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Business Standard
5 days ago
- Business
- Business Standard
EU targets Russia's energy revenue, shadow fleet with new sanctions
The European Union approved on Friday a new raft of sanctions against Russia over its war on Ukraine, including a lower oil price cap, a ban on transactions with Nord Stream gas pipelines, and the targeting of more shadow fleet ships, EU foreign policy chief Kaja Kallas said. The message is clear: Europe will not back down in its support for Ukraine. The EU will keep raising the pressure until Russia ends its war, Kallas said in a statement. Kallas said the EU move amounts to one of its strongest sanctions packages against Russia to date, linked to the war, which is now in its fourth year. It comes as European countries start to buy US weapons for Ukraine to help the country better defend itself. The European Commission, the EU's executive branch, had proposed to lower the oil price cap from $60 to $45, which is lower than the market price, to target Russia's vast energy revenues. The EU had hoped to get major international powers in the Group of Seven countries involved in the price cap to broaden the impact, but conflict in the Middle East pushed up oil prices, and the Trump administration could not be brought on board. In 2023, Ukraine's Western allies limited sales of Russian oil to $60 per barrel, but the price cap was largely symbolic as most of Moscow's crude its main moneymaker cost less than that. Still, the cap was there in case oil prices rose. Oil income is the linchpin of Russia's economy, allowing President Vladimir Putin to pour money into the armed forces without worsening inflation for everyday people and avoiding a currency collapse. The EU has also targeted the Nord Stream pipelines between Russia and Germany to prevent Putin from generating any revenue from them in future, notably by discouraging would-be investors. Russian energy giant Rosneft's refinery in India was hit as well. The pipelines were built to carry Russian natural gas to Germany but are not in operation. They were targeted by sabotage in 2022, but the source of the underwater explosions has remained a major international mystery. On top of that, the new EU sanctions targeted Russia's banking sector, with the aim of limiting the Kremlin's ability to raise funds or carry out financial transactions. Two Chinese banks were added to the list. The EU has slapped several rounds of sanctions on Russia since Putin ordered his troops into Ukraine on February 24, 2022. More than 2,400 officials and entities often government agencies, banks, companies or organisations have been hit with asset freezes and travel bans. But each round of sanctions is getting harder to agree on, as measures targeting Russia bite the economies of the 27 member nations. Slovakia held up the latest package over concerns about proposals to stop Russian gas supplies, which it relies on. The last raft of EU sanctions, imposed on May 20, targeted almost 200 ships in Russia's sanction-busting shadow fleet of tankers. Friday's measures added more than 100 ships to the list.
Reuters
7 days ago
- Business
- Reuters
Breakingviews - Guest view: The City of London requires a strategy
LONDON, July 14 (Reuters Breakingviews) - A coherent strategy to foster the growth and competitiveness of the United Kingdom's financial services sector is long overdue. Britain is the second-largest exporter of financial services in the Group of Seven rich economies. The industry, as the Chancellor Rachel Reeves has observed, is the crown jewel in the UK economy. Yet output in financial services has declined since the millennium, particularly since Britain left the European Union, while other services sectors in the UK have powered ahead. Although not the implosion some predicted, the City of London has been suffering a slow puncture as business and jobs in wholesale finance gravitate to the EU and other global financial centres like Singapore, Dubai, and New York. Brexit cost the City some 40,000 jobs according to former Lord Mayor Michael Mainelli, but that is only part of the story. One of the legacies of leaving the EU is that many of the new jobs in wholesale finance are now created in other capitals. One big U.S. investment bank expects the proportion of jobs based in London relative to EU financial centres to shift over time from 90% to more like 60%. Mending the City's puncture demands a comprehensive top-down strategy based on both its strengths as well as the headwinds it faces. So far attempts to address the City's problems have been sticking plaster solutions, involving a half dozen uncoordinated reviews. Some, such as the UK Listings Review conducted by former EU commissioner Jonathan Hill, came up with sensible recommendations. But an overarching strategy has been sadly lacking. Reeves has the chance to change this when she unveils her plan for financial services on Tuesday. There is much at stake. Financial and professional services account for more than 12% of total UK tax receipts – more than the whole education budget. There is also significant opportunity. Trust is a critical commodity that helped the City achieve its position as the leading global intermediary in wholesale finance, managing international capital flows, international investment, and dispensing advice. The uncertainty engendered both by U.S. President Donald Trump's administration and geopolitical tensions makes London's reputation more valuable. However, the chancellor needs to tackle challenges and weaknesses. For starters, the regulatory burden on the City is unnecessarily high. Politicians and watchdogs need to draw a sharper distinction between safeguards for domestic consumers and rules governing wholesale and international activity. Anecdotal evidence suggests that the compliance burden in the UK is higher and more expensive than needed, and lead times for authorisation of new entrants unduly long. The Financial Conduct Authority recognises this difficulty and is now on a mission, opens new tab to reduce regulatory complexity and the administrative burden in wholesale markets. It is also providing extra support for wholesale, payments and crypto assets firms seeking approval to set up in the UK. Then there is the much-debated issue of how much society should be protected from financial failures. Reeves needs to set the tone by clarifying that the public should not expect 100% protection when things go wrong, and by providing unambiguous guidance to regulators about the degree of risk appetite acceptable in international and wholesale finance. There is no point blaming regulators for being too cautious when politicians' expectations and the legislation they have passed drives those bodies to be risk averse. Britain also needs to encourage a move more towards a standards-based regulatory approach to international and wholesale finance, based on outputs rather than binary 'blackline' rules. Such regulations are necessary in areas such as authorisation and capital adequacy. But writing specific rules to cover new, complex, and fast-changing areas of financial activity can be both stultifying and inhibiting. Standards of good practice developed by practitioners have proved an effective complement to FCA regulation in the fixed income markets through the work of the Financial Markets Standards Board, which was set up with official endorsement in the wake of the Libor and foreign exchange scandals. The Standards Board for Alternative Investments has also been effective at promoting good practice in the hedge fund industry. Standards can also be much more effective in new areas such as artificial intelligence, green finance, and cryptocurrencies, where the required outputs can be defined but the means of delivery are fluid. Moving further in this direction should be part of the government's strategy. The UK must also ensure it shows a welcoming face to the talented individuals required in a leading international financial centre, at a time when technology and AI are reaping huge changes. It is unfortunate that many highly paid, wealthy individuals have been leaving the UK, in part because of the abolition of tax breaks for 'non-domiciled' residents. It is welcome that the government appears to be reconsidering its decision to make these individuals' worldwide assets subject to inheritance tax. Finally, there is the EU. With the relationship between the two undergoing a reset, the government should take a hard look at where they can benefit from working more closely together in financial services. Both sides want to strengthen their capital markets and encourage productive investment by life insurance companies and pension funds. As the governor of the Bank of England suggested recently there can be benefits to both sides in closer alignment in financial services. Of course, any dynamic alignment with EU rules will provoke accusations of squandering the opportunities of Brexit. But Britain must face up to the inevitable tradeoffs. Would greater access to the EU financial services market in return for a degree of rule-taking be better than the position the UK is now in? The government has already accepted that dynamic alignment with EU standards on food safety and animal welfare will benefit farmers and the public. So far, the government's main regulatory preoccupation has been to encourage more investment in infrastructure by pension funds. Whatever the merits of this idea, the emphasis should be on developing a strategy for the UK's entire wholesale financial activity. The City's great strength is as an international intermediary. The issues are complex, which is why they have not been tackled before. But there is too much at stake, both fiscally and in terms of influence, to miss this opportunity to preserve and strengthen the City's position.
24-06-2025
- Business
Akazawa Plans to Visit U.S. Soon for Next Round of Tariff Talks
News from Japan Economy Jun 24, 2025 15:16 (JST) Tokyo, June 24 (Jiji Press)--Japanese economic revitalization minister Ryosei Akazawa is planning to visit the United States from Thursday at the earliest for the next round of tariff negotiations, it was learned Tuesday. The possible U.S. visit, which would be the seventh for Akazawa since taking office, comes as the July 9 expiration of the suspension of additional U.S. reciprocal tariffs approaches. Initially, the Japanese and U.S. governments had aimed to conclude the tariff negotiations when Japanese Prime Minister Shigeru Ishiba and U.S. President Donald Trump met at the the Group of Seven summit in Canada last week. However, the two leaders failed to reach a deal and decided to continue the negotiations. Ishiba said that there were still issues on which the two sides had not yet agreed. Akazawa has said that no deadline would be set for the tariff negotiations, but that he keeps July 9 in mind as a key date. [Copyright The Jiji Press, Ltd.] Jiji Press
20-06-2025
- Politics
Ishiba Calls for Expanding Japan-South Korea Exchanges
News from Japan Politics Jun 20, 2025 12:30 (JST) Tokyo, June 20 (Jiji Press)--Japanese Prime Minister Shigeru Ishiba has called for expanding exchanges between his country and South Korea as this year marks the 60th anniversary of the normalization of diplomatic relations between the two neighboring countries. "We want to pass on the baton of exchanges we have nurtured to the next generation while further broadening the scope of Japan-South Korea cooperation," Ishiba said in a speech at a reception hosted by the South Korean Embassy in Tokyo on Thursday to commemorate the anniversary. Ishiba said that he had very good discussions with South Korean President Lee Jae-myung when they met in Canada on Tuesday on the sidelines of the Group of Seven summit. "As the strategic environment surrounding Japan and South Korea is becoming increasingly severe, let's take a new step toward a better future hand in hand," the prime minister stressed. Meanwhile, South Korean Ambassador to Japan Park Cheol-hee said that the bilateral relations have continuously deepened despite twists and turns in the past. [Copyright The Jiji Press, Ltd.] Jiji Press
Politico
19-06-2025
- Politics
- Politico
Trump to make a decision on Iran within two weeks
President Donald Trump has set a two week deadline to decide if the United States will strike Iran. 'Based on the fact that there is a substantial chance of negotiations that may or may not take place in the near future, I will make my decision of whether or not to go within the next two weeks,' White House Press Secretary Karoline Leavitt said Thursday, reading a statement from the president to reporters. Leavitt said Trump would prefer a diplomatic solution, but the president — in consultation with the National Security Council — is weighing U.S. military intervention to keep Iran from obtaining a nuclear weapon, according to a recent POLITICO report. The U.S. is the only country with the military capacity to destroy Iran's nuclear program. 'Iran has all that it needs to achieve a nuclear weapon,' Leavitt said. 'All they need is a decision from the supreme leader to do that, and it would take a couple of weeks to complete the production of that weapon, which would of course pose an existential threat not just to Israel, but to the United States and to the entire world.' The comments came at the end of a week of heightened tension in the decades-long conflict between Israel and Iran. As Iran and Israel lobbed rockets at each other, Trump left the Group of Seven conference early and has convened multiple meetings in the Situation Room. The conflict has divided Trump's coalition, driving a rift between an isolationist faction and hawks who have long sought to hobble Iran. Leavitt said Trump has long maintained his position that the U.S. should interfere to keep Iran from obtaining a nuclear weapon and quoted his comments on the subject from more than a decade ago. 'The president has made it clear he always wants to pursue diplomacy, but believe me, the president is unafraid to use strength as necessary,' Leavitt said. 'And Iran and the entire world should know that the United States military is the strongest and most lethal fighting force in the world, and we have capabilities that no other country on this planet possesses.' Leavitt declined to answer whether the president wanted regime change in Iran, which has been a goal of hawks like Sen. Lindsey Graham and a red line for MAGA isolationists.
