Sunny Stockholm – Getty
Stockholm looks bright and brisk today, unlike some of the scientists and government officials who were heading into a large brick conference centre on the city’s waterfront at 8am this morning.
They had been working through the night until 2:30am to finalise the most comprehensive climate science report in six years for the UN’s Intergovernmental Panel on Climate Change.
The bulk of the report is finished, having been drafted by 259 scientists from 39 countries over the last four years, with the help of more than 600 contributing authors.
The Stockholm meeting, which started on Monday and is closed to the public and journalists, is finishing its most widely-read section: a 31-page summary for policymakers that governments have to approve before release, in consultation with some of the scientists who wrote it.
The summary is based on the larger report and its basic conclusion – that human influence on the climate caused most of the global warming recorded since 1951 – cannot change.
But the way its many findings are expressed are very much up for debate and with just one day left before the summary is due to be released on Friday morning, delegates are braced for another long night tonight. Read more
It’s no secret that the US is at the centre of global trade. But how is what it trades with the world changing? The US International Trade Commission, the independent government agency which investigates anti-dumping cases in the US and also acts as a trade data clearinghouse, this week put out its annual “Shifts in US Merchandise” report. Here’s four things in the report worth thinking about:
1. Americans love their cars and their iPhones. They were the biggest contributors to the $10bn widening of the US trade deficit in 2012. Read more
By Catherine Contiguglia
♦ Emerging market currencies are sliding as the beginning of the end looms for the US Federal Reserve’s ultra-loose monetary policy, and economic growth continues to stagnate while current account deficits grow. India’s rupee is leading the drop after a clumsy policy response spooked investors. Though policy makers are now focused on reducing the current account deficit and foreign currency reserves are much stronger than they were before the 1991 balance of payments crisis, the size of India’s economy means any downturn could have a significant impact on the global economy.
♦ Saudi Arabia is backing Egypt’s military rulers with oil money and diplomatic might and that could well undercut US and European efforts to apply pressure by cutting aid to Cairo following the bloody crackdown by Egyptian security forces on Islamist supporters of deposed president Mohamed Morsi.
♦ “It may not be long before it will be impossible for journalists to have confidential sources,” writes the Guardian editor Alan Rusbridger, reflecting on the recent detainment of a reporter’s partner in connection with the paper’s publication of information from US National Security Agency whistleblower Edward Snowden.
♦ A detail not often noted about Turkey’s Gezi protests is that many of the frontline protesters have been women, whose situation has lagged far behind international standards on almost every measure in the ten years Prime Minister Recep Tayppid Erdogan has been in office.
♦ The economic gap between blacks and whites in the United States has not budged for 50 years, the Washington Post points out in a set of charts that show how “yawning” disparities have persisted since 1963.” Read more
Ben Bernanke makes what is likely to be his final appearance before Congress this week. The Federal Reserve chief repeats the central bank’s intention to slow its $85bn a month in asset purchases later this year if the economy stays strong, but says that would not mean a weakening of Fed support for the US economy.
By James Politi in Washington. All times are BST
Jacob Frenkel, currently a chairman of JPMorgan International, will return as governor of the central bank of Israel, 13 years after leaving in 2000. He is taking over from the respected Stanley Fischer who will resign June 30, in an economic environment of slowing growth and rising property prices. Here is a handful of interesting reads (and a video) on his appointment and his past. Read more
Was it the man or the country? Roberto Azevêdo is a polished negotiator, a seasoned trade diplomat and in many ways a perfect pick to head the World Trade Organization.
He knows his way around the Geneva-based organisation, can hit the ground running fully briefed on all the issues, and is well known and liked around the developing world – not least for his record of criticising the farm-subsidy policies of the USA and Europe. If anyone can revive the Doha round of trade talks, launched 12 years ago in an attempt to cut tariffs and trade-distorting farm subsidies around the world but now on life-support, it is surely him.
Yet Azevêdo, 55, is also Brazilian, a country with a patchy record on trade liberalisation and little openness to the rest of the world. Trade accounts for only 20 per cent of Brazilian gross domestic product. Brazil is also the leading member of Mercosul, a regional Latin American trade pact created in 1991 with great hopes that have since foundered. If Brazil can’t boost trade locally, what chance it can boost trade globally? Azevêdo’s nationality therefore makes him an unlikely leader of the WTO, especially as the organisation’s role as a broker of ambitious trade deals is in doubt given the rise of so many regional trade initiatives, such as the mooted US-European trade deal and the Trans-Pacific Partnership. Read more
Austerity appears to be an increasingly dirty word in Europe. The past week alone has seen European Commission President José Manuel Barroso, Bill Gross of Pimco and Italy’s new prime minister Enrico Letta calling for an easing of austerity.
Spain’s surpassing of the 6m unemployed mark on Thursday added fuel to the debate. But even in Germany, the austerity police of the eurozone, cracks are beginning to show ahead of the elections with the emergence of an anti-euro party.
a) Are there any austerians left? Yes. Here are some of them.
- UK: Chancellor George Osborne hit back at criticism over his apparent excessive austerity by claiming there is no other alternative. And after a tough week when he was criticised by the IMF over the excessive pace of his austerity programme, this week has brought better fortunes for his stance as figures showed a lower deficit and the economy expanded 0.3 per cent in the first quarter.
- Germany: Chancellor Angela Merkel’s view as articulated this week couldn’t be clearer: “I call it balancing the budget. Everyone else is using this term austerity. That makes it sound like something truly evil.” Germany is the only eurozone country with a 2012 budget surplus.
- US: The situation here is different because of sequestration, which triggered automatic spending cuts and tax rises. And the White House faces a July deadline to raise the borrowing limit or default on its debt.
- Latvia: The tiny Baltic state is emerging from a state of uber austerity – part of its bid to join the euro later this year – and it could end up being seen as a poster child for successful deficit cutting implementation, with real growth of more than 5 per cent in 2011 and 2012, despite the broader recession in Europe.
- Spain: The push by Europe’s fourth-largest economy to cut spending and raise taxes has led to record unemployment topping 6m for the first time in its recent history. The government of Mariano Rajoy announced economic reforms and structural measures on Friday.
- Italy: The technocrat government of Mario Monti has been steadfast in carrying out fiscal consolidation. All eyes will be on Mr Letta, who has already said: “Europe’s policy of austerity is no longer sufficient”. Read more
Across the world, the ability of multinationals to exploit cracks in the international tax system has angered an austerity-weary public. But as policy makers draw up plans to close such gaps, the spotlight has fallen on the countries that help them pay less tax. Does it really make financial sense for Ireland to have a corporate tax rate of 12.5 per cent? Why are some American states looking to cut their corporate tax rates even as they struggle to pay for basic services? Why do countries compete instead of collaborate on tax?
As part of a new Financial Times’ series, the Great Tax Race, the FT’s taxation correspondent Vanessa Houlder was online on The World Blog on Tuesday and answered your questions about tax avoidance. Please see the comments section for her answers.
Here is a sample of some of the pieces in the series: Read more