AFP

The European Central Bank on Thursday stood still in the face of record inflation, keeping its stimulus plans and rates unchanged, as the war in Ukraine cast a pall over the eurozone economy.

Meeting for the second time since the outbreak of the conflict, the bank’s 25-member governing council stuck to a plan that “should” see its bond-buying scheme come to an end in the third quarter, it said. 

An interest rate hike would follow “some time” after the stimulus programme comes to an end — a delay the ECB’s President Christine Lagarde stressed could be “between a week and several months” — while any increases “will be gradual”.

The decision leaves the ECB further out of step with many of its peers. 

Central banks such as the Bank of England, US Federal Reserve and the Bank of Canada have already triggered their first interest rate rises in response to soaring inflation.

Calls for the ECB to follow suit as soon as possible from within the governing council have grown stronger as price rises in the eurozone have taken off. 

Year-on-year inflation hit 7.5 percent in March, an all-time high for the currency bloc and well above the bank’s own two-percent target.

The surge owes a great deal to the take off in prices for energy, commodities and food as a result of Russia’s invasion of Ukraine. 

At the same time, high energy costs, added disruptions to supply chains and weaker confidence were “severely affecting” the eurozone economy, Lagarde said in a press conference.

The former French finance minister is still testing positive for Covid and had to dial into the press conference via video link.

– ‘Europe is different’ –

The outbreak of the war and the unexpected bound in prices dealt a blow to the ECB’s best-laid plans. 

Lagarde conceded that the bank’s forecasts had been “wrong in the past”, as calls increased for the banks to get out ahead of the inflation wave by raising interest rates.

Minutes from the last ECB meeting in March revealed that many members of the governing council wanted “immediate further steps”.

Central bankers use rate rises as a tool to try and tame inflation, but pulling the trigger too soon risks hurting economic growth.

Any hike would be the ECB’s first in over a decade and would lift rates from their current historic low levels.

The Frankfurt-based institution even set a negative deposit rate of minus 0.5 percent, meaning banks pay to park excess cash at the ECB.

The ECB’s straightforward reiteration of its stimulus planned showed a “somewhat strengthened” commitment to end its bond-buying scheme in the third quarter, said Carsten Brzeski, head of macro at ING bank.

But the status quo stance showed that “Europe is different and the ECB is different” to other countries and central banks, Brzeski said.

The ECB’s gradual plan would see it put an “end to the era of negative interest rates before the end of the year”, he predicted.

– Gas boycott –

Comparing the eurozone with the United States and the policies of the Fed was like “apples and oranges”, Lagarde said.

Just as the risks from the pandemic “have declined”, the European economy will “be more exposed and will suffer more consequences” from the war in Ukraine, she said.

The impact “will depend on how the conflict evolves, on the effect of current sanctions and on possible further measures,” Lagarde said.

Looming over the outlook was the possibility of stop to supplies of Russian gas, which many eurozone countries rely on heavily on the fuel to match their energy needs.

“An abrupt boycott would have a significant impact,” Lagarde said.

While the ECB’s bond-buying stimulus is being phased out, the advent of a fresh crisis has some speculating about the possibility of the bank designing a new tool to contain the impact of the war.

Questioned on the subject, Lagarde simply said the ECB would stay flexible and act “promptly” if new risks emerged and some countries found it harder to finance their response.

Cash-strapped Sri Lanka’s loss-making national carrier revealed plans Thursday to lease up to 21 aircraft, just two days after the government announced a default on its $51 billion foreign debt.

The island nation is in the grip of its most painful economic downturn since independence in 1948, with severe shortages of essential goods and regular blackouts causing widespread misery. 

Huge protests have called for the resignation of the government, which has begged Sri Lankans abroad to send cash home to help pay for essential imports.

Despite the crisis, state-owned Sri Lankan Airlines has unveiled plans to expand its fleet from 24 to 35 planes in the next three years and replace some of its ageing jets.

“Sri Lankan Airlines has issued four requests for proposal to lease up to 21 aircraft to support its long-term business strategy,” it said in a brief statement.

The announcement came after the government suspended repayment of all its foreign borrowings, ahead of negotiations for a debt restructure with the International Monetary Fund next week.

The national carrier did not say how it planned to finance the leases, with its balance sheet showing a $1.7 billion debt and a carried forward loss of $1.56 billion in March 2020. 

It also came the same day international ratings agency Fitch downgraded $175 million in bonds issued by the airline from C to CC, suggesting the carrier was “near default”.

Fitch said the airline’s new rating, on debt due in June 2024, was in line with Sri Lanka’s default announcement.

The IMF has repeatedly urged Sri Lanka to privatise the airline, saying it was a white elephant the country cannot afford.

The airline was profitable before the government cancelled a management agreement with Emirates of Dubai in 2008, following a personal dispute with current Prime Minister Mahinda Rajapaksa.

The carrier had refused to bump fare-paying passengers and give their seats to members of Rajapaksa’s family, who were returning from a holiday in London.

Rajapaksa removed the Emirates-appointed chief executive of Sri Lankan Airlines and made his brother-in-law Nishantha Wickremasinghe head of the company.

An earlier plan to lease eight Airbus A350 jets during Rajapaksa’s tenure is subject to an ongoing criminal investigation. 

The airline’s then-chief executive Kapila Chandrasena and his wife were arrested two years ago after an international investigation found they received at least $2 million in kickbacks over the order. 

Turkey’s central bank on Thursday brushed aside an inflation reading that has soared past 60 percent and kept its benchmark interest rate steady for the fourth month in a row.

The widely-anticipated decision reflects President Recep Tayyip Erdogan’s unorthodox conviction that high interest rates cause inflation rather than slow it down.

But it means that Turkey will continue to rely on expensive economic support measures that could further deplete state coffers and inhibit foreign investors from returning to the once-promising emerging market.

“It would probably take the emergence of severe strains in the banking sector to bring an interest rate hike on to the agenda,” analyst Jason Tuvey of Capital Economics remarked.

The central bank said its decision to hold the main interest rate at 14 percent was driven by expectations of the “disinflation process” starting soon.

Russia’s invasion of Ukraine and the aftereffects of the coronavirus pandemic have sparked energy price spikes and production bottlenecks that pushed US and European cost of living increases to their highest levels in more than 20 years.

But Turkey’s annual inflation rate of 61.1 percent — the highest since Erdogan’s ruling party stormed to power in 2002 — is largely disconnected from most global factors.

Turkey entered an economic tailspin when Erdogan put pressure on the nominally independent central bank to start slashing interest rates last year.

The powerful Turkish leader believes relatively cheap borrowing costs will propel the economy to sustainable growth that supports long-term employment and helps his re-election chances next year.

But the policy pushed people’s return on bank deposits far below the rate at which the lira was losing value against the dollar.

That forced Turks to start converting their liras into dollars at an even greater pace.

The Turkish currency lost 44 percent of its value against the dollar last year and another nine percent since the start of January.

Erdogan’s government has responded by using state banks to buy up liras in a bid to cut the currency’s losses.

The government has also forced exporters to sell a quarter of their foreign currency earnings to the central bank to help buffer its reserves.

Turkish media reported this week that this rate could soon be raised to at least 40 percent.

Erdogan has also shifted Turkey’s geopolitical alignment and tried to reform broken alliances with cash-rich Gulf states.

“Erdogan strategy is I think clear — try and make friends with everyone internationally so as to secure bilateral external financing to sustain the current FX/rates mix until elections by June 2023,” analyst Timothy Ash of BlueBay Asset Management said.

Tesla chief Elon Musk has launched a hostile takeover bid for Twitter, insisting it was a “best and final offer” and that he was the only person capable of unlocking the full potential of the platform.

Musk offered $54.20 a share, which values the social media firm at $43.4 billion, in a filing dated Wednesday April 13 with the Securities and Exchange Commission.

Twitter’s board said it would carefully review what it termed Musk’s “unsolicited, non-binding” offer and decide on a course of action that was “in the best interest of the Company and all Twitter stockholders.”

Musk’s latest move toward Twitter comes just days after he turned down a seat on the board following his acquisition of a 9.2 percent stake in the microblogging platform.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in his filing.

“However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form,” he said.

“Twitter needs to be transformed as a private company. As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter.”

– ‘Popcorn time’ –

Musk, Twitter’s biggest shareholder, said his “offer is my best and final offer” and he would reconsider his position as a shareholder if it was rejected.

“Twitter has extraordinary potential. I will unlock it,” he said.

Wedbush analysts said the Twitter board would likely be forced to accept the bid or seek another buyer. 

“It’s get out the popcorn time as we expect many twists and turns in the weeks ahead as Twitter and Musk walk down this marriage path,” the analysis said, with a host of questions likely to swirl around issues of financing, regulatory aspects and balancing Musk’s time between his many companies.

Currently the world’s richest man, and with more than 80 million followers on the microblogging platform, Musk last week disclosed a purchase of 73.5 million shares — or 9.2 percent — of Twitter’s common stock. His announcement sent Twitter shares soaring more than 25 percent.

He was offered a seat on the board but turned it down at the weekend.

Musk’s move comes after he tweeted Saturday asking whether the social media network was “dying” and to call out users such as singer Justin Bieber, who are highly followed but rarely post.

“Most of these ‘top’ accounts tweet rarely and post very little content,” the Tesla boss wrote, captioning a list of the 10 profiles with the most followers — which includes himself at number eight, with 81 million followers.

In other weekend tweets, Musk posted joke polls on whether to drop the “w” from Twitter’s name and on converting its San Francisco headquarters to a homeless shelter “since no one shows up anyway.”

He also suggested removing ads, Twitter’s main source of revenue.

The billionaire tech entrepreneur is a frequent Twitter user, regularly mixing in inflammatory and controversial statements about issues or other public figures with remarks that are whimsical or business-focused. 

He has also sparred repeatedly with federal securities regulators, who cracked down on his social media use after a purported effort to take Tesla private in 2018 fell apart.

A huge crane ship was left listing outside the harbour of Stavanger in southwestern Norway on Thursday after a steel wire snapped during a loading operation, police said.

The Saipem 7000, operated by Italian oil services company Saipem, ended up tilting sharply, according to witness photos released by the Norwegian media, but no injuries were reported among the 275-strong crew.

The huge specialised vessel, which police say suffered significant material damage, was brought upright according to live footage from public broadcaster NRK.

The accident occurred during a lift at around 10 am (0800 GMT) in a fjord adjacent to Stavanger, a hub of Norway’s offshore oil industry, police said.

“A steel wire snapped during a loading operation,” Brit Randulff, police superintendent, told AFP.

“Witnesses heard a loud bang, but there was no indication of an explosion,” she added when asked about initial media reports mentioning an explosion.

“No people were hurt, but there was damage to the ship and there is a barge that tipped over and is floating upside down,” Randulff said.

Built in Italy in the 1980s, the specialised vessel, one of the largest in the world, can be partially submerged to lay pipelines and lines for the oil industry.

Pakistan’s new Prime Minister Shehbaz Sharif said Thursday the country’s economy had stagnated under his predecessor Imran Khan, setting the tone for possibly months of bitterness before an election that must be held by October next year.

Sharif, sworn in Monday after Khan was ousted by a no-confidence vote in parliament, is still finalising his cabinet but has called for “Pakistan speed” to hurry along development projects and fix the economy.

On Thursday the 70-year-old notorious workaholic visited a metro bus project in Rawalpindi and complained about the pace of infrastructure development.

“Almost all sectors of economy remained stagnant under IK,” he later tweeted, referring to his predecessor by his initials.

His early-morning visit came after Khan on Wednesday night held a huge rally in Peshawar.

Khan — along with most of his Pakistan Tehreek-e-Insaf (PTI) lawmakers — quit the national assembly after losing Sunday’s no-confidence vote, saying he would take his fight to the people to press for an early election.

On Wednesday, Khan said he would stage twice-weekly rallies across the country until a new poll date was set.

“Young people, get ready, I will take to the streets with you. I will go out in every city, and I will continue to go out until they are forced to hold election.”

Sharif, younger brother of three-time prime minister Nawaz Sharif, set out his stall on Tuesday by ordering the government to adopt a six-day work-week, instead of the previous five, and bringing forward office opening hours to 8 am from 10 am.

His “Pakistan speed” policy is an extension of a similar programme he introduced as chief minister of Punjab, the country’s most populous province, where he was credited with launching a series of high-profile — and vote-catching — projects.

– Broken economy –

The government would take unspecified “emergency measures” to stabilise the economy, Sharif’s office said later, focusing on steps to improve the condition of ordinary people.

Sharif inherits crippling national debt, galloping inflation and a feeble rupee — although analysts say Khan also took over a broken economy in 2018 that was further battered by the Covid-19 pandemic.

Khan’s ouster heralds the return of two dynastic parties that have dominated Pakistan politics for decades.

Sharif’s centrist Pakistan Muslim League-N (PML-N) joined forces with the centre-left Pakistan Peoples Party (PPP) — fiefdom of the Bhutto family — to press the no-confidence vote.

Khan tried everything to stay in power after losing his majority in parliament through defections by his own lawmakers and a coalition partner — including dissolving the assembly and calling a fresh election.

But the Supreme Court deemed all his actions illegal and ordered them to reconvene and vote.

On Thursday Pakistan’s military insisted it played no role in the PM’s ousting, although the head of its public relations wing said Khan had consulted them on his options.

There have been four coups since Pakistan attained independence in 1947 and the country has spent more than three decades under army rule.

“All what happened in recent days was part of a political process,” Major-General Babar Iftikhar told a press conference, urging parties “not to drag the army into politics”.

Khan insists he has been the victim of a “regime change” conspiracy involving Washington and his opponents, and vowed to take his fight to the streets in the hope of forcing an early election.

On Wednesday night Khan told thousands of supporters that the new government was “imported”, saying Pakistan needed to forge an independent global path.

He has said Washington wanted him removed because he refused to take sides in the Russia-Ukraine conflict, and because of his close links to China.

Washington, Moscow and Beijing have all congratulated Sharif since he took over.

Life usually stops in Sri Lanka’s capital during April’s holiday period, but with an economic crisis derailing traditional home celebrations, Colombo’s city centre is instead teeming with frustrated crowds.

Sri Lankans ritually boil milk on the first day of the island nation’s New Year, but the commodity is one of many in short supply — along with the liquid gas and kerosene used to heat stoves in many Colombo households, and rice to serve family members.

Demonstrators this year brought the custom out of their homes and heated clay pots over makeshift bonfires outside the capital’s Presidential Secretariat, highlighting the plight of households now forced to cook with firewood.

The seafront park by the neoclassical office has since the weekend hosted a running protest vigil, demanding the government’s resignation over Sri Lanka’s worst financial crisis in memory. 

“The economic situation is unbearable for many people,” Hemakumara Perera, who joined the protest from a small town south of the capital, told AFP. 

Perera, his wife and two children camped at the site overnight to “show solidarity” with fellow Sri Lankans suffering through what is usually a joyous family celebration. 

“We support their call for the president and the prime minister to step down,” he said. 

Other New Year customs have been abandoned, such as the buying of new garments to symbolise fresh beginnings.

“We are not in a mood to wear new clothes and celebrate when we know how people are suffering,” said Lakshika Gunawardena, who joined the protest carrying her five-month-old baby. 

– ‘We can’t go’ –

Sri Lanka’s New Year is usually a private affair, with families sharing meals at home and giving sweets to neighbours as commercial activity comes to a standstill.

The crowds now thronging public spaces are an unusual sight for this time of year — as is the silence from the country’s besieged leaders. 

The government skipped its usual handout photographs of top politicians celebrating the occasion with their families. 

And there was no sign of a text message holiday greeting from Prime Minister Mahinda Rajapaksa, sent to every mobile phone in the country in previous years.

Both he and younger brother Gotabaya Rajapaksa — Sri Lanka’s president — have been accused of mismanaging the economy and blindly leading the country into its present predicament. 

The country is now in default of its $51 billion foreign debt ahead of negotiations for an International Monetary Fund bailout, and authorities have begged Sri Lankans abroad to send money home to help alleviate the crisis.

The president has not returned to his office since the protest began on the weekend, and a bolstered security presence is keeping watch over the encampment. 

But interactions between police and the crowd were jovial and even festive, with demonstrators chatting to officers and sharing traditional New Year food and sweets.

“The demonstrators won’t go until the government goes,” said a traffic constable standing watch outside the building while sheltering from the scorching morning sun. 

“And we can’t go until both leave,” he added.

Pakistan’s new Prime Minister Shehbaz Sharif said Thursday the country’s economy had stagnated under his predecessor Imran Khan, setting the tone for possibly months of bitterness before an election that must be held by October next year.

Sharif, sworn in Monday after Khan was ousted by a no-confidence vote in parliament, is still finalising his cabinet but has called for “Pakistan speed” to hurry along development projects and fix the economy.

On Thursday the 70-year-old notorious workaholic visited a metro bus project in Rawalpindi and complained about the pace of infrastructure development.

“Almost all sectors of economy remained stagnant under IK,” he later tweeted, referring to his predecessor by his initials.

His early-morning visit came after Khan on Wednesday night held a huge rally in Peshawar.

Khan — along with most of his Pakistan Tehreek-e-Insaf (PTI) lawmakers — quit the national assembly after losing Sunday’s no-confidence vote, saying he would take his fight to the people to press for an early election.

On Wednesday, Khan said he would stage twice-weekly rallies across the country until a new poll date was set.

“Young people, get ready, I will take to the streets with you. I will go out in every city, and I will continue to go out until they are forced to hold election.”

– ‘Pakistan speed’ –

Sharif, younger brother of three-time prime minister Nawaz Sharif, set out his stall on Tuesday by ordering the government to adopt a six-day work-week, instead of the previous five, and bringing forward office opening hours to 8 am from 10 am.

His “Pakistan speed” policy is an extension of a similar programme he introduced as chief minister of Punjab, the country’s most populous province, where he was credited with launching a series of high-profile — and vote-catching — projects.

The government would take unspecified “emergency measures” to stabilise the economy, Sharif’s office said later, focusing on steps to improve the condition of ordinary people.

Sharif inherits crippling national debt, galloping inflation and a feeble rupee — although analysts say Khan also took over a broken economy in 2018 that was further battered by the Covid-19 pandemic.

Khan’s ouster heralds the return of two dynastic parties that have dominated Pakistan politics for decades.

Sharif’s centrist Pakistan Muslim League-N (PML-N) joined forces with the centre-left Pakistan Peoples Party (PPP) — fiefdom of the Bhutto family — to press the no-confidence vote.

Khan tried everything to stay in power after losing his majority in parliament through defections by his own lawmakers and a coalition partner — including dissolving the assembly and calling a fresh election.

But the Supreme Court deemed all his actions illegal and ordered them to reconvene and vote.

The cricketer-turned-politician insists he has been the victim of a “regime change” conspiracy involving Washington and his opponents, and vowed to take his fight to the streets in the hope of forcing an early election.

On Wednesday night Khan told thousands of supporters that the new government was “imported”, saying Pakistan needed to forge an independent global path.

He has said Washington wanted him removed because he refused to take sides in the Russia-Ukraine conflict, and also because of his close links to China.

Washington, Moscow and Beijing have all congratulated Sharif since he took over.