Financial Times Europe - 12 12 2020

2020·45.46 MB·English

Europe edition
EUROPEAN NEWSPAPER OF THE YEAR
SATURDAY 12 DECEMBER / SUNDAY 13 DECEMBER 2020
How To Best festive red wines
Jancis Robinson
LIFE & ARTS
Give It
A
Angelina Jolie on
PHILANTHROPY
rethinking ways
SPECIAL
of giving
SEPARATE MAGAZINE
‘The Cube has his own voice’
EU urges bloc unity on Brexit talks
Erno Rubik has Lunch
with the FT
LIFE & ARTS
3 Members told no side deals if negotiations fail 3 Time running out 3 Pound’s slide continues
Peter Foster — Brighton through this weekend. UK prime minis- lomats, met on Thursday to run through would replicate the benefits of EU mem-
Jim Brunsden — Brussels ter Boris Johnson warned yesterday that no-deal measures that Brussels had bership beyond what was contained in
Arthur Beesley — Dublin
it was “very, very likely” Britain would published the same day. According to the specific measures designed to keep
Brussels has told EU governments not to leave the single market without a trade the diplomatic note from the meeting, planes flying and trucks driving.
entertain the idea of side deals with Brit- deal. Ursula von der Leyen, European national governments were encouraged The decision not to include the so-
ain should trade talks fail, urging a firm Commission president, told EU leaders to be careful not to expand on unilateral called “fifth freedom” allowing intra-EU
line in order to force the UK back to the that there was a “higher probability” EU no-deal contingency measures pub- Ursula von der airfreight movements, and to deny
negotiation table “as soon as possible” that talks would fail than succeed. lished by the European Commission this Leyen said there “cabotage” rights that would allow Brit-
after January 1. Brussels and London are set to take a week. The measures cover temporary was a ‘higher ish trucks to make drop-offs around
Going for a song
According to a diplomatic note seen decision on the fate of the talks tomor- transport arrangements. probability’ that Europe were explicitly designed to keep
by the Financial Times, EU member row. Despite this, senior EU figures, A Brussels official told the diplomats talks would fail up the pressure, diplomats were told. Why musicians are selling rights
states were warned by Brussels not to do including the Irish and German foreign that an “incentive must be maintained” than succeed With a no-deal outcome looming, the
anything that would ease the conse- ministers, said that they still believed an for the UK to return to the negotiating pound slipped as much as 1.2 per cent LIFE & ARTS
quences of a “no-deal” end to the Brexit agreement was possible. table “as soon as possible” if the negotia- yesterday, before trimming its losses to
transition period on New Year’s Day. But with time running out, the EU’s tions do not lead to success this year. about 0.4 per cent to trade at $1.3241. It
The move comes as negotiators made Working Party on the trade negotia- National governments were told that has shed 1.5 per cent in the past week.
a last-ditch attempt to secure a break- tions, which is made up of national dip- it was important not to do anything that Lex page 20
Torrid times
Nations count
climate costs
Tech’s newest billionaire
Activists spell out “Fight for 1 point 5” in
candles in Berlin yesterday, in reference Airbnb founder Brian Chesky
to the Paris Climate Agreement’s bid to
keep the rise in global warming below COMPANIES
1.5 degrees Celsius. The event came
ahead of today’s fifth anniversary of the
Paris accord, which will be marked by a
virtual gathering of world leaders who
will chart the next steps.
The scale of changes needed to meet
climate goals require major investment.
The UK estimates its capital investment
will need to rise to around £50bn a year
by 2030 — up from £10bn a year today.
Editorial Comment page 8
Adair Turner page 9
Carbon prices hit record page 13

Sean Gallup/Getty
Chief of audit watchdog faces heat over
buying Wirecard shares during probe
the matter with the people involved,” he fraud at Wirecard. It had opened a pre-
Olaf Storbeck — Berlin
said yesterday. liminary probe into EY’s work at Wire-
Germany is to probe the head of the “This smacks of insider trading,” said card in October 2019, which became a
country’s audit watchdog after he Cansel Kiziltepe, the Social Democrat full investigation only in May 2020.
admitted to buying and selling shares MP who asked Mr Bose about his share In September, Apas filed a criminal
Collapse of Rome’s tourism in Wirecard while his own institution deals at the committee hearing. complaint against three EY partners
cuts Airbnb landlords adrift was investigating the fraudulent pay- Florian Toncar, an MP for the liberal who audited Wirecard, accusing them
ments company’s auditor. Free Democrats, called for Mr Bose’s of a potential violation of professional
Analysis i PAGE 3 resignation: “From my point of view, he duties and criminal acts.
Ralf Bose, a former senior partner at Big cannot remain in office.” Mr Bose told MPs he bought Wirecard
Four auditor KPMG and who has headed He added: “Every time you think it shares on April 28, the day that a devas-
Apas since 2016, told the parliamentary cannot get worse, Wirecard is proving tating KPMG report was published and
Austria €5.00 Morocco Dh55
Bahrain Din2.20 Netherlands €5.00 inquiry into the accounting scandal that the opposite.” sent Wirecard shares down 26 per cent.
Belgium €5.00 N Macedonia Den240
Bulgaria Lev8.75 Norway NKr49 he purchased Wirecard shares in April Mr Bose, who refused to disclose the Mr Bose sold the shares at a loss on May
Croatia Kn31 Oman OR2.20 and sold them — at a loss — the following size of his investment in Wirecard, 20, the same day that Apas and BaFin
Cyprus €4.50 Pakistan Rupee450
Czech Rep Kc140 Poland Zl 25 month. At that time, Apas was in confi- referred to Mr Altmaier’s statement and exchanged their views on the findings of
Denmark DKr50 Portugal €4.50
Egypt E£55 Qatar QR20 dential talks with Germany’s financial declined to comment further. BaFin, the KPMG report. The Apas head said he
Finland €5.90 Romania Ron19 regulator, BaFin, over Wirecard. which would be responsible for investi- sold his shares before the meeting.
France €5.00 Russia €5.00
Germany €5.00 Serbia RSD520 Calling the admission “disconcert- gating potential insider trading, said: Danyal Bayaz, an MP for the Greens,
Gibraltar £4.00 Slovak Rep €4.50
Greece €4.50 Slovenia €4.50 ing”, German economy minister Peter “We are of course looking at the matter.” accused Mr Bose of “showing an appall-
Hungary Ft1590 South Africa R130 Altmaier said that Mr Bose’s share deals Apas has been criticised for not acting ing ignorance with regard to an obvious
India Rup260 Spain €4.50
Italy €4.50 Sweden SKr55 would be investigated. “We will discuss earlier over allegations of accounting conflict of interest”.
Lithuania €5.00 Switzerland SFr7.50
Luxembourg €5.00 Tunisia Din9.00
Malta €4.50 Turkey TL25
UAE Dh25.00
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DECEMBER 12 2020 Section:FrontBack Time: 11/12/2020 - 18:59 User: nick.miller Page Name: 1FRONT USA, Part,Page,Edition: EUR, 1, 1
2 ★ FTWeekend 12 December/13 December 2020
INTERNATIONAL
Commercial banks
ECB prunes extension of cheap loans
WORLD|
WEEK IN REVIEW|
Governing council split ble loan book, or €2.9tn, under the ing dividends after a nine-month hiatus ‘There Thursday, the lowest rate was extended
scheme known as targeted longer-term to preserve capital since the pandemic from next June until mid-2022.
leads to halving of were good
refinancing operations (TLTRO). started. Christine Lagarde, ECB president,
potential rise in funds The ECB initially proposed to raise The Bank of England announced on arguments said on Thursday that the period during
US sanctions imposed on 14 senior
this limit to 60 per cent in plans pre- Thursday that UK banks could resume which banks needed to maintain their
made that
Chinese officials for Hong Kong law sented to its governing council. But after dividend payments, within limits, next overall lending was being extended to
Martin Arnold — Frankfurt
some council members objected, it was year. But the ECB supervisory board is we didn’t the end of next year to make it “a little
The US has imposed sanctions on 14 high-level The European Central Bank scaled back cut to 55 per cent, halving the potential “split” according to the two people, who bit more challenging” to qualify for the
need to
Chinese officials over allegations they have under- the amount of ultra-cheap loans it will increase in the scheme to €300bn, said it was likely to allow only the “very attractive rate” of minus 1 per
mined democracy in Hong Kong. offer to commercial banks after some of according to two people involved in the strongest banks to restart. be too cent. She said the scheme was “clearly
Officials targeted for sanctions are all high-ranking its governing council members criti- discussions. The latest round of the ECB’s three- working to the effect that we wanted”
generous to
members of the National People’s Congress Standing cised an initial plan for being too “There were good arguments made year TLTRO loans was launched earlier after take-up by banks exceeded expec-
Committee, the body that oversees the national legis- generous. that we didn’t need to be too generous to this year, when the ECB became the first the banks’ tations, their lending volumes rose and
lature and was responsible for adopting and imple- Among the measures the ECB the banks,” said one of the people. central bank to offer financing at a level borrowing rates fell for businesses and
menting the national security law that paved the way unveiled on Thursday to support the Another said: “There was some push- below its deposit rate in an effort to households.
for a crackdown in Hong Kong over the summer. pandemic-stricken economy was the back on the refinancing for banks, so it avoid the pandemic triggering a credit The ECB also promised on Thursday
Authorities in the territory have stepped up their extension of its scheme for financing was made smaller for the sake of com- crunch. to buy €500bn more bonds over a
crackdown on opposition political figures and sup- banks at deeply negative rates — in promise.” Banks have already borrowed more longer period and provide extra cheap
porters of the 2019 anti-government protests since effect paying them to borrow money — The scaling back of the ECB’s support than €1.75tn under the scheme, which funding for banks. The lender increased
Beijing introduced the security law in the city in June, as long as they do not reduce lending. comes as its supervisory board prepares offers them financing at minus 1 per the size of its pandemic emergency pur-
targeting terrorism, subversion, collusion and Until Thursday’s change, banks had to meet next week to discuss whether to cent on condition that they do not cut chase programme from €1.35tn to
foreign interference. been able to borrow up to half their eligi- lift its blanket opposition to banks pay- their lending from the previous year. On €1.85tn.
China curtails overseas lending
Europe. Pandemic
in face of geopolitical backlash
China has drastically cut the overseas lending pro- Recovery deal transforms EU crisis policy
gramme of its two largest policy banks, after a decade
of growth that had seen Beijing competing with the
World Bank in lending to developing nations.
Lending by the China Development Bank and the
Export-Import Bank of China collapsed from a peak
of $75bn in 2016 to $4bn last year, according to data Historic €750bn package
from Boston University seen by the Financial Times.
The retrenchment comes as Beijing rethinks its built on unprecedented
Belt and Road Initiative that finances and builds
levels of debt issuance
infrastructure in developing countries. The BRI has
attracted growing criticism for weaknesses including
lending to low-income countries with shaky finances
Sam Fleming and Michael Peel
and a lack of transparency or social and environmen- Brussels
tal impact studies. The landmark recovery plan agreed by
EU leaders this week has the potential to
permanently change the way the bloc
handles crises.
Lebanon’s prime minister charged At a two-day summit that ended yes-
over deadly Beirut port explosion terday in Brussels, leaders unlocked a
€1.8tn budgetary package built in part
on unprecedented levels of European
Commission debt issuance.
The core innovation is the €750bn
pandemic recovery fund, which was
first sketched out in July and will allow
transfers to stricken member states
starting next year. The compromise also
paved the way for a separate agreement
on ambitious new climate change objec-
tives and settled the EU’s next seven-
year budget.
Angela Merkel, who holds the EU’s
rotating presidency and brokered the
deal that overcame a blockade by
Poland and Hungary, was relieved. “It is
a huge weight off my mind,” the German
The judge leading a probe into the Beirut port blast, chancellor told reporters.
above, has charged the prime minister and three ex- Her French counterpart, President In step: and Bulgaria, according to the European outs to countries breaching the rule of gets for a 55 per cent reduction in emis-
ministers with criminal negligence causing hundreds of Emmanuel Macron, expressed satisfac- European Central Bank. Greece stands to receive a law. In both cases, solutions were found. sions by 2030, disagreements between
deaths. Hassan Diab is set to be questioned next week. tion: “This summit was a test for Europe Council 9 per cent net benefit, while Portugal On Thursday, Poland and Hungary member states on how to reach those
and we have passed that test.” president will get 5.4 per cent and Spain 3.4 per were won over with a non-binding dec- goals remain.
The recovery fund, which needs to be Charles Michel cent. laration designed to assure them they The range of views was highlighted by
ratified by national parliaments, is with European Guntram Wolff of the Bruegel think- would not be singled out under the new the varied environmental priorities the
Macron unveils draft legislation explicitly designed to be a temporary Commission tank said the flow of funding would pro- rules. The declaration also stipulates 27-member EU has vowed to address —
targeting Islamist ‘separatism’ feature of the EU’s crisis recovery head Ursula vide significant “fiscal space” to weaker that member states can challenge its from spruce bark beetles ravaging trees
toolkit. As such, it does not offer a last- von der Leyen, economies to support the recovery in legality at the European Court of Justice in the Czech Republic to Maltese con-
ing response to those who worry about centre, and coming years. “The transfer element before it is used. cerns about the needs of island states.
President Emmanuel Macron unveiled a draft law to the absence of fiscal firepower at supra- German from stronger to weaker countries is Diplomats insisted the substance of The difficulty handling the Hungar-
curb Islamist “separatism” on French soil. The legis- national level to withstand future eco- chancellor important,” he said. the rule-of-law legislation remained ian and Polish objections to the rule of
lation, which contains measures ranging from a ban nomic crises. Angela Merkel As often observed in the history of the unchanged. Nevertheless, they law mechanism underscores the need to
on “virginity certificates” for Muslim women to lim- But analysts see the accord as a funda- in Brussels EU, a crisis — the devastating economic acknowledged that the complex politi- develop permanent crisis-fighting tools
its on home schooling, follows two Islamist terror mental shift. “Even if the debt instru- yesterday fallout of the pandemic — helped build cal wrangling involved in securing both that cannot be so easily held up by a
attacks in October, in which four were killed. ment is not permanent, it will perma- Mario Salerno/DPA consensus and overcome deep divisions the recovery fund and climate deals small number of veto-wielding member
Although the words “Islamist” or “separatist” are nently alter the way we think about the among member states. Before the sum- exposed rifts in the union. states, according to Mr Guttenberg.
not used, ministers said the aim was to rein in Islam- instruments that Europe has at its dis- mer the Netherlands, Denmark, Swe- The stand-off on the rule of law in “We cannot build instruments that
ists whom they accuse of imposing puritanical, sexist posal in a crisis,” said Lucas Guttenberg den and Austria — the so-called frugal countries that have drifted, or are drift- are new in each crisis,” he said, because
and sometimes violent anti-republican views on of the Jacques Delors Institut in Berlin. countries — were opposed to the idea of ing, into authoritarianism also high- that implies having to secure the agree-
French communities. The country is home to about “It shows what is possible.” the commission raising debt to fund lights an enduring resistance to Brus- ment of all 27 countries — or all 19 in the
5.7m Muslims, the largest such minority in western The centrepiece of the recovery fund grants to member states. sels’ attempts to monitor how they case of eurozone initiatives. The summit
Europe. Premier Jean Castex said the bill targeted — €390bn of grants handed out by Brus- More recently, the EU grappled with spend EU money — an issue that will deal, he said, was a massive step but
“the pernicious ideology” of “radical Islamism”. sels to member states — will deliver a an eleventh-hour threat to the whole probably hang over the recovery fund added: “It’s just not the end of the road.”
net benefit worth more than 10 per cent budget package because Warsaw and spending in coming years. Similarly, Additional reporting by Guy Chazan in
of pre-crisis economic output in Croatia Budapest objected to plans to curb pay- while the summit settled on climate tar- Berlin and Victor Mallet in Paris
Inoculation
MAKE A SMART INVESTMENT
France faces challenge to counter widespread vaccine distrust
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Leila Abboud — PARIS French people disagreed that vaccines The home country of famed micro- the vaccine, and when the flu strain
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Sweden: Responsible Publisher - Christer Norlander
Published by: The Financial Times Limited, against Covid-19. “France has really mRNA-based shot safe and effective. It led France in 2018 to expand the list of
BTeral:c +k4e4n H20o u7s8e7,3 1 3F0ri0d0a;y F Satxr:e +e4t,4 L 2o0n d7o4n0 7E C5470M0 9.BT. ©Re Cporopdyuricgthiotn T ohfe t Fhien aconncitaeln Ttsim oef st h2i0s 2n0e.wspaper in any been rocked by this issue of vaccine hes- Alain Fischer, the government’s top required children’s vaccines from three
Editor: Roula Khalaf. manner is not permitted without the publisher’s prior itancy for the last 10 years,” said Jeremy vaccine adviser, called for time to allow to 11, making them obligatory for those
consent. ‘Financial Times’ and ‘FT’ are registered trade
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Germany, An der Brucke 20-22, 64546 Morfelden- CNRS. “In the public health community, complete their assessment: “The data is This time, however, the government
Walldorf, [phone]. Responsible Editor, Roula The Financial Times and its journalism are subject to a
Khalaf. Responsible for advertising content, Jon Slade. self-regulation regime under the FT Editorial Code of we’ve been wringing our hands for not yet complete either to know if they will not make the Covid-19 vaccine
Italy: Monza Stampa S.r.l., Via Michelangelo Buonarroti, Practice: www.ft.com/editorialcode months about how to handle this.” protect against transmitting the virus.” mandatory. It will count on family doc-
153, Monza, 20900, Milan. Tel. [phone]
Owner, The Financial Times Limited; Rappresentante e Reprints are available of any FT article with your The French are “the most sceptical Dr Fischer also pledged to convene a tors to encourage patients to take it, as
DViiare Gtt.o Prue eRcehsepr,o 2n s2a0b0il3e7 i nP aItdaeliran: oI. MD.uDg.Snraln-Mo a(MrcoI) ,P Itraolvya. si - c(mominpimanuym l oogrdoe orr 1 c0o0n tcaocpti edse)t.ails inserted if required people in the world about the safety of wide group of stakeholders to come up well as administer it. “It cannot be an
Milano n. 296 del 08/05/08 - Poste Italiane SpA-Sped. in One-off copyright licences for reproduction of FT articles vaccines”, according to a 2018 Gallup- with a Covid-19 rollout plan. A separate order from the top coming from the
Abb.Post.DL. 353/2003 (conv. L. 27/02/2004-n.46) art. 1 are also available.
.comma 1, DCB Milano. For both services phone [phone], or email Wellcome Trust study of 140,000 peo- committee of 30 citizens chosen at ran- Anti-vaccine protesters take to state,” Dr Fischer said.
Spain: Bermont Impresion, Avenida de Alemania 12, CTC, [email protected] ple in 140 countries. One in three dom will represent the public. the streets of Paris last weekend Additional reporting by Domitille Alain

DECEMBER 12 2020 Section:World Time: 11/12/2020 - 18:49 User: john.conlon Page Name: WORLD1 USA, Part,Page,Edition: EUR, 2, 1
12 December/13 December 2020 ★ FTWeekend 3
INTERNATIONAL
Italy. Covid-19 National security
China officials
Pandemic bursts Rome’s rental bubble
detain worker
at Bloomberg
News bureau
Collapse in tourism has left
amateur landlords using
Airbnb nursing big losses
Yuan Yang — Beijing
Miles Johnson and Davide Ghiglione China’s security services have detained
Rome an employee at Bloomberg News’
Beijing bureau on suspicion of endan-
When Tommaso Pediconi turned his
gering national security.
family house in the old Jewish ghetto
area of Rome, one of the most beautiful Bloomberg News announced yesterday
neighbourhoods in the city, into an Air- that Haze Fan, a Chinese citizen, had
bnb rental more than 10 years ago he been detained on Monday after being
was one of the few in the area to run such taken from her apartment by plain-
a business. clothes security officials.
Given the large number of tourists The media group said Bloomberg LP,
that poured into the Italian capital and its parent company, had “on Thursday
the boom in the Airbnb model, it soon received confirmation that Fan is being
became his only source of income. Busi- held on suspicion of participating
ness was going so well that he decided to in activities endangering national
rent two other apartments in central security”.
Rome and put them on the platform. Over the past year, China’s govern-
Today, Mr Pediconi, 34, has no clients ment has grown significantly more hos-
left. “I had reservations until October tile to overseas media in the country,
but they were all cancelled, I had to pay expelling a record 17 foreign journalists.
back a lot of money,” he said. At least another 12 foreign journalists
The collapse in tourists visiting Rome have received visas with truncated
during the Covid-19 pandemic has burst terms, sometimes for just one month,
the city’s Airbnb short-term rental bub- according to the Foreign Correspond-
ble, forcing some indebted landlords ents’ Club of China.
into fire sales of their apartments to The police and security services have
avoid defaulting on their mortgages. increased their harassment and surveil-
In recent years, vast numbers of Tourism blow: invest in even more properties, some am now waiting and hoping for a swift ing in short-term lets in the capital. lance of international journalists who
apartments in central areas close to the Spanish have bought five or even 10 of these. recovery but I am sure many who Virginia Raggi, Rome’s mayor, said are foreign passport holders, as well as
monuments such as the Colosseum and Steps in central There was always the risk that too many started doing this as a job will perish,” he the nightly €3.50 charge for Airbnb colleagues who are Chinese nationals.
Trevi fountain have been repurposed Rome are much people would jump on the Airbnb band- said. “At the moment I’m trying to rent guests, paid directly to the municipality, Chinese nationals working for foreign
for short-term letting by amateur land- quieter than wagon at the same time.” the house to residents, but I haven't would help “re-establish fair competi- media do not sign contracts with their
lords seeking to profit from the Eternal normal during Rome was the sixth most popular city been able to do it yet, although I have tion between [hotel] operators, fight the media organisations but with a depart-
City’s estimated 15m visitors a year. the virus crisis in the world for total nights booked on lowered the prices by 75 per cent.” black economy and track tourist flows”. ment of the foreign affairs ministry and
Now estate agents say that the col- Filippo Monteforte/AFP/Getty Airbnb in 2018, according to the com- Donato Cristiano, an estate agent in Estate agents said that as a result of are forbidden by law from performing
lapse in visitors has overstretched land- pany, behind only London and Paris in Rome, said two-bedroom flats in the the collapse in short-term rentals, many full journalistic duties.
lords, who speculated on Rome’s tour- Europe. This demand provided a rare historic centre that rented for €1,300 a landlords had tried to repurpose their Chinese authorities detained Austral-
ism boom at a time when the wider Ital- bright spot in a local economy that has month before the pandemic were now ‘There was properties into longer-term rentals, ian journalist Cheng Lei in August on
ian economy was stagnant. fallen far behind Milan, Italy’s financial on offer at €900, including utilities. “We instead of selling. But supply vastly out- national security grounds. Ms Cheng
always the
Many are scrambling to convert prop- capital, over the past decade. are talking about flats that a few years strips demand. had worked for state media outlet China
erties into long-term rentals or sell them Today, conditions have changed dras- ago you could easily rent for €2,000 a risk that “At the moment, the problem is that Global Television Network as a TV
to pay off debts, and estate agents say tically. Mr Pediconi said he used to rent month as a holiday rental,” he said. there are too many properties for rent anchor.
too many
sales prices are down by about a third. his house out for €120 a night. Now it is A new tax has added to the pressure and not enough people, due to the lack Two Australian journalists fled China
“There are forced sellers now, and on offer for between €40-€50. on landlords. The boom in Airbnb rent- would jump of tourism and prolonged remote work- in September, following an extraordi-
that is a sad and inevitable consequence All bookings were cancelled and reim- als in Rome resulted in the online let- ing,” said Carlotta Marchionne, an nary diplomatic stand-off.
on the
of the collapse in tourism,” said Bill bursed because of the pandemic, and he tings platform falling under greater estate agent in the centre of Rome. Bloomberg said it had sought infor-
Thomson, chairman of Italy for estate had to cancel the rental contract for the scrutiny from the heavily indebted local Airbnb “The phone is no longer ringing. Our mation on Ms Fan’s whereabouts from
agents Knight Frank. “Many people in two houses he was managing. government. In June, it announced a office has never been so quiet.” the Chinese government.
bandwagon’
places like Rome used their profits to “I never thought this could happen. I new “tourism tax” levied on guests stay- See Companies See FT Big Read
DECEMBER 12 2020 Section:World Time: 11/12/2020 - 18:48 User: john.conlon Page Name: WORLD2 USA, Part,Page,Edition: EUR, 3, 1
4 ★ FTWeekend 12 December/13 December 2020
INTERNATIONAL
Turkey Economic crisis
Erdogan hits back at US sanctions threat Struggling
Cuba plans
‘big bang’
Punishment for Russian people familiar with the matter. ures — and their fallout — would hinge Mediterranean dispute over natural gas. have triggered sanctions under the
defence deal would be Responding to news of the impending on the details of the package unveiled by The measures are likely to be relatively Countering America’s Adversaries currency
measures while returning from a trip to Washington. light, prompting Mr Erdogan yesterday through Sanctions Act, which aims to
‘discourtesy’ to Nato ally Azerbaijan, the Turkish president said The Turkish lira, which has lost about to proclaim that “countries with com- penalise nations that engage in “signifi-
devaluation
imposing sanctions would be an act of 25 per cent of its value this year, mon sense” had prevailed. cant transactions” with the Russian
discourtesy towards “a very important dropped further yesterday. The dollar The Turkish president has in recent defence industry or intelligence sector.
Katrina Manson — Washington
Nato partner”. rose as much as 1.8 per cent against the years intensified his drive to pursue an But Mr Trump, who boasts of his per-
Laura Pitel — Ankara
“We are an ally of the US and the EU,” currency, briefly crossing the symbolic independent foreign policy uncon- sonal rapport with Mr Erdogan, has
Turkey’s Recep Tayyip Erdogan has he said, according to Turkey’s pro-gov- TL8 threshold. strained by the demands of the US or shielded Turkey from the requirement. Marc Frank — Havana
attacked US plans to impose sanctions ernment Hurriyet newspaper. “What Even if the sanctions are narrowly Europe. But his close co-operation with The person familiar with the plans
Cuba is embarking on the biggest
on his nation for buying a Russian S-400 lies beneath this language of threats?” targeted, they will underline the Russia and military interventions in said the Trump administration wanted
devaluation of the peso since the 1959
missile defence system as a show of “dis- One person familiar with the US plans increasing tensions between Turkey, a Syria, Libya and the Caucasus — com- to “pre-empt” measures contained in
revolution and the elimination of a
respect” to a Nato member state. said the sanctions were being crafted to longstanding Nato member, and bined with concerns about a crackdown the defense appropriations bill, which is
dual currency system as the Commu-
In a sign of the strained relationship be “as mild as possible” to neutralise western countries. on domestic opponents — have fuelled expected to be passed by Congress in
nist government struggles with its
between Ankara and its western allies, anger towards Mr Erdogan in Congress Late on Thursday, EU leaders agreed mounting alarm in Washington and in coming days. The bill would require
worst economic crisis since the col-
the administration of Donald Trump is while avoiding serious damage to the to draw up further sanctions against European capitals. sanctions on Turkey to be imposed
lapse of the Soviet Union.
set to imminently press punitive meas- US-Turkey military relationship. Ankara over what they termed its “uni- Turkey’s 2017 deal with Moscow to within 30 days as punishment for buy-
ures on the country, according to two Analysts said the impact of the meas- lateral actions and provocations” in a buy the S-400 missile system should ing the missile system. The peso, which has been artificially set
at parity with the US dollar for decades,
will be valued at 24 pesos to the dollar
from January 1, Cuban president Miguel
Confectionery. Ivory Coast/Ghana Díaz-Canel has announced.
This is similar to the level at which cit-
izens were able to exchange a second
Chocolate fight leaves bitter taste in west Africa
currency, the convertible peso. That
currency will now be eliminated.
Mr Díaz-Canel, flanked by Commu-
nist party leader Raúl Castro during a
brief televised appearance, cautioned
cash to produce more, weighing on mar- that the measure was not a magic bullet
Cocoa price rise to help ease
ket prices. This year, an election year in that would solve the country’s economic
farmer poverty has met with both countries, governments jointly problems, but would help pave the way.
raised the price by about 20 per cent to “This will put the country in a better
pushback from industry $2,600 a tonne, still $500 less than the position to carry out the transforma-
Cocoa Barometer estimates farmers tions demanded by the updating of our
need to earn a living wage. economic and social model,” he said.
Neil Munshi — Lagos Global cocoa output has grown 18 per Cuba’s government is anxious the
Emiko Terazono — London
cent over the past five years to 4.7m devaluation should not fuel unrest, par-
The 100,000 cocoa farmers Frank tonnes, with top producer Ivory Coast ticularly given recent expressions of dis-
Okyere represents as head of Ghana’s producing 2.1m tonnes in the last crop sent by artists demanding greater
Kuapa Kokoo co-operative eke out mea- year, up almost a third, according to the freedoms. It plans to raise state wages
gre lives despite producing the raw International Cocoa Organisation of and pensions fivefold to compensate for
material for a global chocolate industry producing and consuming countries. the inflation likely to be generated by
worth an annual $100bn in retail sales. Ghana produced 800,000 tonnes, an the devaluation.
The world’s two largest cocoa produc- increase of 3 per cent. However, the 40 per cent of the labour
ing countries, Ivory Coast and Ghana, “If you want [world] prices to rise, force that works in the private and
have added a supplement to the sale you do not produce considerably more informal sectors, or those living off the
price in an effort to alleviate poverty. than the market needs,” said Derek land, will have to deal with the salary hit
But a dispute over whether global Chambers, former head of cocoa at on their own.
buyers were prepared to pay illustrates French trader Sucden. “They are going with a ‘big bang’
how hard it will be for the two nations to There is now rising concern that Ivory exchange rate adjustment, although
control and lift prices in an industry Coast and Ghana will be left holding they will try to regulate the impacts with
dominated by millions of smallholders. unsold cocoa in a year when the harvest administrative measures and repress-
“We are not asking too much from is expected to be at record levels, ana- ing inflation,” said Pavel Vidal, a former
industry, just meet our cost of produc- lysts say. As a result of lower global Cuban central bank economist who
tion and help us get something small to demand and the LID, sales agreements teaches at Colombia’s Universidad Jave-
Ivory Coast and Ghana lead global cocoa production
live,” said Mr Okyere. “I don’t think it’s in the two countries for this crop year riana Cali. “There is no complete unifi-
too much to ask, because once they do 2019-20 crop year (percentage share of 4.7m tonnes) and next are far below normal, said cation of currencies, because the econ-
that they can still make big profits.” Jonathan Parkman at commodity bro- omy is dollarising, but they are going to
The disagreement centred on a $400- Ivory Coast 45 Ghana 17 Cameroon 6 Indonesia Peru 3 kers Marex Spectron. advance a great deal in the unification of
a-tonne “living income differential” 4 Deals covering about 70 per cent to 80 exchange rates.”
(LID) added to the price of cocoa har- per cent of their crop for the current The devastating effect of coronavirus
vested from this crop year, bought from year and about 5 per cent for the follow- on tourism, a fall in foreign earnings
Ivory Coast and Ghana, which account ing year compared with normal years, from the export of medical services and
for 60 per cent of global production. Nigeria 5 where both would have sales agree- tougher US sanctions have created the
Others 9
In the past few years they have collab- ments for all their current year cocoa worst cash crunch in Cuba since the
orated to try to raise the share farmers and about 20 per cent to 25 per cent for early 1990s.
earn — just 6.6 per cent of the sale price the following year’s harvest, he said. In 2019 the government began open-
of a bar of the confectionery, according Ecuador 7 Brazil 4 Mr Parkman said there was frustra- ing hard currency shops to capture
to the Cocoa Barometer, published by tion among buyers over a lack of trans- tradeable currency in the retail sector,
Voice Network, an umbrella group for 17 parency and accountability around the arguing it had no money to import
non-government organisations. LID operation. “The LID is going to have many goods and then sell them in pesos.
Source: ICCO
In letters circulated in the industry, to be reformed. It’s not sustainable as it As part of the new reforms, Havana
the Ivorian Conseil du Café-Cacao and is over time,” he added. has unveiled cuts in subsidies to state
the Ghana Cocoa Board this month Women sort nesses are keen to support amid cent of a commodity have no real power ‘Why do Antonie Fountain of the Voice Net- companies. They will be hit by the
accused the chocolate producers of try- cocoa beans increasing global focus on sustainability in setting its price?” work said some of the confectionery scrapping of the convertible peso,
countries
ing to avoid the LID after US group Her- in Abidjan, and issues such as deforestation and But ultimately, said a Ghanaian offi- groups were putting profits ahead of because they were permitted to use it at
shey took the rare step of sourcing cocoa Ivory Coast. child labour. While the chocolate pro- cial speaking on condition of anonym- who farmers’ wellbeing. preferential exchange rates, flattering
beans from the futures market in New Farmers want a ducer’s commitments to pay the LID ity, “your negotiating position is not that But brokers and analysts said efforts their accounts.
produce 60
York. Analysts said this meant it did not bigger share of ended the dispute, it demonstrated the strong, so you’re entirely dependent on by Ivory Coast and Ghana to collaborate Neither the peso nor the convertible
have to pay the supplement, although the $100bn limited leverage held by producers. public sentiment, environmental sus- per cent of a and control prices would struggle, peso currency are tradable outside
Hershey said it was supportive of chocolate Ivory Coast and Ghana sought to pun- tainability concerns, child labour con- partly because of smallholders’ desire Cuba, and economists have long argued
commodity
improving farmers’ livelihoods. Buyers industry ish Hershey by suspending programmes cerns, income inequality concerns, to for cash and rival producers’ ability to the dual currency system is so unwieldy
normally purchase the commodity Sia Kambou/AFP/Getty despite their benefits for farmers, said make the other party feel a little guilty have no real expand market share. that it stymies the country’s exports,
from traders that source directly from Kobi Annan, Accra-based consultant at so they contribute more”. “It’s a very difficult situation,” said encourages imports and makes it diffi-
power in
Ghana and Ivory Coast. Songhai Advisory, a business intelli- Part of the problem is that rising Bright Simons, a researcher at Ghanian cult to analyse corporate profits.
Authorities in both nations gence firm. By cancelling the initiatives, farmgate prices — set by the govern- setting its think-tank Imani. The government says it will accept
responded by banning the company they wanted to hold more cards “when ment — and an increase in sustainability “Ultimately cartels struggle in com- convertible pesos at the 24-to-one rate
price?’
from operating sustainability pro- we sit down and solve this big problem: programmes have encouraged millions modities. That’s the lesson of the last for six months and convert bank
grammes on their soil — initiatives busi- why do countries who produce 60 per of small farmers who are desperate for couple of decades.” accounts priced in convertible pesos.
Independence struggle
Western Sahara conflict set to worsen after US-Morocco-Israel pact, diplomats fear
Heba Saleh — Cairo normalisation of relations with Israel — current bout of violence much harder,” drawn in mercenaries and foreign pow- ceasefire and to the political process.” Moroccan officials have been saying
risks aggravating fighting between the said Riccardo Fabiani, north Africa ers, and Mali has been fighting a jihadi About 600,000 people live in Western for years that the referendum plan is
A forgotten conflict on the fringes of
Polisario Front, which wants independ- director at International Crisis Group, a insurgency in the Sahara, diplomats say. Sahara, a desert roughly the size of the obsolete and in 2007 offered autonomy
the Sahara desert is heating up — and
ence for the region, and Moroccan conflict resolution think-tank. “This “For now, this is a low-intensity con- UK. When Spain, the former colonial under Moroccan sovereignty, an option
Donald Trump’s decision to recognise
troops manning a 2,700km-long forti- will also make Sahrawi youths more flict but it could escalate,” said a western power, withdrew from the territory in dismissed by Polisario. The kingdom
Morocco’s sovereignty over disputed
fied sand wall that divides the desert angry, mobilised and committed to diplomat. “Algeria could at some point 1975, Morocco took it over. has been supported by powerful allies
Western Sahara is set to make it worse.
land, diplomats and analysts say. resolving the conflict through force.” join the battle to support Polisario. We Polisario engaged in a 16-year war such as France, and an increasing
The US recognition of Morocco’s claim “I think we can safely say that this Fighting resumed last month after the are talking here about the risk of a with the kingdom that ended with a number of countries have recognised its
to the territory — in return for Morocco’s move makes the resolution of the end of a 30-year ceasefire. Polisario said regional conflict.” ceasefire and plan for a referendum on sovereignty over the territory by open-
it was returning to war because Morocco For its part, Rabat, which has received independence. That process has been ing consulates in Moroccan-adminis-
had breached a 1991 ceasefire agree- an enormous boost from the US stalled for decades because the two sides tered Western Sahara, most recently
ment by sending forces into a demilita- endorsement, denies there has been any have failed to agree on who is eligible to Jordan and the United Arab Emirates.
Contracts & Tenders
rised buffer strip. The purpose of the fighting at all. vote. Mr Fabiani pointed out that language
Morocco incursion was to clear Sahrawi “These reports are unfounded,” a The kingdom controls more than two- used in recent UN Security Council reso-
protesters blocking a key highway for Moroccan diplomat told the Financial thirds of Western Sahara and all its main lutions spoke of “a pragmatic and realis-
trade to sub-Saharan Africa. Times. “Morocco is attached to the urban centres, with the Polisario Front tic resolution to the conflict — a coded
“We are now in a state of open war,” controlling the mainly uninhabited way of supporting Morocco’s plan”. He
said Sidi Omar, Polisario’s representa- fringes near the borders with Algeria said Polisario had realised the peace
tive at the UN. “We are firing at static and Mauritania. process did not exist any more and
Moroccan targets along the wall. Our Morocco mines phosphate in the ter- international attention was dwindling.
main objective is still the liberation of ritory and has poured billions of Blocking the road to Mauritania, he
Western Sahara. We did not want this dirhams into housing and infrastruc- noted, deprived the kingdom of its only
war but Morocco has been emboldened ture. About 180,000 Sahrawi refugees land link to African markets that have
by the inaction of the international com- live on international aid in bleak camps been the target of its economic expan-
munity.” in south-western Algeria, where Polisa- sion in recent years.
The hostilities could spiral out of con- rio set up the government in exile of its “The road through the buffer strip
trol, leading to a full-blown war that self-proclaimed Sahrawi Arab Demo- was never part of the ceasefire agree-
might even draw in neighbouring Alge- cratic Republic. ment and Polisario is angry that the
ria, the main sponsor of Polisario. Analysts and diplomats attribute the Security Council says it needs to be pro-
This would deepen instability in an return to fighting to Polisario’s frustra- tected,” said Mr Fabiani. “They see it as
already troubled region, where Libya is Tense region: a vehicle passes a tion with the absence of a political solu- a fait accompli that was allowed without
embroiled in a civil conflict that has Moroccan outpost in Western Sahara tion on the horizon. negotiation.”
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FT BIG READ. CHINA AND THE WORLD
The massive lending by Chinese financial institutions that supports the Belt and Road Initiative has
fallen off a cliff. At the same time, Beijing finds itself mired in debt renegotiations with a host of countries.
By James Kynge and Jonathan Wheatley
I t has not taken long for the wheels Photographs from the 2017 Belt and
to come off the Belt and Road Initia- Road Forum for International Co-oper-
tive. As recently as May 2017, ation — the venue at which Mr Xi
China’s leader Xi Jinping stood in declared his “project of the century”
Beijing before a hall of nearly 30 ambition — hint at what would become
heads of state and delegates from over the programme’s fatal flaw.
Rethinking
130 countries and proclaimed “a project Alongside Mr Xi in successive por-
of the century”. traits were the authoritarian leaders of
This was not hyperbole. China has countries with big debts and “junk”
promised to spend about $1tn on build- credit ratings, such as Alexander
ing infrastructure in mainly developing Lukashenko of Belarus, Hun Sen of
countries around the world — and Xi’s ‘project of Cambodia, Uhuru Kenyatta of Kenya,
finance almost all of this through its own Aleksandar Vucic of Serbia and several
financial institutions. Adjusted for infla- others.
tion, this total was roughly seven times Debt sustainability — or the ability of
what the US spent through the Marshall debtor countries to repay their loans —
Plan to rebuild Europe after the second had to be part of any reassessment of the
the century’
world war, according to Jonathan Hill- Belt and Road Initiative, says Kevin Gal-
man, author of The Emperor’s New Road. lagher, director of the Boston University
But according to data published this Global Development Policy Center,
week, reality is deviating sharply from which compiled the data on Chinese
Mr Xi’s script. What was conceived as overseas lending
the world’s biggest development pro- “This has to be the time for a rethink,”
gramme is unravelling into what could he says. “It’s been such a priority for Xi
become China’s first overseas debt cri- Jinping, he’s invested so much in it that
sis. Lending by the Chinese financial he’s not going to just turn the lights off.
institutions that drive the Belt and But they need to seriously implement
Road, along with bilateral support to their own debt sustainability analysis
governments, has fallen off a cliff, and and their own social and environmental
Beijing finds itself mired in debt renego- impact tools.”
tiations with many countries. The propensity for China’s credit-
“This is all part of China’s education as fuelled engagement of diplomatic allies
a rising power,” says Mr Hillman, a sen- to come unstuck is most spectacularly
ior fellow at Washington-based think- portrayed by Venezuela. Between 2007
tank CSIS. “It has taken a flawed model and 2013, the China Development Bank
that appeared to work at home, building lent Venezuela nearly $40bn, cement-
large infrastructure projects, and ing a relationship that Hugo Chávez, the
hubristically tried to apply that abroad.” former president of Venezuela, charac-
“Historically, most infrastructure terised as “a Great Wall” against US
booms have gone bust,” he adds. hegemonism.
“Whether China can avert that fate may
depend on its ability to renegotiate
loans with countries now in urgent need $4 12
bn
of debt relief. If China is unable or
Lending by CDB Countries in talks
unwilling to provide sufficient relief to
and ExIm Bank in over $28bn of debt
its borrowers, it could find itself at the
2020, a big fall from with Beijing, as of
centre of a debt crisis in developing mar- $75bn in 2016 end-September
kets.”
The data that describes China’s pre- Much of the lending to Venezuela was
tied to oil resources, but even before Mr
Chávez died in 2013 it was clear that
China’s pullback will things were going awry. Yet Beijing was
worsen a funding
in so deep that it felt compelled to keep
gap in infrastructure
supporting Nicolás Maduro, successor
that is already put
to Mr Chavez, even after evidence of his
at $907bn a year in
Asia alone ineffectual economic management
became clear.
dicament comes from researchers at Above: Xi infrastructure funding gap that in Asia the Center for China and Globalisation, fundamental rethink of growth drivers ‘If China is It lent another $20bn between 2013
Boston University who maintain an Jinping leaves alone already amounts to $907bn a year, a think-tank. by Beijing’s top economic planners,” unable or and 2017 and is now picking through the
independent database on China’s over- the stage after according to Asian Development Bank Chen Zhiwu, a professor of finance at says Ms Yu. “Naturally, if state-owned country’s pile of $150bn in defaulted
unwilling to
seas development finance. They found the 2017 Belt estimates. In Africa and Latin America Hong Kong university, says the enterprises decide to switch back to the debt, pushing its claims against rival
that lending by the China Development and Road — where Chinese credit has also formed retrenchment in Chinese banks’ over- domestic market in order to follow the provide creditors. The whole episode carries
Bank and the Export-Import Bank of conference. a big part of infrastructure financing — seas lending is part of a bigger picture of leadership’s wishes, the budgeted finan- crucial lessons for Beijing, says Matt
sufficient
China collapsed from a peak of $75bn in Below: former the gap between what is required and China cutting back on outbound invest- cial resource for overseas investments Ferchen at Merics, a Berlin-based think-
2016 to just $4bn last year. Venezuelan oil what is available is also expected to ments and focusing more resources will reduce accordingly.” relief to its tank. “Chinese foreign policy and policy
The context around this is crucial. workers yawn wider. domestically. It is also a response to ten- All this is leading to a fundamental bank officials entered into their out-
borrowers, it
The two banks fall under the direct con- demonstrate in sions between the US and China during rethink by China towards both the Belt sized economic and political relation-
‘Dual circulation’
trol of China’s state council (cabinet), so Caracas. Beijing the presidency of Donald Trump, when and Road and its overseas lending pro- could find ship with [Venezuela] with a combina-
they function as arms of the state. They is picking China’s retreat from overseas develop- Washington used criticisms of the Belt file, analysts believe. Mr Wang says that tion of hubris, ambition and naïveté,”
itself at the
provide the overwhelming majority of through the ment finance derives from structural and Road as a justification to contain one strand of a new approach would be Mr Ferchen wrote. “[This] has contrib-
China’s overseas development lending Latin American policy shifts, according to Chinese China, Prof Chen adds. to pursue more lending through multi- centre of a uted to the region’s worst economic,
and the funds they disburse rival in country’s analysts. “In domestic Chinese media, the fre- lateral bodies such as the Asian Infra- humanitarian, and political crisis in
debt crisis in
scale those of the World Bank, the estimated “China is consolidating, absorbing quency of the [Belt and Road] topic structure Investment Bank. In addition, decades.”
world’s largest multilateral lender. $150bn of and digesting the investments made in occurring has come down a lot in the last Chinese financial institutions may co- developing Debt renegotiations have proliferated
Between 2008 and 2019, the two Chi- defaulted debt the past,” says Wang Huiyao, an adviser few years, partly to downplay China’s operate more with international lending markets’ as the pandemic has clobbered emerg-
nese banks lent $462bn, just short of the to China’s state council and president of overseas expansion ambitions,” says agencies, he adds. ing economies in Africa and elsewhere.
Getty Images
$467bn extended by the World Bank, Prof Chen, who is also director of the Such a change would amount to a fun- A report by Rhodium Group, a consul-
according to the Boston University data. Asia Global Institute think-tank. “I damental reorientation. The Beijing- tancy, says at least 18 processes of debt
In some years, lending by the Chinese expect this retrenchment to continue.” based AIIB and another multilateral renegotiation with China have taken
policy banks was almost equivalent to Yu Jie, senior research fellow on China bank in which China is a stakeholder, the place in 2020 and 12 countries were still
that by all six of the world’s multilateral at Chatham House, a UK think-tank, New Development Bank, are very differ- in talks with Beijing as of the end of Sep-
financial institutions — which along says Beijing’s recently-adopted “dual ent organisations from the two Chinese tember, covering $28bn in Chinese
with the World Bank include the Asian circulation” policy represents a step policy banks. They have lent out a frac- loans.
Development Bank, the Inter-American change for China’s relationship with the tion of the policy banks’ annual average So far, Beijing appears keen to pursue
Development Bank, the European outside world. The policy, which was and are not directed by Beijing’s policies a soft touch, deferring interest pay-
Investment Bank, the European Bank first mentioned at a meeting of the polit- but by a board of directors who repre- ments and rescheduling loans. But the
for Reconstruction and Development buro in May, places greater emphasis on sent the interests of stakeholder coun- experience is reinforcing a growing
and the African Development Bank — China’s domestic market — or internal tries. sense of wariness that now infuses Mr
put together. circulation — and less on commerce Xi’s big project.
Flaws in the initiative
In global development finance, such a with the outside world. China is finding out, says Mr Hillman,
sharp scaling back of lending by the “Volatile Sino-US relations and more Overall, though, China’s rethink betrays that “risk runs both ways along the Belt
Chinese banks amounts to an earth- restrictive access to overseas markets a tacit recognition that its overseas lend- and Road and the damage can return to
quake. If it persists, it will exacerbate an for Chinese companies have prompted a ing bonanza has been ill-conceived. Beijing”.
Obituary
Paul Sarbanes was never your identikit can elected to the US Senate and also Nixon for obstruction of justice. But he to be knowingly false. In spite of many
US senator, even by today’s outlandish that one of his three children, John, now drafted and presented it so effectively subsequent attempts to water the act
Formidable standards. Grandstanding was anath- occupies the seat in the House of Repre- that it passed the committee on a 27-11 down, it remains on the statute books.
ema to him and microphones and cam- sentatives he first won in 1970. His wife, vote. Two weeks later, pre-empting a These moments in the sun apart,
eras could make him run a mile. Christine, died in 2009. full House vote to impeach, the presi- Sarbanes shunned publicity. But
figure who
But for half a century Sarbanes, who He rapidly moved beyond the Eastern dent resigned. successive Democratic leaders in the
has died aged 87, was a formidable force Shore, with a scholarship to Princeton But perhaps his finest legislative hour Senate — Robert Byrd, George Mitchell
transformed behind, and when necessary in front of, and as a Rhodes scholar at Oxford — and one that was illustrative of his and Tom Daschle — turned to him when
the legislative arras. (where he became friends with Geoffrey methodical approach to lawmaking — they had a problem in keeping the party
The bookends of his political career Owen, a former Financial Times editor.) came as chairman of the Senate banking caucus united behind a given issue. He
audit regulation
were his role in drafting the first article He then obtained a law degree from committee investigating the Enron was “a clear and thorough thinker”, Mr
of impeachment against President Rich- Harvard, clerked for a federal judge and debacle, which not only set Wall Street Byrd once observed.
ard Nixon for his Watergate “high worked for President John F Kennedy’s shivering but impoverished the energy Sarbanes-Oxley apart, few bills bore
crimes and misdemeanours” and, some Council of Economic Advisers. Politics company’s employees. Amid all the his name. He explained why in a
30 years later, his co-authorship of the inevitably beckoned, first in the state political sound and fury, his committee 1994 interview. “I’m not always out
Paul Sarbanes Sarbanes-Oxley Act. The act trans- house and then the US Congress. held no less than 10 substantive hear- there blowing my own trumpet. You can
formed regulation of auditors and His modest upbringing gave him an ings during which expert advice was get a lot done by letting others take
US senator
financial reporting, besmirched by twin acute understanding of grassroots sought on possible remedies. some, maybe all, of the credit for it.”
1933-2020
scandals involving Enron, the energy ethnic politics in Maryland. Talking to The bill, which was also named after True to form, when he retired from
company, and WorldCom, an upstart the FT in 2002, he enumerated, almost the Republican who sponsored it in the Paul Sarbanes played a key role in the Senate in 2007 he did not take the
telecommunications group. despairingly, the basic mistakes he felt House, passed both chambers over- Richard Nixon’s impeachment standard next step of becoming a lawyer
The key to understanding the lieutenant-governor Kathleen Kennedy whelmingly. or lobbyist in Washington, seeking to
Democrat was undoubtedly his Greek Townsend, daughter of Robert It created a federal oversight board influence his former colleagues. But he
ancestry. Paul Spyros Sarbanes was Kennedy, was making in her campaign for the accounting industry, limited the It was a source of great never lost his interest in politics.
born on February 3, 1933, in Salisbury, for the governorship of the reliably consultancy work accountants could do He died on Sunday evening, an aide
pride to him that he
Maryland, on the state’s Eastern Shore, Democratic state. She lost. for firms they audited, and required told the New York Times, while
to immigrant parents who ran a Sarbanes was only a junior member of auditors to report on companies’ became the first watching a televised debate between
restaurant in town, where he helped out the House Judiciary Committee panel internal controls. candidates in a runoff for a US Senate
Greek-American elected
as a boy. when its chairman, Peter Rodino, It also required company executives seat in Georgia, which could decide
It was a source of great pride to him assigned him the task of preparing the to sign off on financial statements and control of the chamber.
to the US Senate
that he became the first Greek-Ameri- first article of impeachment against face criminal action if they were found Jurek Martin

DECEMBER 12 2020 Section:Features Time: 11/12/2020 - 18:27 User: alistair.hayes Page Name: BIGPAGE, Part,Page,Edition: USA, 6, 1
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SATURDAY 12 DECEMBER 2020
Big Tech faces its
Standard Oil moment
Allowing new innovative competitors to emerge is critical
More than a century ago, US antitrust grow stronger as digital behaviour
regulators ordered the break-up of takes over more aspects of work and
Standard Oil. The company had grown life. Together, Google, Facebook and
into an industrial empire that pro- Amazon last year accounted for more
duced more than 90 per cent of Amer- than 70 per cent of online advertising
ica’s refined oil output. Today, the US globally. There are legitimate concerns
authorities have Big Tech in their that dominant companies stifle inno-
sights. According to their critics, Amer- vation and can use their power to buy
ica’s large technology companies wield up potential young competitors. Much
similar levels of power to that of Stand- of the recent concern over Big Tech has
ard Oil 100 years ago. Their market focused on how these platforms use the
power is not in oil but in data, the life- personal data of millions of users to
blood of the modern economy. entrench themselves.
This week, the Federal Trade Com- The drive to curb Big Tech’s power
Obama’s story cannot match civil war hero’s epic journey
mission and a group of 48 US attorneys- has gained momentum this year. Com-
general hit Facebook with its first anti- petition authorities in Europe and in
trust charges on home soil. If regulators the UK are ahead of the US in drawing
can prove that the social media net- up broad new rules over how the plat-
work deliberately acted in an anti- forms operate. The European Commis- In his perceptive review of Barack to commander of all the Union armies throat cancer, $150,000 in debt and teach us the necessity of the first; our
competitive way, it could lead to the sion will next week unveil sweeping Obama’s presidential memoir (Life & in the civil war and 18th president of had only $180 in the bank. Never out of power secures the latter.”
company’s break-up. new powers that will define “very large Arts, FT Weekend, November 28), the US in 1869 in just seven years. print since publication in 1885, this On the day of Grant’s funeral in
The central allegation is that Face- platforms” as those with more than Edward Luce writes that “there is no Grant’s military and political rise is one superb military autobiography was a August 1885 The New York Times
book chose to buy WhatsApp and 45m users. The proposals are designed political ascent to compare [to of the greatest stories of American literary feat that required wrote, “the name of General Grant will
Instagram in order to neutralise their to force Facebook and others to take Obama’s],” who went from being leadership. He was the American extraordinary gifts. be remembered by Americans as that
threat, and to entrench its own position greater responsibility for policing the “almost broke, and at the nadir of his Ulysses. Near the end of his book, and in great of the saviour of their country in a
as the dominant social networking content on their sites and to share data political fortunes as an Illinois Mr Luce rightly praises the “limpid suffering, Grant wrote: “The [civil] war crisis more appalling than any it has
platform. The result, the regulators with authorities on how they moderate legislator” in 2000 to the White House prose” in Mr Obama’s memoir A has made us a nation of great power passed through since the United States
claim, was that consumers were denied illegal content. in late 2008. Promised Land. Again, Grant wrote his and intelligence. We have but little to became a nation”. He deserves to be
the benefits of competition. Such regulatory moves will be Mr Luce overlooks Ulysses S Grant, Personal Memoirs, to this day the gold- do to preserve peace, happiness and remembered and read today.
There are significant hurdles for the needed to curtail the power of the plat- who went from a modest clerk in a standard of a presidential memoir, in prosperity at home, and the respect of Miguel Monjardino
case to clear, not least the fact that the forms long-term. Aggressive antitrust leather goods store in Galena, Illinois, just one year when he was dying with other nations. Our experience ought to Azores, Portugal
FTC approved both of the acquisitions, enforcement is an important part of
that of Instagram in 2012 and Whats- this, even if it does not guarantee suc-
App in 2014. The courts will have to cess and can take years to play out. The Craving green space and Cambridge dons and 1999): “Freedom to speak only There’s more to the film
consider whether the acquisitions were very threat of enforcement can be a inoffensively is not worth having.”
clean air is not nostalgia their code of conduct than Gekko’s famous line
lawful then, not whether they would be deterrent on future deals. Dick Taverne
lawful today. Regulators will also have One of the challenges for regulators Can a renewed appreciation for green As Camilla Cavendish points out, House of Lords, London SW1, UK I respectfully suggest that Robert
to prove that rejecting Facebook’s is the nature of the digital economy: spaces and clean air in cities caused by “respectful” is a vague word for Armstrong is much too young to make
If a ‘People of 2020’ series
acquisitions would have led to services are often free so consumers do working from home and a sharp Cambridge university to use in its code a judgment about the movies he
increased competition and to an not face rising prices. Consumers also decline in commuter traffic during the of conduct for the disposition it is all women, so be it! reviews, none more so than Wall Street
improvement in choice for consumers. appreciate and often heavily rely on the pandemic be attributed to nostalgia requires staff and students to have for (“Right on the money”, Life & Arts, FT
The enforced unwinding of past deals products Big Tech companies provide. (“A bad week for nostalgia”, Opinion, different opinions (Opinion, FT I absolutely love your Women of the Weekend, December 5). That’s because
carries other risks, notably the poten- The platforms, meanwhile, argue they Life & Arts, December 5)? Weekend, December 5). People could Year series (Spectrum, December 5). I of the incredible change that occurred,
tial to undermine trust in policymak- are being punished for entrepreneurial In Washington, your columnist Janan easily object to speakers on the read it with rapt attention. But the title not just on Wall Street, but more so in
ers for business in general. success and innovation. A new regula- Ganesh is clearly able to step outside grounds that their opinions disrespect pains me. Why not “People of 2020”? If the economy, within the US and across
There are good reasons for regulators tory approach to the industry must aim his home, find himself quickly on them, leaving a problem of how they happen to all be women, so be it. the world in the eighties.
to set limits on the power of technology to prevent monopolistic practices and Massachusetts Avenue and only a short disrespect is to be defined and proved. It’s about time. Don’t forget that this was the era of
platforms such as Facebook and promote the creation and growth of the drive from the 1,754 acres of Rock She, but not the university’s governing Jennifer Sireklove Thatcher, Reagan, hostile takeovers,
Google, whose influence is only set to next generation of competitors. Creek Park. council, favours “tolerance” as it Seattle, WA, US leveraged buyouts and free-market
In contrast, the average commuter “allows issues to be aired and zealots. While I love Trading Places and
Don’t pity New York’s
from suburban Virginia or Maryland weaknesses exposed”. like Working Girl, they really aren’t
who drives to a job in DC spends 102 But does it always? “Tolerance” can lossmaking developers serious or important movies. Wall
hours a year stuck in traffic, equivalent recoil into a grudging myopia. How Street was, and still is, an epic of the
to two and a half weeks of eight-hour about “open to understanding”? It Writing as a longtime resident of times, a morality play and a great story.
Climate change battle
working days. would, after all, accord with a Manhattan, I have no sympathy for Stephen Essrig
No wonder that working from home university’s purpose. Gary Barnett, the developer New York, NY, US
Mr Ganesh has enjoyed “a year of no Manus Charleton bemoaning his losses (“The long view
draws close to home What’s pink and read and
real hardship”. Sligo, County Sligo, Ireland on luxury”, House & Home, FT
Wanting to arrest, or better yet Weekend, December 5). doesn’t blow away?
Recalling a judge’s advice
reverse, a steady decline in the quality Architecturally uninteresting, out of
of daily life is not nostalgia. Surely it is on right to cause offence scale, these buildings are eyesores, a Can I just say thank you for the
Consumers will need to change their behaviour to meet net zero target possible to have a rapid, 21st-century blight on the cityscape. Why not take restraint you have shown in not adding
response to the pandemic from the Having read Camilla Cavendish’s article the skills needed to produce “super to the hugely annoying advertising
Americans use about 1.5bn litres of replacing natural gas boilers and global pharmaceutical industry, which about the issues being debated in quality, super finishes”, and apply it to detritus that falls out of every other
gasoline a day driving around in their improving energy efficiency of homes everyone applauds, and to pay renewed Cambridge university about respect affordable and middle class housing? newspaper, blows away, and must
cars and trucks. The carbon dioxide by installing electric-powered heat attention to improving the quality of versus tolerance, (Opinion, December That would be a positive surely be the least effective form of
produced hastens global warming, as pumps will cost £10,000 on average the urban environment. 5) it is worth noting Lord Justice contribution to New York City. marketing ever. Fire-lighting only.
do the greenhouse gases created by the per property. Christopher Gibbs Sedley’s observation (Redmond-Bate Frances Kazan Judith Beresford
myriad other activities that make up Britain’s difficulty with home heating Villars, France vs Director of Public Prosecutions, New York, NY, US Nunney, Somerset, UK
people’s daily lives — the hot shower, illustrates a wider problem; fossil fuels
the warm meal, the light that lets you are woven into the fabric of many soci-
read at night. So far, efforts to cut eties. The UK relies on gas because the
Will wealthy
greenhouse gas emissions have largely North Sea provided it with a plentiful On Monday, I received a text from my after all, where 29m people under the Will wealthy Americans use their
left our energy-hungry daily routines source of oil and gas (and much needed healthcare provider, the NYU Langone age of 65 lack medical insurance, but economic and social capital to cut the
Americans jump
unchanged. Exactly five years after the revenue) from the 1970s onwards. Health medical centre in New York: where the wealthy have access to line? Some say no. One financier in his
Paris agreement was signed, it has Similarly, the EU’s recent budget tra- “The Covid-19 vaccine will be here in cutting-edge treatments, concierge eighties who sits on a major New York
become clear that if we are to make vails over agreement to cut the bloc’s the queue for the early 2021. We will contact you as services and are able to amplify their hospital board told me that he would
significant and rapid progress towards greenhouse gas emissions by at least 55 soon as we have info about who can access to the best doctors by taking “absolutely not”. Another New York
meeting climate change goals, lifestyles per cent over the next decade derived Covid vaccine? get it when.” But there was a caveat: seats on hospital boards. luminary in his fifties, who also sits on
will have to change. from Poland’s historic attachment to since the doctors at NYU Langone The other problem is a hospital board, said that anyone who
In the UK, a new report by the gov- coal. The country has long been Health have no idea when that “info” fragmentation. The UK can roll out a does should be “named and shamed”.
ernment’s climate advisers this week concerned it will lose out in a green might arrive, the text also urged me plan because there is a single body in Meanwhile, Dr Haseltine derides the
laid out in the most granular detail yet transition. Coal still generates about not to contact them — yet. charge: the NHS. In the US, the idea as not just “utterly unethical” but
just what consumers will need to do to three-quarters of Poland’s electricity. Even if those inquiries would mostly vaccine will initially be distributed to also “dangerous”, if there is a black
put the country on a path to achieving In addition to large sums of invest- have come from the worried well, states according to their share of the market in untested vaccines.
net zero emissions by 2050. Until now, ment and medium-term targets to many healthcare providers in New national population, and state officials Precisely because the issue is so
most emissions cuts achieved since reduce emissions, governments also York (and other regions) are will then decide how to run emotive, almost nobody I spoke to
1990 have been “invisible” to the pub- have to be clear on their priorities — reportedly facing a barrage of requests vaccination programmes. In some would talk on the record. “Lots of
lic as they have come largely through and underpin these with consistent from the rich and powerful, desperate areas, local officials have said they will people will try to get it early — even if
the phase-out of coal-fired power political messaging. In the UK, Boris for access to the first round of delegate the rollout decisions to no one admits to it,” a real estate
plants, the Climate Change Committee Johnson’s government has won plau- vaccines. healthcare experts. In others, local developer told me.
said. In just nine years’ time, Britons dits for setting out a 10-point plan The most ethical medical groups are cities are expected to take charge. Could the incoming administration
will need to have slashed their meat showing how the country will achieve trying to implement whatever This makes sense but it means there change this? Possibly: those such as
and dairy consumption by a fifth. By its net zero pledge. Yet, as campaigners distribution plan emerges as fairly as could be a big variation in the tactics Dr Haseltine are begging them to
Notebook
2033 home gas boiler sales should end. have pointed out, Mr Johnson’s green possible — even as uncertainty and used. The Advisory Committee on create a centralised plan with clear
Other changes in consumer behaviour vision sits at odds with plans confirmed anxiety mount. “It’s going to be chaos, Immunization Practices, for example, guidance. Some people around
include switching to electric vehicles by chancellor Rishi Sunak last month by Gillian Tett or close to chaos,” William Haseltine, said last week that the first round of president-elect Joe Biden are urging
and potentially limiting flying. to press ahead with a £27bn road- one of America’s leading medical vaccines should go to nursing-home him to embrace the “name and
The scale of the changes required are building programme. Governments experts, admitted this week. Or as residents and carers, followed by shame” tactic as well.
such that it will require major invest- everywhere will need to consider how Arthur Caplan, a bioethicist at New essential workers and those with But don’t hold your breath. Quite
ment. The CCC road map estimates to balance commitments to reducing York University, told the STAT pre-existing conditions. However, apart from the fact the new team will
capital investment will need to rise to emissions with that of helping their medical journal: “There absolutely definitions of “pre-existing not be in office until late January, they
around £50bn a year by 2030 — up economies recover from the conse- will be a black market. Anything that’s conditions” may vary. As could the are confronting a system where
from £10bn a year today, and much of quences of the pandemic. seen as life-saving, life-preserving, concept of “essential worker”. In states profound health inequities are not
it from the private sector. Some The battle against climate change and that’s in short supply creates such as New York and Illinois, for only entrenched but also culturally
changes will be easier to promote than will require a combination of sacrifices, black markets.” example, financiers and bankers were normalised. The only thing unusual
others. In the case of reducing meat trade-offs and proactive steps by all. If This issue is not unique to the US. defined as essential workers during about the looming vaccine row is that
and dairy consumption, public bodies there is a positive lesson to draw from However, the ethics are particularly Covid. So were journalists. The net it could reveal these iniquities with
and schools can help to lead the way on Covid-19, it is that behaviours can emotive here for at least two reasons. result, then, will be loopholes which surprising clarity — and in a way that
offering plant-based meals, according change — and money can be found to One is the lack of any single-payer could, to use the language of Wall is likely to provoke a sense of unease
to the CCC. Other changes will be costly change them — when everyone is con- healthcare system. This is a country, Street, be prone to arbitrage. and alarm even among the rich.
and invasive to ordinary citizens; vinced of the seriousness of the threat.
DECEMBER 12 2020 Section:Features Time: 11/12/2020 - 18:32 User: alistair.hayes Page Name: LEADER USA, Part,Page,Edition: USA, 8, 1
12 December/13 December 2020 ★ FTWeekend 9
Opinion
The costs of tackling climate change keep on falling
Adair sum to save the world from catastrophic over the next 30. I will bet that in 12 by 2050 will be paying smaller annual Indeed, given those low rates and the “offsets” from reforestation or other
climate change. years’ time the current CCC chair heating bills. need to drive recovery from the nature-based solutions.
Turner
The estimates keep dropping because will need to explain why the commit- That pattern is reflected across the Covid-19 recession, additional But leading steel, shipping and
key technologies keep getting cheaper. tee’s latest estimates are again too world. By the 2050s, the transition to a investment to build a zero-carbon econ- cement companies are now making
Solar electricity costs have fallen 80 per pessimistic. zero-carbon economy will have omy could boost economic growth. For commitments to reach zero emissions
cent in 10 years, and even more in Summary “percentage of GDP” fig- increased living standards in most the UK, the CCC suggests a possible 2 per by 2050 within their own operations,
favourable locations such as India and ures typically seek to capture in one countries, even before allowing for the cent GDP boost by 2030. and the CCC sees the UK reaching net
I n 2008 the UK Climate Change the Middle East. Wind costs are down number both initial capital investments benefits of avoided climate change and Higher investment will create jobs zero by 2050 almost entirely by domes-
Committee, which I then chaired, around 60 per cent, and batteries are 85 and subsequent cost savings, using an reduced local pollution. Over the long during the transition. In the long term, tic action.
estimated that reducing Britain’s per cent cheaper. assumed cost of capital to express the lower costs to consumers must reflect In the shorter term, however, pur-
greenhouse gas emissions by 80 per In road transport, electrification former on an annualised basis. fewer people employed in specific sec- chased offsets have a vital role to play.
cent below 1990 levels by 2050 will make consumers across the world But the economics of transition are Less than 1 per cent tors. Once in operation, solar and wind Limiting climate change requires not
would cost 1-2 per cent of gross domestic better off. In other sectors, such as steel, best understood by considering the two farms employ almost no one. If electric only net-zero emissions by 2050 but big
of global GDP is a trivial
product in that year. In its latest report, aviation and shipping, decarbonisation components separately. In the vehicles are easier and cheaper to make, reductions in the 2020s. In some sec-
it reckons a 100 per cent cut will cost will increase costs but far less than once UK’s case, the CCC shows additional sum to save the world that means fewer jobs in car plants. But tors, these cannot be achieved by inter-
just 0.5 per cent of 2050’s GDP. assumed. Ten years ago most studies did investments rising to reach about building new power systems, improving nal action alone. Purchased offsets
from catastrophe
Global cost estimates have also col- not even try to price a 100 per cent £50bn or 2 per cent of GDP by 2030, but building insulation and installing more could contribute to the big financial
lapsed. In 2006, the Stern Review of the emissions reduction, since the “last subsequently declining and with cost energy-efficient equipment will create flows needed to limit and reverse eco-
Economics of Climate Change foresaw a 20 per cent” seemed prohibitively savings exceeding new investments by term, humanity does not face a trade- additional employment across the system destruction before it is too late.
cost of 1 per cent of global GDP to reduce difficult. We now know that total the mid-2040s. off but a clear win-win. world for at least two decades. Since 2008, technological advance
global fossil fuel-related emissions from decarbonisation is technically feasible Britain, for instance, will invest in up But we must invest to get there, and in Lower decarbonisation costs imply a and collapsing costs have made it possi-
25 gigatonnes to 18 Gt by 2050, with zero at very low cost. to 125 gigawatts of wind, mainly off- absolute terms the amounts seem huge reduced long-term need for carbon ble to reduce emissions far faster and at
emissions only achieved after 2075. A However, most published estimates shore, by 2050, but once the green elec- — about $1.5tn-$2tn a year globally on trading. Until recently, most companies lower cost than we dared hope. We must
recent report from the Energy Transi- still make conservative assumptions tricity system is built, running it will average over the next 30 years. But that in harder to abate sectors thought a seize this opportunity.
tions Commission suggests a cost below about future costs. Offshore wind costs cost much less than today’s system. will be only about 1.5 per cent of global large share of their emissions cuts would
1 per cent to achieve net-zero emissions have fallen 60 per cent in five years, but Households will invest in improved GDP. It can be easily financed in a world come from buying carbon credits from The writer chairs the Energy Transitions
globally by mid-century. This is a trivial the CCC assumes only an 11 per cent fall building insulation or heat pumps, but of negative long-term real interest rates. other sectors or countries, including Commission
Streaming shrinks the
Hollywood star
An ex-health department action, complete with booming sound,
at cinemas. It has aimed at the widest
worker claims she is being
audience, not the connoisseur.
intimidated for calling out Globalisation has helped the formula
to work: global box office revenues rose
alleged manipulation of
to $42bn last year. Teenagers are faith-
Covid data. By Lauren Fedor ful to long-running film franchises such
as those featuring Disney’s Marvel
superheroes; 12 to 17-year-olds in the US
H ollywood thrives on loud, and Canada went to the movies an aver-
R ebekah Jones mostly uses colourful confrontations in age of 4.9 times in 2019 compared with
Twitter to share updates on films such as last 2.9 for people in their 50s.
the Covid-19 pandemic in year’s Avengers: End- The cinema is under most strain in
Florida, from the number of game and the forthcom- the US, where box office revenues fell in
new cases to the test positiv- ing Godzilla vs Kong. So directors and 2019, even before the pandemic (the US
ity rate in the southern US state. actors have not held back since Warner- and Canada comprise only about one-
But on Monday Ms Jones, a 31-year- Media declared that it will suspend quarter of global box-office receipts).
old climate scientist who was fired this nearly a century of tradition in the face Mr Nolan’s Tenet was finally released in
year from her job at Florida’s health of pandemic disruption. the UK in August in an effort to get the
department, instead posted a 30-second Warner is to release all of its 17 new audience back, but it struggled in US
video showing police, guns drawn, films next year on its streaming service cinemas.
entering the home she shares with her HBO Max at the same time as in US cine- The growth of streaming has already
husband and two young children. mas. Cue outrage, with the director made performers less snooty about tele-
Ms Jones, who alleges she was fired Christopher Nolan firing back this week vision. Nicole Kidman and Hugh Grant,
after refusing to manipulate official that the stars “went to bed the night stars of the HBO show The Undoing, are
Covid-19 figures, blamed Ron DeSantis, before thinking they were working for A-list actors of the kind who would not
Florida’s Republican governor and an the greatest movie studio and woke up have been seen dead on the small screen
ally of President Donald Trump for the to find out they were working for the only a few years ago.
incident, in which police seized her worst streaming service”. It is easy to see the temptation for
phone and laptops. “This is what hap- Ouch. Mr Nolan has a way with words, Warner, facing a pile-up of new releases
pens to scientists who do their job hon- as well as with fitting action around baf- amid the pandemic and a streaming
estly,” she tweeted. “This is what hap- fling conceptual plots in films such service in need of help, to seize the
pens to people who speak truth to as Inception and this year’s Tenet. He opportunity to shake up Hollywood.
power.” might well be annoyed: since AT&T took Disney is releasing Pixar’s Soul to Disney
A spokesperson for Mr DeSantis said over Time Warner (including the Plus’s 74m subscribers on Christmas
the governor “had no involvement in Warner Bros studio and HBO) in 2018, it Day in the US, so Warner is not alone.
the investigation” and it was “absurd” to has focused intently on boosting broad- But it looks a bit desperate. HBO Max
claim the search was carried out in retal- band and mobile phone subscriptions, was a flawed idea — taking a pioneering
iation. State police said they were inves- rather than stroking the talent. service with a first-rate reputation in
tigating an alleged hack of the health More than cinematic pride lies behind
department’s emergency alert system — the anger at films such as the science fic-
Ms Jones says she had nothing to do with tion epic Dune becoming subscription Films such as ‘Dune’ and
the hack. Rick Swearingen, commis- fodder. Stars, agents and directors
‘Godzilla vs Kong’, with
sioner of the Florida Department of Law depend for their wealth on sharing in
Enforcement, said police acted “in box office profits, as well as being paid a $150m-plus budgets, are
accordance with normal protocols”. fee. “Ultimately, people want to make
Person in the News | Rebekah Jones not made for television
Since Ms Jones claimed in May that money,” John Stankey, AT&T chief exec-
some of Florida’s top officials were fid- utive, observed on Tuesday.
dling with Covid-19 data to downplay But Mr Nolan is surely correct that his HBO and bundling it confusingly with
A data scientist takes
the extent of the pandemic, she has streaming overlords “don’t even under- other Warner content. Having gained
been a thorn in Mr DeSantis’s side. On stand what they’re losing” in the effort only 13m active subscribers, it now
Friday, Mr DeSantis lashed out at Ms to catch Netflix and Disney Plus, their wants to pour new films down the same
Jones, saying she had “issues” and had more successful rivals. Hollywood’s funnel. No wonder the talent is irked.
alleged a “conspiracy theory at the most profitable films are cultural and Films such as Dune and Godzilla vs
on the Florida governor
department of health, which was financial blockbusters that are shrunk Kong, with $150m-plus budgets, are not
unfounded”. by the small screen. made for television. They are produced
Now she has gained traction beyond It does not mean that television is to be events, with huge marketing cam-
the state. Supporters see her as a heroic inferior. This week, I watched Mank, paigns and a series of release windows
whistleblower, one of a group of scien- David Fincher’s film about Herman from cinema to streaming to keep the
tific experts at odds with rightwing poli- Mankiewicz, who wrote the screenplay excitement, and the revenue streams,
ticians that includes Anthony Fauci, the of Citizen Kane with Orson Welles. Some bubbling away for years. It may not be
veteran immunologist who has publicly of the ravishing black and white cine- art, but it is a craft.
locked horns with Mr Trump and this matography would have shone in cine- Disney is expert at managing its fran-
week accepted a job in President-elect mas where it was released first, but its chises, turning cartoon princesses into
Joe Biden’s incoming administration. six weeks, Ms Jones says, more than outstanding misdemeanour stalking Ron Filipkowski, a Republican lawyer intimacy suited television. dolls and adventure films into theme
Born in 1989, Ms Jones spent most of 100m people had viewed the page. charge in a case dating back to July 2019. who was appointed by Mr DeSantis to a Much drama of the kind that used to park rides. Its space western hit The
her childhood in Mississippi, where “If you go to the Florida public health After being fired, Ms Jones set up a state judicial panel, resigned in protest. be a mainstay of cinema has migrated to Mandalorian on Disney Plus is a spin-off
major storms, including Hurricane Kat- website on Covid, they’ve been able to GoFundMe page that raised more than He says he was “stunned” by the video, television, thanks to HBO and Netflix. from the Star Wars films. Let cinema
rina in 2005, piqued her interest in nat- show their communities’ cases and tests $250,000. She used the funds to build adding he became “more furious” when That is where today’s successors to atrophy and the entire entertainment
ural disasters. “I wanted to be part of the district by district, county by county,” the Covid Monitor, an independent web- he read the warrant, which he said Mankiewicz have become auteur show- edifice would suffer.
solution, part of the team that prevents Deborah Birx, co-ordinator of the White site tracking the virus in the state. appeared to have “political purposes”. runners of series such as The Warner intends to return to US
those things from happening,” she House coronavirus task force, said in Ms Jones’s Twitter video sparked out- “They are not interested, I think, in Sopranos and The Crown — while film cinema-first releases when the pan-
recalled this week. She graduated from April. “That’s the kind of knowledge and prosecuting her for anything,” Mr Filip- directors make action flicks, romantic demic passes. But the writing is on the
Syracuse with a dual degree in geogra- power we need to put into the hands of kowski said. “They are interested in comedies and young adult epics. wall: if streaming takes over entirely,
phy and journalism, before earning a American people so that they can see Supporters see her as one intimidating, terminating or silencing Since the Star Wars and Super- the blockbuster as we know it becomes
masters in geography and mass com- where the virus is, where the cases are, state employees.” man films of the 1970s, Hollywood has an endangered species. No doubt some-
of a heroic group of
munication at Louisiana State Univer- and make decisions.” Ms Jones says while she was not sur- gone as big as possible to lure people one will make a movie about it one day.
sity. She then moved to Florida, where But less than a month later, Ms Jones experts at odds with prised by Monday’s search — “I think from their homes to pay for the commu-
she started, but did not complete, a PhD was fired. She filed a whistleblower DeSantis has been wanting to go after nal experience of watching spectacular [email protected]
rightwing politicians
in geography at Florida State University. complaint, alleging she was let go after me for a while” — she wants to use her
In 2018, she took a job at the state health refusing to massage the state’s Covid-19 new platform to “inform people about
department as a data scientist. She data at a time when Mr DeSantis was rage. “Unless we get more information what is going on with the virus”.
mostly worked on environmental pushing to end lockdowns and reopen showing otherwise, it looks like an act of “I am going to take advantage of this Top reads at FT.com/opinion
issues, such as toxic algae blooms, businesses. Officials said she was fired, retaliation or an attempt to silence Ms horrible thing that has happened to me
before the Covid-19 pandemic hit. with cause, for insubordination. Mr Jones for her critiques of the state’s Cov- to do my best to continue doing what I
In March, she spearheaded the DeSantis lashed out at Ms Jones, telling id-19 response,” said Democratic con- have always done,” she says, adding she 3 Quiz yourself whether a Covid wealth 3 Airbnb’s red-hot IPO will bring the usual
department’s coronavirus dashboard, a reporters her firing was a “non-issue” gressman Charlie Crist. “The people’s is looking to move her family to another tax is a good idea Big Tech problems
platform that was widely praised as an and citing allegations against her trust in their state government is criti- state in the coming weeks. A proposed levy on the rich revives the pros Its rising market power jeopardises the
accessible but comprehensive tool for regarding a former boyfriend. County cal, and these actions, without a fuller and cons of an old debate, writes Chris Giles social consent it needs, writes Elaine Moore
tracking the spread of the virus. Within court records show Ms Jones faces an understanding, are very damaging.” [email protected]
DECEMBER 12 2020 Section:Features Time: 11/12/2020 - 18:56 User: alistair.hayes Page Name: COMMENT USA, Part,Page,Edition: USA, 9, 1
10 ★ FTWeekend 12 December/13 December 2020
Long haul Boeing must close chasm with Feeding frenzy Meals start-up DoorDash
Airbus as 737 Max flies again stirs memories of dotcom IPOs
— ANALYSIS, PAGE 12 — MARKETS, PAGE 13
Sanofi and GSK hit vaccine rollout hitch Biggest asset
managers set
2050 net zero
3 Poor results for older adults 3 Launch delayed to late 2021 3 Australia drops homegrown product
emissions goal
Victor Mallet — Paris
Jamie Smyth — Sydney
Sarah Neville — London
Donato Paolo Mancini — Rome
Attracta Mooney — LONDON
The race for a Covid-19 vaccine has been
Thirty of the biggest asset managers,
hit by two setbacks, with Sanofi and
which collectively oversee $9tn, have
GlaxoSmithKline delaying the rollout of
set a goal of achieving net zero carbon
their jab until the end of next year and
emissions across their investment
Australia abandoning a trial after par-
portfolios by 2050 in a move expected
ticipants returned false positive HIV
to have huge ramifications for busi-
tests.
nesses globally.
France’s Sanofi and GSK of the UK
said yesterday their vaccine had failed The group, which includes Fidelity
to produce a strong immune response in International, Legal & General Invest-
the elderly because of a formulation ment Management, Schroders, UBS
that in effect meant that the dose was Asset Management, M&G, Wellington
too low. This will delay the expected Management and DWS, said they would
launch — if the vaccine is approved by work with their clients to cut emissions
regulators — to the last quarter of 2021, across their investments.
instead of mid-year as previously The decision means asset managers
hoped. would be forced to shun groups that are
Hours earlier, the Australian govern- ill-prepared for a lower carbon economy
ment said a homegrown vaccine would if they are to meet their net zero targets.
be dropped after several trial partici- “The transition to net zero will be the
pants retuned positive tests for HIV biggest transformation in economic his-
even though they were not infected with tory, and we want to send a clear signal
the virus. that there is simply no more time to
Sanofi and GSK said early test results waste,” David Blood, who co-founded
showed “an immune response compa- Generation Investment Management
rable to patients who recovered from with former US vice-president Al Gore,
Covid-19 in adults aged 18-49 years, but said. “The opportunities to allocate cap-
a low immune response in older adults ital to this transition over the coming
likely due to an insufficient concentra- years cannot be underestimated. With-
tion of the antigen” — a reference to the out the asset management industry on
molecule that stimulates the immune board, the goals set out in the Paris
system to respond to the virus. Agreement will be difficult to meet.”
Researchers examining why this had Asset managers have become increas-
happened found that reagents used to ingly concerned about the risks of cli-
measure how much antigen was mate change to financial returns.
included in each dose were giving incor- At the same time, the sector has been
rect readings, Sanofi told STAT News. While the Pfizer/BioNTech vaccine, above, is heading for US approval, Sanofi and GSK will focus on improving their jab’s antigen formulation targeted by climate activists, who argue
— Victoria Jones/Getty
Both companies said they were disap- that investors have a vital role in tack-
pointed by the results. ling global warming, either through
Roger Connor, president of GSK Glo- to ensure vaccines reach the developing withdrawing investments from carbon-
bal Vaccines, said: “Our aim now is to Thumbs-up from advisers of receiving authorisation. Alex Azar, the vaccine outweighed the risks for world, was set to receive 200m. intensive industries or backing cleaner
work closely with our partner Sanofi to US watchdog to move fast health and human services secretary, use in people 16 years and older, while The Australian vaccine was being groups.
develop this vaccine, with an improved said Americans could start receiving it four voted against and one abstained. developed by the University of Queens- “Climate change poses one of, if not
on Pfizer/BioNTech shot
antigen formulation, for it to make a as early as Monday or Tuesday. The panel raised concerns about land and pharmaceutical company CSL, the most, significant risks to the long-
meaningful contribution to preventing “Just a little bit ago, the FDA whether it should be authorised for which said it would not progress to term profitability and sustainability of
Covid-19.” The US regulator has signalled that it informed Pfizer that they do intend to 16- and 17-year-olds, so the FDA may phase 2 and 3 clinical trials because of companies, including our own,” said
Penny Ward, visiting professor in intends to approve the Pfizer/BioNTech move towards an authorisation for their be discussing exactly whom the concerns that the vaccine would inter- Anne Richards, chief executive of Fidel-
pharmaceutical medicine at King’s Col- vaccine soon, as the government vaccine. So in the next couple of days, emergency use authorisation will cover. fere with HIV testing and dent public ity International.
lege London, said Sanofi and GSK were prepares to roll out doses of the Covid- as we work to negotiate with Pfizer the Cody Meissner, paediatrics professor confidence. They stressed there was no The investors, which also include
using an existing technique that relied 19 jab as soon as it is authorised. information doctors need to prescribe it at Tufts University school of medicine, possibility the vaccine could cause HIV Japan’s Asset Management One and
on boosting vaccine material to induce Stephen Hahn, the Food and Drug appropriately, we should be seeing the argued that more information was infection and that follow-up tests had France’s Axa Investment Managers,
an adequate immune response. Older Administration commissioner, and authorisation of this first vaccine,” Mr needed about the inflammatory confirmed there was no HIV present in formed the Net Zero Asset Managers
adults are known to have lower immune Peter Marks, director of the FDA Azar told ABC’s Good Morning America. response in younger people, pointing trial participants. initiative ahead of this weekend’s five-
responses to these types of vaccines but division responsible for overseeing The FDA has been eager to show it is out there were not many subjects aged Scott Morrison, Australia’s prime year anniversary of the Paris Agree-
this can be overcome, either by repeated vaccines, said yesterday that they had being thorough to counter accusations 16 and 17 in the trial. minister, said the abandonment of the ment, where countries agreed to limit
injections, or by increasing the antigen informed Pfizer that the regulator “will that the approval process has been The FDA could also be trying to UQ/CSL vaccine would not delay the global temperature rises.
dose in each shot. rapidly work toward finalisation and politicised, and to try to ensure enough determine what advice to include about national vaccination programme, As part of the initiative, the investors
Sanofi and GSK are two of the biggest issuance of an emergency use people are willing to take the vaccine. allergies, after the UK regulator warned because CSL could start manufacturing pledged to set an interim target for the
vaccine makers in the world so their authorisation”, a day after an advisory In one sign of the pressure the that people with a significant history of rival vaccines sooner. proportion of assets to be managed in
expertise and use of existing techniques, group voted to recommend that the regulator is facing, Donald Trump, who allergic reactions should avoid the jab. The Australian government said it line with achieving net zero emissions
rather than the new messenger RNA vaccine receive approval. has complained about the time it has The US government is offering to try had bought 31m extra doses of rival vac- by 2050 or sooner and to review this at
approach used by Pfizer/BioNTech and The US regulator has notified the taken to approve a vaccine, wrote on to boost production of the Pfizer/ cines produced by AstraZeneca/Oxford least every five years. The aim is to have
Moderna, had raised hopes that they Centers for Disease Control and Twitter that the FDA is still a “big, old, BioNTech vaccine as it tries to procure university and Novavax. It already had all of their assets under management
would become major suppliers. Prevention and Operation Warp Speed, slow turtle”. He added: “Stop playing another 100m doses. Operation Warp an agreement with Pfizer/BioNTech. eventually included.
The EU has ordered 300m doses of the government programme to games and start saving lives!!!” Speed would like to double its pre- Australia plans to begin its vaccination Colin Baines, investment engagement
the Sanofi/GSK vaccine, while the UK accelerate development of a vaccine, so A 17-person majority of the panel’s order by June 2021, according to a programme from March, arguing that manager at Friends Provident Founda-
has ordered 60m. The US has an order that they can prepare to distribute the scientists voted in favour on Thursday person familiar with the matter. its success in suppressing the spread of tion, pointed to the need for concrete
for an initial 100m doses plus an option jab, which may be done within 24 hours evening, agreeing that the benefits of Hannah Kuchler and Kiran Stacey the virus meant it did not have to rush. plans in order to avoid accusations of
for 500m. Covax, a partnership aiming Additional reporting by Leila Abboud greenwashing.
Travel & leisure Technology Insurance
French football clubs suffer as SoftBank sells robot maker Zurich extends US footprint
Mediapro rights deal collapses in $1.1bn deal with Hyundai with $3.9bn MetLife purchase
Leila Abboud — PARIS reached with the league and the channel Kana Inagaki — Tokyo robotics challenge sponsored by the US Oliver Ralph — London in rates in commercial insurance, this
Murad Ahmed — LONDON would be shut down, without giving Song Jung-a — Seoul defence technology agency Darpa in late transaction will strengthen our ability
Swiss insurer Zurich is to expand in the
Heavily indebted broadcaster Medi- dates. “There’s a practical question of SoftBank has made a hefty return on its 2013. Google later shut down the Schaft US with its $3.9bn acquisition of to achieve our 2022 targets.”
apro is set to abandon its €780m how fans watch football until Christmas investment in Boston Dynamics after it division. MetLife’s property and casualty insur- Mr Greco told the Financial Times
annual TV rights deal to screen French — it’s unclear,” said a French broadcast- agreed to sell the US robotics group to The deal comes as Hyundai has been ance business. that Zurich had been looking at the
football in a move that will leave the ing executive briefed on league meet- South Korean carmaker Hyundai in a expanding its footprint in robotics, part MetLife business for some time, and
finances of Ligue 1 teams in chaos. ings. “There is absolute chaos here.” deal valued at $1.1bn. of a transition into a broader range of The MetLife business sells motor and that the deal would help Farmers by giv-
It is an inglorious end to French foot- mobility services. Mr Chung has home cover, and will give Zurich added ing it access to new distribution chan-
After months of court-mediated negoti- ball’s brief fling with Mediapro, which Under the agreement announced yes- pledged to reduce the company’s reli- scale in the world’s biggest insurance nels and a more balanced portfolio.
ations, the Spanish company has agreed the league chose with great fanfare in a terday, Hyundai and its chairman ance on traditional automaking and market. The company is teaming up Farmers focuses on home insurance,
to return the rights to 2020-24 Ligue 1 2018 auction as a way to boost the value Euisun Chung will hold an 80 per cent develop growth drivers including robot- with Farmers Exchanges, its existing US while the MetLife business sells a lot of
games but will pay only a portion of of the league’s TV rights above €1bn for stake in the maker of robots including ics and urban air mobility. partner, to make the acquisition, which motor cover.
what it owes to the French league after the first time. Football and broadcasting the bipedal Atlas and the four-legged will bring with it $3.7bn of annual pre- MetLife’s main business is in life
skipping two payments since October, executives in other countries have fol- Spot. SoftBank will retain a 20 per cent miums and $245m of profits. insurance, with only about 5 per cent of
according to people familiar with the lowed the Mediapro mess closely, seeing stake through a subsidiary. Boston Dynamics, The deal will combine the seventh the group’s earnings coming from prop-
in which Hyundai is
matter. it as a warning sign of how coronavirus- Google bought Boston Dynamics, a and 18th-largest property and casualty erty and casualty insurance.
to buy an 80 per
The league will then be free to sell the induced losses are forcing TV compa- pioneer in mechanical robotics that insurance businesses in the US, creating Michel Khalaf, MetLife’s chief execu-
cent stake, makes
rights to another company, and has nies to re-evaluate how much they are originated at the Massachusetts Insti- a range of robots, a new number six in the market. tive, said the deal was another step in
already begun talks with its former willing to pay to screen games. tute of Technology, in late 2013, and sold including Spot As with their existing arrangement, the execution of its strategy and would
broadcaster, Vivendi-owned Canal Plus. The crisis in French football began in it to SoftBank in 2017. Farmers will carry the insurance risk allow the company to focus on its core
But French football and broadcasting October when Mediapro skipped a At the time, SoftBank agreed to buy Hyundai plans to reduce the propor- from the acquired business and Zurich businesses, which include employee
executives expect that any new deal will €172m payment to the league, only the Boston Dynamics as well as Japanese tion of its revenues from car manufac- will provide investment management benefits and retirement products.
be worth substantially less than the second on the contract, and said it robotics group Schaft in a deal valued at turing to 50 per cent, with robotics and and other services in exchange for a fee. After announcing the sale, MetLife
Mediapro contract, which will put huge wanted to renegotiate the price because more than $100m. It will receive $574m urban air mobility making up 20 per Zurich is paying $2.4bn of the purchase said it would buy back $3bn of shares.
pressure on club finances. The agree- of the damage wrought by the pan- from the sale to Hyundai, according to a cent and 30 per cent respectively. price while Farmers is paying the rest. Kamran Hossain, an analyst at RBC
ment still has to be approved by the demic. Jaume Roures, Mediapro’s co- person familiar with the transaction. The group said it saw growth potential “The acquisition significantly Capital Markets, said: “The deal offers
French commercial court. founder, said in November that with SoftBank’s acquisition of Boston for logistics robots used in warehouses increases the potential for growth at the the Farmers Exchanges a nationwide
It remains unclear when the transi- games being played in stadiums without Dynamics was initially held up by a and factories and for service robots that Farmers Exchanges and will further presence with the ability to access new
tion to a new broadcaster will occur. fans and the economy in freefall, the review conducted by the Committee on can be used by the disabled or elderly. boost the share of Zurich’s profits linked distribution channels.”
L’Equipe newspaper reported that staff rights were simply no longer worth the Foreign Investment in the US. Ulti- This is the first large-scale acquisition to stable fee-based earnings,” said Mario Zurich’s last big deal was the $2.1bn
of Mediapro’s channel Téléfoot were agreed price. It then skipped a second mately, the deal excluded the acquisi- since Mr Chung became chairman in Greco, Zurich’s chief executive. purchase of ANZ’s life insurance busi-
told yesterday that a deal had been payment due in early December. tion of Schaft, which won an advanced October. “Together with the continued increase ness in Australia two years ago.
DECEMBER 12 2020 Section:Companies Time: 11/12/2020 - 18:55 User: jon.wright Page Name: CONEWS1, Part,Page,Edition: USA, 10, 1