroyedbytheTrumpadministration seeevenaWhiteHouseledbyMrBiden theybehavedinthefinancialcrisis12
—andthepoliticalandeconomicconfu- relations during a Biden presidency. idency—sinceaDemocraticadminis- — will be hard to revive, not least taking a tough line with Narendra yearsago.Sodoesthegrowinglikeli-
sioncausedbycoronavirus—theDemo- BeforeMrTrumpcamealong,itwasthe trationwouldbelikelytoaddhuman becauseofwarinessinTehran. Modi’sIndiainthemidstofaconfronta- hoodofrecessionamongalengthening
cratsaredaringtohopethatMrTrump Democraticpartythatwasthehomeof rightsandtheSouthChinaSeatothelist Manyofthethemesandmaladiesof tionwithChina. listofcountriesthatalreadyincludes
willindeedbegonebyJanuary.Ifthat protectionism in the US. Now both ofdisputes. theTrumpyearswouldthereforecon- ThegrowingauthoritarianismofMr Germany, Italy and Japan. Even so,
weretohappen,manywouldechoGer- majorpartiesharbourstrongprotec- ThoseintheMiddleEastandEurope tinueduringaBidenpresidency.But Modi’sruleinIndiaunderlinesthefact today’ssituation,asunsettlingasitis,
ald Ford, who announced after the tionistsentiments.AndChinaisseen whoyearnforareassertionofAmerican someimportantthingswouldclearly that there has been a global shift to differsinanimportantway.
Watergatescandal,“Ourlongnational not just as an economic rival, but leadership would probably be disap- changeforthebetter.Thedignityofthe nationalismandilliberalismoverthe Becauseitdidnotoriginateamong
nightmareisover”. increasinglyasachallengertoUStech- pointed.ABidenadministrationwould presidencywouldberestoredandtrash- past few years. That shift has been banks,itdoesnotendangerthenerve
ManyEuropeans,hopingforarevival nologicalandgeopoliticalsupremacy. mountacharmoffensiveaimedatUS talking and conspiracy-mongering encouragedbytheTrumpadministra- centre of all modern market-based
ofthewesternalliance,sharethehope Theversionofglobalisationthatexisted alliesandwoulddropsomeoftheinsults wouldnolongerbethenormintheOval tion—butitbeganbeforeMrTrump economies,namelytheirpaymentsand
thattheTrumppresidencymightsoon beforetheadventoftheTrumppresi- and threats that emanate from the Office.Expertiseandprofessionalismin took office and the changes it has settlementssystems.
bedismissedasaweirdaberration— dencywillnotberestored. Trump White House. But America’s publiclifewouldberespectedagainand broughtaboutwillpersist,evenifhe Unfortunately,todayisalsodifferent
andthatanadministrationledbythe Inarecentarticle,twooftheDemo- pullbackfromtheMiddleEastbegan some of the damage Mr Trump has leaves.Brexitwillstilltakeplace.Reac- from2008inlessreassuringways.
formervice-presidentwouldeffectively crats’leadingforeign-policythinkers, during the Obama years with the inflicted on branches of the govern- tionarynationalistswillstillbeinpower Governmentsarestartingtheirrace
resetthegeopoliticalcalendartoJanu- Kurt Campbell and Jake Sullivan, ment,suchastheDepartmentofJustice, inChina,Russia,Brazil,India,Turkey toaddresstoday’sturmoilfromalag-
ary20,2017,thedayBarackObamaleft endorsedthe“growingconsensusthat would be repaired. Crucially, the US and Saudi Arabia. America’s relative gingposition.Fortoolong,theypursued
office.Itisaniceidea.Anditisonethat theeraofengagementwithChinahas Theideathatavictoryfor would rejoin international efforts to powerwillstillbeindecline.Looking an unbalanced economic policy mix
MrBiden,withhisreferencesto“my cometoanunceremoniousclose”.Mr tackleclimatechange. out from the Oval Office, Mr Biden thatreliedonmonetarypolicytosup-
theformervice-president
buddy,Barack”,hasencouraged.Butit Sullivan and Mr Campbell, both of A Biden administration would cer- would survey a very different world portgrowth.Toomuchpolicyammun-
isalsoanillusion. whomwouldbelikelytotakeseniorjobs wouldresetthegeopolitical tainly attempt to reassert America’s fromtheoneMrObamaleftbehind. itionhasalsobeenfiredinefficiently—
The Trump years have profoundly inaBidenadministration,acceptthe moral leadership, by re-emphasising suchaslastweek’s50basispointrate
calendarisanillusion
changed both America itself and the Trump team’s concept of “strategic theimportanceofhumanrightsand [email protected] cutbytheUSFederalReserve,which
wasill-receivedbymarkets.
Tostopwhatcouldbecomeavicious
cycle,whereaworseningrealeconomy
dragsdownmarketsandmarketsthen
A reminder of the iron law of politics dragdowntheeconomy,governments
mustnowdoseveralthings.
Theymustuselaser-targetedmeas-
urestocreateasustainableeconomic
floor. These could include medical
ButthentheUKisstillmeasuringthe Thereisnobenefitinasharp-suited welfarepayments.Hecanarguethattax gigeconomyworkerswhoneedtoself- measuresthathelpcontainthevirus,
BRITAIN outbreakinthehundreds.Ultimately politician in London smugly telling revenuesrosebutthismissesthepoint. isolate. We are demanding altruistic suchasfreecoronavirustesting;policies
theresponsewillbejudgedbythepop- votersBritainisboomingifitdoesnot Beforethatdecisionhewasclaiming actionfrompeoplewhoexperiencea to protect society’s most vulnerable,
Robert
ulation’s direct experience. Were the feelthatwaytothem;iftheirexperience that,“Weareallinthistogether”.After- weaker contract with society and to suchasfreetreatmenttoAmericans
Shrimsley desperately ill denied respirators or is cuts to public services and their wards,votersknewthatweweren’t. whomemployersfeellittleduty). withouthealthinsurance;andwaysto
hospitalbeds?DidtheNationalHealth children moving away to find a job. Thesuccessofnationalistpopulism— One can be entirely cynical of Mr easespecificfinancialmarketmalfunc-
Servicecareforourmothers?Didshops Economicallytheglobalistshadastrong fromMrTrumptoBrexit—hasbeen Johnson’spolitics.Hewillstruggleto tions,suchasilliquidity.
runoutoffood?AnNHSunabletocope case — good public services require builtonakeenerappreciationofthis squarehisglobalBritainrhetoricwith These measures must also use a
willdoMrJohnsondamage,hencethe astrongeconomy—buttheyconvinced ironlaw.Thehardtruthforliberalinter- hisactions.HisBrexitstancemaycause co-ordinated “whole of government”
W hen you think about emphasisonslowingthespread. themselvestheyhadwontheargument nationalistsisthattherighthasunder- moreeconomicdamagethancanberec- approach.Therehasbeentoomuchreli-
coronavirus, what is Thereisnothingremarkableorwrong inperpetuityandforgottheironlaw. stoodthisbetter.Thenewthirdwayis tifiedbylocalpolicies;hisimmigration anceoncentralbankactiontoboost
your thought process? in this ingrained behaviour. But it lessaboutthepathbetweencontrolled policymaybetoohardlinefortheneeds growth;governmentsmustnowpursue
Perhapsifyouareapol- shouldremindusthatthisishowmost andcapitalisteconomicsthantheroute ofkeysectors.Butheandhisallieshave trueproductivity-enhancingreforms.
icymaker or a global peopleviewpolitics.Thephrase“allpol- Loftyideasaboutopen betweenlocalismandglobalism. understood,fasterthanhisrivals,that Lastly,theremustbesupplementary
businessleaderyouthinkaboutthehit iticsislocal”,mostwidelyassociated MrJohnson’sBrexitadvocacymakes theironlawcannotbegainsaidandheis internationalco-ordinationtoestablish
economieswillhaveto
toeconomicgrowth.Butotherwisethe withTipONeill,formerSpeakerofthe him an unconvincing pilot for this closertoanewthirdwaythanhisene- whatcollectiveactionscanbedeployed.
likelihoodisthatyourthoughtsareof USHouseofRepresentatives,isperhaps besoldondirectly course.Buttheprimeministerunder- mieswouldliketoadmit. Thefasterthisisdone,thestronger
therisktoyouandyourfamily,followed theonlyrealironlawofpolitics.Atone standstheapproachevenifwedoubthis Globalistsmayarguethiscrisisproves theeconomicturnroundwillbe.That
improvingvoters’lives
by concentric rings of friends, col- level,MPsunderstandthiswell.They commitmenttoit.Hisaimistoshow theneedforinternationalco-operation. eventualrecoverywillbeturbocharged
leaguesandsoon.Dowehavevulner- knowhowanyissueplaysintheirseat. peoplethattheirvoicesarebeingheard, Butrecentyearssuggestthecasefor byextremelylowmortgageratesand
ablerelatives?Howwillwegettowork? Takefuelduties.Globally,MPsseethe Progressive leaders like Tony Blair that their schools and hospitals will openeconomiesisgoingtohavetobe energyprices,bothofwhichboostcon-
Willmyjobbesafe?ShouldIstockpile? needforgreentaxes;locallytheyknow and Bill Clinton, and other so-called improve.Hisdemandfor“levellingup” remadewithanunswervingeyetowards sumerpurchasingpower.Thequicker
Fornow,BorisJohnson’sgovernment howmanyvotersrelyoncars. thirdwaysocialdemocrats,hadarising isarecognitionoftheneedformore localbenefits.Thosewhowishtobeat thatmarketsseethiscoming,thefaster
isbeingjudgedimpressionisticallyonits Yetonereasonfortheriseofpopulist economictideliftingallboatstomanage equitableredistributionoftherewards MrJohnsonandhisilkmustfindanew they will snap back. And this time,
handlingofthecrisisintheUK.Voters movementsisthattoomanyleadersfor- thetensionbetweenglobalisationand ofanopeneconomy. waytoframetheirarguments,todem- unlikein2008,thatsnapbackandeco-
aregivinghimthebenefitofthedoubt. gotthislaw.IntheUK,astoomanyof communities.The2008financialcrisis Ifallpoliticsislocalthenlocalism onstratetoallvotershowloftyideals nomicrecoverywillrestonmoregenu-
Britscancongratulatethemselveson globalisation’sspoilsstayedintheafflu- changed that. There are few better mustinformallpolitics.(Thisiswhy willdirectlyimprovetheirownlives. ineandlastingunderpinnings.
the measured intelligence of Chris entsoutheastofEngland,itscausewas examplesofglobalistdisconnectthan Labour leadership contender Lisa Coronavirusisaglobalphenomenon
Whitty,thechiefmedicalofficer,and championed in abstract concepts, GeorgeOsborne’s2012decision,while Nandyisrighttohighlightbetterbus experiencedlocally.Soagainispolitics. The writer is Allianz’s chief economic
anevidence-baseddebateoverwhether explainingthebenefitsoffreetradeor UKchancellor,tocutthetoprateof networks and why, in this crisis, adviser and president-elect of Queens’
toshutdownpartsoftheeconomy. immigrationtogrossdomesticproduct. income tax even as he was cutting ministersarerighttopledgehelpfor [email protected] College,UniversityofCambridge
MARCH 10 2020 Section:Features Time: 9/3/2020 - 18:37 User: alistair.hayes Page Name: COMMENT USA, Part,Page,Edition: USA, 9, 1
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Aon/Willis: a bad day for a big deal
InsurerAonhasagreedtobuyrivalWillisTowersWatson.Combiningtheworld’ssecondandthird-largest
insurancebrokerswillcreateabusinesswithsalesofover$20bn.Aon’spaperismorehighlyvalued,though
bothcompanies’shareshavebeenhithardbythemarketdownturn.
Share prices Financials
Twitter:@FTLex
Rebased $bn, 2019
Aon Willis Towers Watson
200
Aon Total revenue
Coronavirus/oilprice: Russia’soilisininhospitableSiberia. Twitter/Elliott:
Withoutinvestment,supplywilldrop
180
endgamerehearsal andpriceswillrebound. Operating income peaceinourtime
Buteachbouncewillbesmallerthe
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awargame.RussiaandSaudiArabia tracktophasingouthydrocarbons. questionishowlongwillhewantto.
0 2 4 6 8 10 12
arelettingcoronavirusdragdownthe Yesterday,Twitterannouncedthatits
140 Valuations
oilpriceunimpededbyoutputcuts. Willis Towers chiefexecutivehadstruckasettlement
TheaimistomaimoverleveragedUS Italy/baddebts: Watson Price to forward earnings ratio withElliottManagementthatwill
shaleproducers.Brentcrudeprices 120 avoidaforthcomingproxyfight.
theunluckycountry 22
plunged21percentyesterday.The Aon JesseCohn,startechnologyinvestor
showdownforeshadowsthescramble 20 attheactivisthedgefund,willjointhe
formarketsharealow-carbon NorthernItaly’sbankershaveholedup 100 18 board.ThebiggestsurpriseisthatMr
economywillbring. intheirsummerretreatsearly.Many S&P 500 Financials index 16 Dorseywillhaveanotherminder.Silver
ThebromancebetweenMohammed areworkingremotelytoreduce Lake,thepre-eminenttechnology
80 14
binSalmanal-Saud,thekingdom’s coronaviruscontagionrisks.Butthe Willis Towers Watson privateequityfirm,willbuya$1bn
2017 18 19 20 12
crownprince,andRussianpeer damagetoItaly’sstrongestregional stakeinthesocialnetwork.Itsown
VladimirPutinisontherocks.Russia economyhasalreadybeendone. FT graphic Sources: Refinitiv; companies 2017 18 19 20 luminary,EgonDurban,willoccupya
fearscedingmorebusinesstoUS Travelisrestrictedandpublic seatintheboardroom.
producers.ItrejectedSaudidemands gatheringsbanned.Twostepsforward Aonisinthebusinessofconnecting ofAonbossGregCase.Theinsurance Jardine.Thatfigurefallstojust6per Twitteragreedtoaseriesof
foranOpec+productioncutof1.1m andonestepbackforItalianbanks: companieswithinsurerstofindthe industryisunderpressurefromlow centafteryesterday’sglobalmarket governancechanges,openingitselfto
barrelsperday.Instead,bothare booksofbadloans,painfullywhittled bestdeals.Theinsurancebroker interestratesthatareheadingever routwipedmorethan17percentoff sharperoversight.Itwillcreatea
expectedtopumpmore. down,aresettobulgeagain. thinksithaslandeditsownbargain lower.Brokersdependon Aonshares. “managementstructure”committee
Previouslyoilstrategistspredicteda Themediaterm“lockdown” witha$30bnall-shareswooponrival commissions,butarealsofeelingthe The$800mofannualcostsavings withfiveindependentdirectors.ACEO
1m-plusbarrel-per-daygainin exaggeratesgovernmentcurbs, WillisTowersWatson.Aonhas squeeze.Scalingupletsthempool thatAonisforecasting,worthover successionplanwillbedrawnup.
consumptionthisyear.Thanksto accordingtosomeItalians.Disruption offered1.08ofitssharesforeachof resources.Marsh&McLennan $6bntaxedandcapitalised,willeasily Othergovernancechangesinclude
coronavirus,thatcouldnowbezero. isstillsevere.Earlyforecastsofonly itstarget.Shareholdersinthetwo cementeditspositionastheworld’s coverthepremium. electingtheentireTwitterboardyearly.
Russiahasmoretoloseinthis marginaleconomicshrinkagelooktoo companiesshouldstepback largestinsurancebrokerlastyearwhen Assuch,Aonisnotpayingmuchto Elliotthasagreednottorunaproxy
punch-up.Itcannoteasilyoffsetanyoil optimistic.Thenorthwilltakeaheavy scepticallyfromadeallaunched itboughtJardineLloydThompson take67percentofthenewcombined fightthisyear.Asperthearrangement,
pricedeclineswithmorevolume; hitfromamanufacturingslowdown amidamarketrout. Groupfor£4.3bn.Williswasitself company.Insteadthechallengewill itisfreetodosoin2021.MrDorseyis
productionisatpeaklevels.TheSaudis andreducedtourismrevenues. Thedealcomesnearlyayearafter formedfromthe2015mergerbetween comeintheformofintegration. gettingawaytobowoutgracefully
havecapacitytoincreasebyupto1.3m Italianbanks’painisworsenedby Aonabandonedplanstobidfor WillisandTowersWatson. Marshhassufferedaseriesofhigh- before—especiallyifanyturnround
barrelsperday.Thekingdom’soilfields thegovernment’sweakposition.This Willis.Thetransactionwouldbring Beforeyesterday’scollapse,a30per profilestafflossesatJLTsinceits attemptdoesnottakeholdquickly.
makemoneyevenwithpricesaslowas willstruggletodeliverstimulus.State togethertheindustry’snumbertwo centrallyinitssharepriceoverthe takeover. Twitterhaspromiseda$2bn
$13perbarrel,saysRystadEnergy. debtsare130percentofgrossdomestic andthreetocreatetheworld’s previousyearhadgivenAonmoredeal Investorsneedtofeelhappywith buyback.Lexisagainstthese.Butthe
Russiandrillers,suchasRosneft, product,morethantwiceGermany’s biggestinsurancebrokerageby currency.BasedonFriday’sclosing thedeal,aswellastopsalespeople. painintheequitymarketsmayallow
havetriplethosecosts.Initsfavour, figure.Italian10-yearbondsborearisk revenue.Assuch,thetie-upfaces price,Aonwasofferinga16percent Theywouldberighttoaskwhether foranexception.Twitterwillalsosella
Russiaassumesalowoilpriceof$30 premiumofmorethan1percentage antitrustchallenges. premiumforWillis,orabouthalfthe termsshouldberevisedtoreflectthe $1bnconvertiblebondtoSilverLake.
foritsbudget.Afloatingrouble,down pointoverBundsuntilFebruary.That Youcannotfaulttheopportunism premiumthatMarshpaidtoacquire crashinworldmarkets. Thiscomeswithaslightcouponand
nearlyafifththisyear,absorbssomeof spreadhasalmostdoubled. willofferthesharesatapremium,so
thepain.RussiaandSaudiArabia InvestorsaresellingoffItalianbank farundisclosed.
assumeUSshalecrudeproducerswill stockspartlyasproxiesforthe SilverLakekickedaroundtheideaof
droptoolssoon.Understandablythis sovereigndebtthatlendershold.The valuerespectively.Theonlycomfortin Group.Shrewdacquisitionsareturning £100mannuallyontechnologyalone buyingallofTwitterlastyearwhenits
groupofindebteddrillers,lessableto securitiesaredeemedrisk-freeonlyin thiscrisisisthatitmayallowthemto GorgonzolaHall,astheboursewas bycombiningwithRefinitiv. fortunesslid.Suchadealcouldbeeven
sourcecapitalthanfiveyearsago,look thefantasyworldofcentralbankers. acquiresmallerlendersatlowercost. knowninVictoriantimes,intoa Brussels,foritspart,worriesits moreappetisingnow,amidthemarket
vulnerable.SodoUK-listedexplorers, Thegovernmenthasdecreedthat verticallyintegrateddatapowerhouse. regulations,suchastheMifidIIassault rout.Twitter’scurrententerprisevalue
suchasPremierOil.Itsshares banksextendpaymenttermsfor The$27bnproposedpurchaseof onequityresearch,havenotbrought isjustover$20bn.
collapsed54percentyesterday.It strugglingbusinesses.Badloansareset FCA/LSE: Refinitivisthelatestflourish.Itshould downdatapricesasmuchasexpected. SilverLakehasfirepower.Plentyof
looksdeeplychallenged. toballoonagain.Nevermindthat addaraftofanalyticsandtrading Watchdogs,donningtheperiwigof otherbigticketinvestorshavedry
blithespigots
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cent,shouldhaveaneasiertime.But businesssince2015.IntesaSanpaolo, Dataisnotthenewcrudeoil.Thinkof transactionisalreadythesubjectof margin. LSE’sebitdamarginsare Forallthebrevityofusers’messages,
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shouldertothesector.Energyasa performingloanstojust3.6percent. valued.Bigtechgroupssuchas Onecanseewhytheexchangeslikes thepast12months,onlyataddownon articulateasnappybusinessmission.
proportionoftheall-countryMSCI Thatdifferenceisnotthemain Facebookgrabtheheadlinesfor thedatabusiness.Revenuesarehigh 2016’sfigure59percent. Inthecurrentuglybearmarket,public
indexhasslidtowards20-yearlows. reasonthatUniCreditsharesaredown aggregatingsomuchofit.Yetthose andrising,especiallyfromtheFTSE Financialdatapourforthfromthe marketinvestorscouldwelcomeabid
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whendemandcollapsesunderpressure Intesa’s. Milan’sUnicreditgetslittle worryinvestorsarebeingrippedoff. passiveinvestment.Incontrast, FCAhasquestionedthehighmargins
fromrisingrenewableenergyoutput. creditforgeographicdiversification. Britain’sFinancialConductAuthority commissionsfromsecuritiestrading ofassetmanagers—forcingthemto
Russiawilllosethisgametoo.Saudi ItsTurin-basedrivalIntesagetsa launchedareviewyesterday. aredropping.Combiningdatagroups declaretheirresearchcosts—itisright Lexontheweb
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storiesgotowww.ft.com/lex
inemissionsaswellasmoney.Muchof isabuyat0.3timesand0.6timesbook searchingatLondonStockExchange TheLSEthinksitcansavemorethan withsometimestwicetheprofitability.
CROSSWORD ACROSS 5 Boob half glimpsed, you say?
No. 16,421 Set by MOO 1 Woman in Congress almost That’s awfully rude (7)
completely mad (6) 6 Aren’t rats dreadful round
4 Philosopher makes old actress university cafe? (10)
(cid:20) (cid:21) (cid:22) (cid:23) (cid:24) (cid:25) (cid:26) (cid:27) sad (8) 7 Time to get behind the
10 Her Majesty feeding groups of President (5)
(cid:28) crows? They’ve got a taste for 8 Mountain range in South Africa?
blood (9) I’m mistaken (6)
(cid:20)(cid:19) (cid:20)(cid:20)
11 Rudeness of reporter’s 9 Cheerfulness of Italian put in
informant (5) charge (6)
12 Put phone back (4) 14 Huge fuss about Russian leader.
(cid:20)(cid:21) (cid:20)(cid:22) 13 Water pipe repair ultimately He’s got his eye on you! (3,7)
botched. Bugger! (10) 17 Argentine bananas, or some
(cid:20)(cid:23)
15 Horribly fizzy wine left in New other fruit? (9)
(cid:20)(cid:24) (cid:20)(cid:25) (cid:20)(cid:26) York (7) 18 Hostility on ship’s uncalled for
16 Mistakes in Cicero’s writings? (8)
(cid:20)(cid:27) (6) 20 Order German crime writer to
19 Slippery Boris adopts American appear first (7)
(cid:20)(cid:28) (cid:21)(cid:19) (cid:21)(cid:20)
line (6) 21 Champion swimmer’s assistants
(cid:21)(cid:21) 21 Punishment for article coming under pressure (6)
skewering vice president (7) 22 Zippy vehicle leaving behind
(cid:21)(cid:22) (cid:21)(cid:23) (cid:21)(cid:24) 23 Bloody Tory set up! (10) one old duck (6)
25 Went to get some dope (4) 24 Nigerian coins new word for
(cid:21)(cid:25) 27 Model that’s drunk shows a bit song on journey north (5)
(cid:21)(cid:26) (cid:21)(cid:27) of leg (5) 26 A bitter constituent (4)
28 Jam is better outside! (9) Solution 16,420
29 A violent outburst on the way?
(4,4) (cid:41) (cid:36) (cid:44) (cid:53)(cid:42)(cid:53)(cid:50)(cid:56) (cid:49) (cid:39) (cid:37) (cid:40) (cid:36) (cid:53)
(cid:21)(cid:28) (cid:22)(cid:19) 30 Judge’s son enthralled by (cid:37) (cid:56) (cid:56) (cid:49) (cid:50) (cid:53) (cid:49)
(cid:41) (cid:36) (cid:53)(cid:48) (cid:54) (cid:44) (cid:39) (cid:40) (cid:38) (cid:43) (cid:36) (cid:51) (cid:40) (cid:47)
clowns (6) (cid:47) (cid:37) (cid:43) (cid:40) (cid:44) (cid:48) (cid:48)
(cid:51) (cid:50) (cid:55) (cid:36) (cid:54) (cid:43) (cid:53) (cid:56) (cid:47) (cid:40) (cid:37) (cid:50)(cid:50) (cid:46)
JOTTER PAD DOWN (cid:49) (cid:50) (cid:55) (cid:40) (cid:47) (cid:49)
(cid:57) (cid:40) (cid:53)(cid:48)(cid:50)(cid:56) (cid:55) (cid:43) (cid:44) (cid:55) (cid:40) (cid:48)
1 Amateurish jewellery you wear (cid:40) (cid:53) (cid:40) (cid:37) (cid:49)
on your bottom? (8) (cid:54) (cid:55)(cid:36) (cid:42) (cid:58)(cid:53) (cid:36) (cid:49)(cid:42) (cid:47) (cid:40) (cid:53)
2 He fancied himself a handsome (cid:53) (cid:36) (cid:42) (cid:40) (cid:38) (cid:49)
(cid:38) (cid:36) (cid:49) (cid:37) (cid:40) (cid:53) (cid:53) (cid:36) (cid:43) (cid:40) (cid:53) (cid:36) (cid:47) (cid:39)
chap in bed (9) (cid:44) (cid:56) (cid:50) (cid:55) (cid:40) (cid:40) (cid:36)
3 Garden delighted English (cid:36) (cid:51) (cid:50)(cid:38) (cid:53) (cid:60)(cid:51) (cid:43) (cid:36) (cid:47) (cid:36) (cid:38) (cid:53) (cid:40)
nurses (4) (cid:54) (cid:46) (cid:49) (cid:40) (cid:50) (cid:47) (cid:42)
(cid:48)(cid:40) (cid:54) (cid:54) (cid:40) (cid:36) (cid:53) (cid:55) (cid:53) (cid:56)(cid:48)(cid:51) (cid:40) (cid:55)
MARCH 10 2020 Section:FrontBack Time: 9/3/2020 - 18:47 User: joe.russ Page Name: 1BACK, Part,Page,Edition: EUR, 10, 1