US Business

Britain’s government said Thursday it was preparing to enlist the army to cover ambulances and border security ahead of a wave of strikes this month by workers demanding higher wages.

Interior minister Suella Braverman warned the public against flying over Christmas, after passport control officers voted to walk out.

“If they go ahead with those strikes there will be undeniable, serious disruption caused to many thousands of people who have holiday plans,” Braverman told reporters.

The Border Force agency is training 2,000 soldiers to back up its personnel, officials said.

The Ministry of Defence is also in talks with the National Health Service, Downing Street said, after ambulance drivers voted to join nurses in striking this month.

The passport control staff and ambulance drivers have joined many sectors who have opted for strike action this year as decades-high inflation erodes the value of earnings.

– ‘Rolling strikes’ –

“These sorts of rolling strikes will cause disruption for everyone,” Prime Minister Rishi Sunak’s spokesman told reporters, reiterating the government’s opposition to inflation-busting pay deals.

“And that does also include our military personnel who will be required, unfortunately, to have to step in and backfill some of these vital roles that we need to help keep the country moving.”

Sunak on Wednesday hinted that ministers were preparing new legislation to outlaw strikes in critical sectors.

Currently, only Britain’s police, military and prison guards are barred by law from striking.

“What we’re looking at is, are there other areas that we should include in that?” Education Secretary Gillian Keegan told BBC radio Thursday.

“Health would be one to look at and other areas of critical infrastructure,” she added.

The government has yet to look at banning strikes by teachers, who have gone on strike in Scotland and are being balloted in England and Wales, she said.

– ‘Christmas chaos’ –

Ahead of a new wave of train strikes beginning next week, rail union leaders said the government had blocked a deal to end their long-running dispute over pay and other conditions.

“Rail workers and the industry have been put in an impossible position by the Tory government,” Frank Ward, interim general secretary at transport union TSSA, said Thursday.

“Christmas chaos and disruption across our railways are now unfortunately guaranteed, and come gift wrapped from Rishi Sunak and his anti-worker Conservative government’s agenda.”

The government is pushing through a law to require a minimum service on the railways and has refused to rule out expanding that bill to encompass other public sectors.

But Britain faces a winter of discontent as strikes multiply in the face of spiralling consumer prices. Many travellers will struggle to get home for Christmas as transport staff walk out.

Airports, buses, railways and roads face potential gridlock as a result of strikes, which will also hit Eurostar services.

And Britons face chronic delays to Christmas cards and parcels as walkouts continue to blight postal operator Royal Mail.

Nurses will also walk out next week for the first time in their union’s 106-year history.

– Cost-of-living crisis –

British inflation stands above 11 percent, the highest level in more than 40 years.

“I don’t think those going on strike want strikes and disruption,” Keir Starmer, the leader of Britain’s main opposition Labour party, said Thursday.

“They are facing a very real cost-of-living crisis, they are struggling to pay their bills,” he told business leaders.

The Financial Times estimates that more than one million working days will be lost to industrial action in December.

Analysts however talked down the overall economic impact.

“While the strikes feel quite widespread, in practice only a small share of the workforce will be on strike at the same time,” noted Paul Dales at research consultancy Capital Economics.

He conceded however that “any hit” to economic activity “is not helpful when the economy is probably already in recession”.

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Chinese President Xi Jinping and Saudi Arabia’s powerful crown prince met Thursday on an Arab outreach visit that has earned a rebuke from Washington, reaching deals in areas including energy and infrastructure. 

Agreements worth about $30 billion were being signed on Thursday, Saudi state media said, as China seeks to shore up its Covid-hit economy and as the Saudis, long-term US allies, push to diversify their economic and political alliances. 

Xi and Crown Prince Mohammed bin Salman, the 37-year-old de facto ruler of the world’s biggest oil exporter, met at Yamamah Palace in Riyadh, flanked by high-ranking officials wearing face masks, footage aired on state television showed.

They oversaw the signing of energy agreements on hydrogen as well as a plan to “harmonise” Saudi Arabia’s ambitious economic reform agenda, Vision 2030, with China’s trillion-dollar Belt and Road Initiative, the official Saudi Press Agency said. 

The signed deals also covered a petrochemicals project, housing development and the teaching of the Chinese language, SPA said, though it did not detail their substance or monetary value.

Earlier, state television showed Xi being greeted with a handshake by Prince Mohammed before the two men stood side-by-side as a brass band played their countries’ national anthems. 

They then chatted while walking into the palace, which is the king’s official residence and seat of the royal court. 

Xi also met with Prince Mohammed’s father, 86-year-old King Salman, signing a comprehensive strategic partnership agreement first reached during Xi’s last visit in 2016, state media reported. 

They “agreed to hold a heads of state meeting between the two countries in turn every two years”, Chinese state media said.

“I am very pleased to visit Saudi Arabia again after six years. I still remember the scenes from my last visit,” Xi said in remarks carried by Chinese state broadcaster CCTV.

“The Chinese side views the Saudi side as an important force in a multipolar world and attaches high importance to developing a comprehensive strategic partnership with Saudi Arabia.”

– ‘Raising pace’ of cooperation –

Upon his arrival on Wednesday, Xi said bilateral ties with Saudi Arabia had grown “by leaps and bounds” in recent years. 

This “has not only enriched both countries’ peoples but promoted regional peace, security, prosperity and development,” Xi said, according to CCTV.

The crown prince sees China as a critical partner in his sweeping Vision 2030 agenda, seeking the involvement of Chinese firms in ambitious mega-projects meant to diversify the economy away from fossil fuels. 

Saudi investment minister Khalid al-Falih said this week’s visit “will contribute to raising the pace of economic and investment cooperation between the two countries”, offering Chinese companies and investors “rewarding returns”, according to SPA.

Earlier on Thursday, Saudi state media announced 34 investment agreements in sectors including green hydrogen, information technology, transport and construction.

State broadcaster Al-Ekhbariya said another 20 agreements worth 110 billion riyals ($29.3 billion) were due to be signed.

– Arab outreach –

Arab leaders began Thursday to converge on the Saudi capital ahead of summit meetings with Xi, the leader of the world’s number-two economy, who will hold separate talks with the six-member Gulf Cooperation Council before leaving on Friday.

China, the top consumer of Saudi oil, has been strengthening ties with a region that has long relied on the United States for military protection but which has voiced concerns the American presence could be downgraded.

Egyptian President Abdel Fattah al-Sisi, Palestinian president Mahmud Abbas and Sudan’s de facto leader Abdel Fattah al-Burhan had all arrived by Thursday afternoon, according to the Saudi foreign ministry.

Tunisian President Kais Saied, Iraqi Prime Minister Mohammed Shia al-Sudani, Moroccan Prime Minister Aziz Akhannouch and Lebanese caretaker Prime Minister Najib Mikati have also confirmed their attendance.

Beijing’s foreign ministry this week described Xi’s trip as the “largest-scale diplomatic activity between China and the Arab world” since the People’s Republic of China was founded. 

It has not escaped the attention of the White House, which warned of “the influence that China is trying to grow around the world”, calling its objectives “not conducive to preserving the international rules based order”. 

Washington has long been a close partner of Riyadh, but the relationship is currently roiled by disagreements on energy policy, US security guarantees and human rights. 

Xi is making his third journey overseas since the Covid pandemic prompted China to shut its borders and embark on a series of lockdowns, putting the brakes on its giant economy.

His visit follows US President Joe Biden’s trip in July, when he greeted Prince Mohammed with a fist-bump at the start of a vain attempt to convince the Saudis to raise oil production.

Wall Street stocks attempted to stage a relief rally and Hong Kong soared on Thursday, but elsewhere equity trading was still dominated by recession fears.

Oil prices, meanwhile, rebounded slightly from recent sharp losses.

Equity markets had been rising ahead of US jobs figures last week, boosted by a surprise drop in inflation and comments from Federal Reserve boss Jerome Powell that the bank was likely to raise rates at a slower pace.

But robust jobs figures and a jump in wages, plus data on Monday showing a forecast-busting jump in activity in the US services sector last month, raised the prospect that the Fed will not back down from sharp rate increases when it meets next week.

Following several days of losses, Wall Street opened to the upside, with the Dow rising 0.4 percent.

“What we have today, then, is a little rebound spirit — an assumption that the stock market is due for a bounce after behaving so poorly in more recent action…” said market analyst Patrick O’Hare at Briefing.com.

European stocks tried to rally before Wall Street opened, but failed to hold onto gains. London was flat, while both Frankfurt and Paris were down 0.2 percent as trading got underway in New York.

“The risk-off sentiment… remains hard to kick into touch as concerns about recession stay front and centre,” noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“The evil twins of recession and persistently higher inflation are lurking, keeping investors on edge.”

Analysts pointed out that two-year US Treasury yields were much higher than those of 10-year bonds, which is usually considered a clear indication of a looming recession.

This week also saw the heads of some of Wall Street’s biggest banks warn of a downturn.

– China Covid shift –

The fear of a US recession is playing off against China’s shift away from its zero-Covid strategy of lockdowns and mass testing that has been blamed for clattering the world’s number two economy.

After widespread protests last month against the strict measures and calls for more political freedoms, authorities have scaled back many of them and on Wednesday announced a nationwide loosening of restrictions.

While there are worries that the more liberal approach will spark a surge in infections, it has helped fan a rally in Hong Kong where Chinese tech firms and property developers are listed.

The Hang Seng Index closed up more than three percent Thursday.

“Developments in China have a big role to play, although as we’re seeing once again, Covid-related moves are almost exclusively impacting stocks in domestic markets,” said Craig Erlam, senior analyst at OANDA trading group. 

“We can see that again overnight, with reports of looser mask and isolation requirements in Hong Kong lifting the Hang Seng and making it the clear outperformer in the region, while most other indices tread water.”

– Key figures around 1430 GMT –

New York – Dow: UP 0.4 percent at 33,715.24 points

London – FTSE 100: FLAT at 7,487.53 

Frankfurt – DAX: DOWN 0.2 percent at 14,231.57

Paris – CAC 40: DOWN 0.2 percent at 6,646.81

EURO STOXX 50: DOWN 0.2 percent at 3,913.49

Tokyo – Nikkei 225: DOWN 0.4 percent at 27,574.43 (close)

Hong Kong – Hang Seng Index: UP 3.4 percent at 19,450.23 (close)

Shanghai – Composite: DOWN 0.1 percent at 3,197.35 (close)

Euro/dollar: UP at $1.0531 from $1.0510 on Wednesday

Dollar/yen: UP at 136.62 yen from 136.57 yen

Pound/dollar: UP at $1.2212 from $1.2209

Euro/pound: UP at 86.21 pence from 86.05 pence

Brent North Sea crude: UP 1.6 percent at $78.40 per barrel

West Texas Intermediate: UP 2.8 percent at $74.04 per barrel

Britain on Thursday said it was preparing to enlist the army to cover ambulances and border security before a wave of strikes this month as workers demand higher wages.

Home Secretary Suella Braverman warned the public against flying over Christmas, after passport control officers voted to walk out, joining many sectors which have gone on strike this year as decades-high inflation erodes the value of earnings.

“If they go ahead with those strikes there will be undeniable, serious disruption caused to many thousands of people who have holiday plans,” she told reporters.

The Border Force agency is training 2,000 soldiers to back up its personnel, officials said.

The Ministry of Defence is also in talks with the National Health Service, Downing Street said, after ambulance drivers voted to join nurses in going on strike this month.

“These sorts of rolling strikes will cause disruption for everyone,” Prime Minister Rishi Sunak’s spokesman told reporters, reiterating the government’s refusal to countenance inflation-busting pay deals.

“And that does also include our military personnel who will be required, unfortunately, to have to step in and backfill some of these vital roles that we need to help keep the country moving.” 

Sunak on Wednesday hinted that ministers were preparing new legislation to outlaw strikes in critical sectors.

Currently, only Britain’s police, military and prison guards are barred by law from striking.

“What we’re looking at is, are there other areas that we should include in that?” Education Secretary Gillian Keegan told BBC radio Thursday.

“Health would be one to look at and other areas of critical infrastructure,” she said, while adding that the government had yet to look at banning strikes by teachers, who have gone on strike in Scotland.

– ‘Christmas chaos’ –

Ahead of a new wave of train strikes beginning next week, rail union leaders claimed the government blocked a deal to end their long-running dispute over pay and other conditions.

“Rail workers and the industry have been put in an impossible position by the Tory government,” Frank Ward, interim general secretary at transport union TSSA, said Thursday. 

“Christmas chaos and disruption across our railways are now unfortunately guaranteed, and come gift wrapped from Rishi Sunak and his anti-worker Conservative government’s agenda.”

The government is pushing through a law to require a “minimum service” on the railways and has refused to rule out expanding that bill to encompass other public sectors.

The biggest UK strikes in 2022 have involved tens of thousands of railway and postal workers.

British inflation stands above 11 percent, the highest level in more than 40 years.

“I don’t think those going on strike want strikes and disruption,” Keir Starmer, the leader of Britain’s main opposition Labour party, said Thursday.

“They are facing a very real cost of living crisis, they are struggling to pay their bills,” he told business leaders.

Wirecard’s ex-CEO Markus Braun and two former executives went on trial in Munich on Thursday charged with fraud over their involvement in Germany’s biggest-ever accounting scandal.

The trial in Munich comes two and a half years after digital payments firm Wirecard collapsed in spectacular fashion after admitting that 1.9 billion euros ($2 billion) missing from its accounts did not actually exist.

Chancellor Olaf Scholz, who was finance minister at the time of Wirecard’s implosion, described the scandal as “unparalleled” in Germany’s post-war history.

The keenly anticipated trial is being held in a high-security courtroom inside Munich’s sprawling Stadelheim prison complex.

Austrian-born Braun, who has been in custody since July 2020, appeared in court wearing his trademark black turtleneck under a suit jacket. 

The 53-year-old spoke only to confirm his personal details, and appeared to listen intently as prosecutors then read out the 90-page indictment. 

His lawyer is due to give a statement later in the day.

– Fugitive COO –

Braun faces charges of commercial gang fraud, breach of trust, false accounting and market manipulation.

He denies the allegations and claims to be a victim of the fraud, painting Wirecard’s fugitive former chief operating officer Jan Marsalek as the mastermind.

Marsalek, a shadowy figure with ties to foreign intelligence services, evaded arrest in 2020 by staging a daring escape from Austria by private jet. 

He was reported earlier this year to be hiding out in Russia.

Braun’s co-defendants are ex-accounting boss Stephan von Erffa and Oliver Bellenhaus, the former head of Wirecard’s Dubai subsidiary.

Bellenhaus has admitted wrongdoing and will act as a key witness for the prosecution.

If found guilty, the trio risk lengthy prison sentences.

But Bellenhaus’s lawyer, Florian Eder, told reporters he expected “a significantly reduced sentence” for his client given his cooperation with authorities.

The court has scheduled 100 trial dates for the complex case.

– Fake transactions –

The prosecution’s case centres around the claim that Wirecard executives inflated the company’s earnings, starting at least as far back as 2015, by inventing revenue streams from transactions with a web of partner companies.

These so-called Third Party Acquirer (TPA) companies in Dubai, the Philippines and Singapore accounted for a huge chunk of Wirecard’s sales and profits according to its books.

But “all the accused knew” that the revenues from these TPA businesses “didn’t exist”, the indictment reads, adding that the defendants used forged documents to hide the trickery.

The goal was “to increase the company’s financial strength and make it more attractive to investors and customers”, prosecutors allege.

Founded in 1999 as an outfit processing credit card payments for porn and gambling websites, Wirecard rose to become a respectable player in the booming “fintech” (financial technology) sector.

A favourite with investors, it entered Germany’s blue-chip DAX index in 2018 and at its peak was valued at more than 24 billion euros, outweighing giant Deutsche Bank.

Despite occasional speculation of wrongdoing at the company, Wirecard continued its meteoric rise.

– FT investigation –

But its troubles began in earnest in 2019 when the Financial Times published a series of explosive articles detailing accounting irregularities.

The scam finally unravelled when long-time auditor EY uncovered a 1.9-billion-euro hole in its accounts in June 2020.

The cash, which made up a quarter of Wirecard’s balance sheet, was meant to be sitting in trustee accounts at two banks in the Philippines.

But the Philippines’ central bank has said the cash never entered its monetary system and both Asian banks, BDO and BPI, denied having a relationship with Wirecard.

Wirecard’s share price tanked and it filed for insolvency soon after, leaving behind three billion euros in debt that creditors are unlikely to recover.

The company’s downfall sent shockwaves through Germany and prompted an overhaul of finance watchdog Bafin, which was heavily criticised for ignoring early warnings about Wirecard.

“The Wirecard scandal has damaged Germany’s reputation as a financial centre,” said Volker Bruehl, a professor at the Center for Financial Studies in Frankfurt.

The first coins bearing the likeness of Britain’s King Charles III entered circulation Thursday, The Royal Mint announced.

The new 50 pence (60 US cent) piece features an effigy of Charles, who became king after the death of his mother Queen Elizabeth II in September.

The Royal Mint, official producer of UK banknotes and coins, is initially releasing 4.9 million of the coins via transactions made at the country’s postal offices.

Millions more will eventually enter use, with Charles’s head featuring on all denominations.

The effigy is the work of British sculptor Martin Jennings and was personally approved by the king.

Charles’s head faces left, in line with a tradition that the new monarch looks the opposite way to their predecessor.

The reverse side celebrates the life and legacy of Elizabeth, using the coin design for her coronation in 1953.

The coronation of Charles takes place on May 6.