(Bloomberg) — European Commission President Ursula von der Leyen made an urgent appeal for international action to prevent a global food crisis that she said is being maliciously stoked by Russian President Vladimir Putin.
The impact of Russia’s invasion of Ukraine is dominating the World Economic Forum in Davos, which has returned in-person after a two-year hiatus due to the pandemic. Bloomberg will host panels later on Tuesday on energy, security and South Asia with guests including the prime ministers of Spain and Belgium, NATO Secretary General Jens Stoltenberg and Pakistani Foreign Minister Hina Rabbani Khar.
Earlier, European Central Bank President Christine Lagarde told Bloomberg Television that officials won’t rush into withdrawing stimulus as her French colleague echoed her to insist there’s no consensus for a half-point interest-rate hike.
Key Developments
- Lagarde Says ECB Won’t Rush as Consensus Shuns Half-Point Hike
- BofA CEO Says He Understands Elon Musk’s ‘Frustration’ Over ESG
- UBS CEO Says Wealth Clients Digesting a Triple Whammy of Shocks
- Energy Crisis Makes Transition an ‘Unprecedented Challenge’
- Ukraine Urges Musk’s Starlink to Keep Helping Alongside Weapons
All times CET:
Poland Sees Unrest in North Africa Over Grain (11:50 a.m.)
Polish President Andrzej Duda warned of civil unrest in North Africa unless Ukraine is able to ship its grains that are trapped in the country because of the war.
Ukraine accounts for about 80% of grains exports to countries like Egypt, and it’s key to ensure the shipments are made through ports including on the Baltic Sea in Poland, Latvia and Lithuania, he told a panel. If that doesn’t happen, many in northern Africa could face starvation, he said.
Von der Leyen Denounces Russian ‘Blackmail’ (11:30 a.m.)
“Russian artillery is bombarding grain warehouses across Ukraine –- deliberately — and Russian warships in the Black Sea are blockading Ukrainian ships full of wheat and sunflower seeds,” von der Leyen said in a speech, denouncing what she called “Russia’s blackmail.”
Europe is “working hard to get grain to global markets,” including 20 million tons of wheat currently stuck in Ukraine, she said. The bloc is also boosting its own production and working with the World Food Programme make sure vulnerable countries can buy food at affordable prices, she added.
Estonia Sees Turkey Spat Slowing NATO Enlargement (11 a.m.)
Estonian President Alar Karis said he’s confident that negotiations with Turkey will overcome its objections to Sweden and Finland joining NATO. But he told Bloomberg that the dispute over support for Kurdish groups, which Ankara regards as terrorists, could potentially slow down their inclusion in the military alliance.
“Maybe in 6 months,” he said. “Within a year it should be there. But again it’s very difficult to predict especially in this stage of this process.” Asked what would be the repercussion if Turkey refused to budge, he replied “I don’t know, I don’t think about it. NATO’s a collective organization and then we have to sit down and think about it. If it’s right to have a veto from one country or if we should have a voting system, I don’t know.”
IBM Warns of Cyber-Attack Risk (10:40 a.m.)
IBM CEO Arvind Krishna said a major cyber attack on “critical infrastructure is going to happen.” Speaking on a panel, he said it was inevitable that “a bad actor, probably a nation state” will hack essential public services. He revealed that digital coverage of the Augusta Masters golf tournament was hit with 40 million cyber attacks.
War Must Not be Excuse for Climate U-Turn: Sanchez (10:30 a.m.)
Spanish Prime Minister Pedro Sanchez warned fellow leaders that the war in Ukraine must not be used as an excuse for backpedaling on climate goals.
“I think it’s very important to reaffirm this commitment today, because perhaps for some leaders this war could be used as an excuse not to fulfill their commitments on climate,” Sanchez said during a Q&A. “We should not forget that for climate change we don’t have a vaccine,” he added. “And for that we need to strengthen multilateralism and not forget the biggest threat that we have ahead of us.”
ECB’s Villeroy Sees No Consensus for Half-Point Hike (10:20 a.m.)
ECB Governing Council member Francois Villeroy de Galhau pushed back against the idea of a half-point rate increase.
“A 50 basis-point hike is not part of the consensus at this point,” the Bank of France governor told Bloomberg TV. “Interest rate hikes will be gradual.”
Enel Seeks Viable Buyer for Russia Unit (10:10 a.m.)
Enel SpA needs to find a “viable buyer” for its Russian unit after starting the selling process in the wake of Russia’s invasion of Ukraine, CEO Francesco Starace said in an interview on Bloomberg Television.
Starace also said “we need to be prepared for shocks” on Russia fossil-fuel supply. “We have to be prepared for the worst. This is not a simple situation,” he added.
Gnodde Says M&A Business ‘Surprisingly Strong’ (9:40 a.m.)
Goldman Sachs Group Inc.’s Richard Gnodde said the M&A pipeline is “still surprisingly strong” as companies continue to look to buy assets as prices fall.
“We really haven’t seen a slowdown,” the chief executive officer of Goldman Sachs International said on Bloomberg TV. About 70% of Goldman’s workforce are now typically in the office and that number is “drifting upwards,” he added.
CATL Sees Switch From Combustion Cars by 2035 (9:30 a.m.)
The world’s biggest maker of electric-vehicle batteries said it expects sales of combustion vehicles to end in major markets by 2035 at the latest.
Contemporary Amperex Technology Co. is pouring billions into rapidly expanding production to meet anticipated demand as batteries displace engines powered by fossil fuels. Chief Manufacturing Officer Jun Ni made the forecast at a panel on Tuesday, in which he didn’t specify any geographical markets. Still, it’s in line with major automakers like Volkswagen AG also planning to eliminate combustion car sales in Europe by 2035.
Swiss Re Quantifies Ukraine War Hit (9:20 a.m.)
Swiss Re expects a hit of $10 billion to $20 billion for the insurance industry from the war in Ukraine, Chairman Sergio Ermotti said in an interview with Bloomberg TV. Between the war and the Covid-19 pandemic, the reinsurer has seen its share of volatility in recent quarters, he said.
“You see more people taking on life-insurance protections, you see people taking on more cyber-risk protections as a consequence of what’s going on in Ukraine,” he added.
UBS Sees Clouds Clearing in the Next Three Months (9:15 a.m.)
UBS CEO Hamers said that he expects to see more clarity in global markets within the next three months as clients digest the fallout from recent geopolitical events. “We had to digest three major shocks: the pandemic shock, the war shock and the energy-transition shock,” he said. “Supply shocks and demand shocks all mixed in one.”
Wealthy clients, he said, aren’t panicking. They are staying invested, though not necessarily putting new money into the market. “I’m not sure they’re worried about what’s coming,” Hamers said. “It’s just they don’t know what’s coming.”
Unilever Sees Commercial Rationale for ESG Moves (9:15 a.m.)
Investors are exhorting us to put sustainability and ESG at the heart of our business model and that’s for hard commercial purposes, said Unilever CEO Alan Jope, citing consumer demand, cost efficiencies and the ability to attract top talent.
But a lack of clear, harmonized metrics is a major challenge. “We are in danger of letting perfect get in the way of good, of letting complex get in the way of simple, and of local getting in the way of the global,” he said.
BofA’s Moynihan Understands Musk’s ESG Frustration (9:05 a.m.)
Bank of America CEO Brian Moynihan said that he can “understand the frustration” of Tesla Inc.’s Elon Musk over ESG metrics that penalize companies for historical or obscure reasons.
Speaking on a panel, Moynihan said his bank faced similar issues with old acquisitions that had overhanging litigation, for example, despite a broader commitment to investors to meet ESG standards. He was responding to a question about Musk’s recent tweet calling ESG an “outrageous scam.”
Unilever’s Jope chimed into the debate, saying “Elon can relax.” Tesla could be “at the top of the pack” at one of the ESG ratings agencies, he said on the same panel. But we shouldn’t be able to “pick and choose” the standards, he added.
Recession Not ECB Baseline, Lagarde Says (9 a.m.)
Lagarde rejected the idea that the euro area is heading for a recession for the time being, while acknowledging the need to be “very attentive” to economic developments. “We don’t have that as a baseline,” she said.
“We are not in a panic mode,” she added. “We are now at a stage where there is every certainty that we will stop net assets purchases very early in July, deciding so in June, which will then clear the way for rate hikes that will come reasonably shortly after that.”
Lagarde: Monetary Policy at ‘Turning Point’ (8:50 a.m.)
Lagarde said she decided to set out the future path of monetary policy in a blog post on Monday in part to address “expectations that were not necessarily founded.”
Read more: Lagarde’s Rate-Hike Plan Irks Some at ECB Who Want Faster Option
“We are clearly now at a turning point, and I thought it was appropriate at this point to explain what the journey is, what the direction of travel is, what the destination is in the relatively short term and what is our aim point as well,” Lagarde said in an interview with Bloomberg TV.
“I thought it was a good time given the combination of volatility that was out there, expectations that were not necessarily founded and the strong convergence that arose from the Governing Council due to the multiple positions as expressed during the last few days,” she added.
Top Polluters Face $67 Trillion Bill to Hit Climate Goal (8:45 a.m.)
The world’s seven-biggest polluters will have to spend $67 trillion by the end of this decade to stay on the path of achieving climate neutrality mid-century, according to a report from Polish Economic Institute that’s due to be presented in Davos on Tuesday.
The economies — China, the US, the EU, Brazil, India, Russia and Japan — are responsible for 70% of global greenhouse gas emissions. Their efforts are key for the world to meet the goals of the 2015 Paris Agreement to limit warming to “well below” 2 degrees Celsius above preindustrial levels.
With current investment pledges to green their economies, the EU will reach climate neutrality in 2056, followed by the US four years later and China only in 2071 — 11 years later than its target, according to the report. Russia won’t be able to reach climate neutrality until 2086.
Edelman CEO Praises More Intimate, ‘Less Cold’ Davos (7:25 a.m.)
Richard Edelman, chief executive officer of public-relations firm Edelman, said he was a fan of this year’s iteration of Davos saying its smaller scale was provoking better conversations.
“Davos has been actually great because its smaller, CEOs are really looking to talk,” Edelman said in a Bloomberg Television interview. Plus, he said, it is “less cold.”
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