US Business

President Emmanuel Macron’s government on Wednesday sought to ram its 2023 budget through parliament without a vote after battling in vain to get it approved by the fractured lower house of parliament.

The administration is trying to lift the country out of an economic squeeze that has sparked industrial action and street protests.

But following weeks of disruption from strikes at oil refineries and fuel depots that have caused shortages at petrol pumps, the government waited until after Tuesday’s broader strike action and demonstrations before unveiling the controversial measure.

The walkouts have been just one of the challenges facing Macron in his second term in office.

The loss of his overall majority in June legislative polls meant he could not get enough deputies to approve the package.

“We need to give our country a budget,” Prime Minister Elisabeth Borne told lawmakers as she announced the use of clause 49.3 of the French constitution.

Under the clause, a law can be passed automatically unless the opposition passes its own vote of no confidence in the government.

“Every opposition party has confirmed their intention to reject the text,” but “the French are expecting… action and results from us,” she said, to boos from the opposition and applause from supporters.

Deputies from the left-wing NUPES alliance began leaving the chamber before Borne had finished speaking.

After promising an open debate, Macron’s camp in recent days suffered a series of defeats over the first of thousands of proposed amendments to its fiscal plans for next year.

– ‘Anti-democratic brutality’ –

Opposition lawmakers on Wednesday accused the government of wasting their time.

“Macronism has become a form of authoritarianism,” leading France Unbowed (LFI) deputy Mathilde Panot told reporters following Borne’s announcement.

“Parliament’s work has been swept away in a few hours,” said Greens representative Cyrielle Chatelain.

Both of them were among 151 NUPES lawmakers to sign a no-confidence motion against the government.

Such an “act of anti-democratic brutality… leads us to demand the censure of the government,” it read.

On the far right, the National Rally (RN) plans to file a no-confidence motion of its own on Thursday.

But with both the hard left and far-right unwilling to back each other’s motions, neither is likely to reach the required 289 votes.

Macron has already increased the pressure on deputies by vowing to dissolve parliament and call fresh elections if a no-confidence vote succeeds.

The leader of the conservative Republicans group Olivier Marleix, asked if he could back either of the motions, said it would be “useless to pile chaos on top of chaos”.

– ‘Live with it’ –

After the election setback this summer that cost Macron’s party his parliamentary majority, he and his ministers have promised to be more open to dialogue with the opposition and civil society than during his first five years as president.

But they have rejected allegations from lawmakers that the use of article 49.3 means abandoning those efforts.

The article means “the government has the ability to force the adoption of a bill when in fact the opposition can live with it”, Francois Bayrou, leader of the Democratic Movement party allied to Macron, told broadcaster France Inter.

With the passage of the budget all but assured, lawmakers had been left wondering which of their hard-fought amendments might be left in, with the choice entirely up to ministers.

Borne said that “around 100” modifications, including some from the opposition, would be left in.

The budget “has been fed, complemented, amended, even corrected following the debates of recent days,” she told MPs.

One senior lawmaker told AFP that the changes, including tax breaks for childcare and for very small businesses, would cost up to 800 million euros ($782 million).

Finance Minister Bruno Le Maire has nevertheless warned Borne that he would not back changes that would blow holes in the budget, another person present at their Monday meeting said.

The James Webb Space Telescope captured the iconic “Pillars of Creation,” huge structures of gas and dust teeming with stars, NASA said Wednesday, and the image is as majestic as one could hope.

The twinkling of thousands of stars illuminates the telescope’s first shot of the gigantic gold, copper and brown columns standing in the midst of the cosmos.

At the ends of several pillars are bright red, lava-like spots. “These are ejections from stars that are still forming,” only a few hundred thousand years old, NASA said in a statement.

These “young stars periodically shoot out supersonic jets that collide with clouds of material, like these thick pillars,” the US space agency added.

The “Pillars of Creation” are located 6,500 light years from Earth, in the Eagle Nebula of our Milky Way galaxy.

The pillars were made famous by the Hubble Space Telescope, which first captured them in 1995 and then again in 2014.

But thanks to Webb’s infrared capabilities, the newer telescope — launched into space less than a year ago — can peer through the opacity of the pillars, revealing many new stars forming.

“By popular demand, we had to do the Pillars of Creation” with Webb, Klaus Pontoppidan, the science program manager at the Space Telescope Science Institute, said Wednesday on Twitter.

STScI operates Webb from Baltimore, Maryland.

“There are just so many stars!” Pontoppidan added.

NASA astrophysicist Amber Straughn summed it up: “The universe is beautiful!” she wrote on Twitter.

The image, covering an area of about eight light years, was taken by Webb’s primary imager NIRCam, which captures near-infrared wavelengths — invisible to the human eye.

The colors of the image have been “translated” into visible light.

According to NASA, the new image “will help researchers revamp their models of star formation by identifying far more precise counts of newly formed stars, along with the quantities of gas and dust in the region.”

Operational since July, Webb is the most powerful space telescope ever built, and has already unleashed a raft of unprecedented data. Scientists are hopeful it will herald a new era of discovery.

One of the main goals for the $10-billion telescope is to study the life cycle of stars. Another main research focus is on exoplanets, planets outside Earth’s solar system.

Major stock markets fluctuated Wednesday as investors tracked soaring inflation and positive earnings results.

In a sign of the uphill struggle in the battle against soaring prices, UK inflation jumped back above 10 percent last month.

London’s FTSE 100 shares index dipped 0.2 percent and the pound fell following the data — and as Britain’s under-fire Prime Minister Liz Truss faced a grilling in parliament.

Sentiment was also dampened “by a sharp rise in US yields, as well as the US dollar, after Minneapolis Fed President Neel Kashkari said that the Federal Reserve would be in no position to pause on rate rises if inflation was still rising, even with the Fed Funds rate at 4.5 percent,” said market analyst Michael Hewson.

Market movements have been dominated in recent months by interest rate hikes by the US Federal Reserve and other central banks as they try to rein in surging inflation.

Foreign exchange traders were keeping tabs also on whether the dollar would reach 150 yen, which would be a fresh high for 32 years.

Japan’s currency is being hit hard as the country’s central bank holds off from hiking interest rates, in sharp contrast to its peers.

Frankfurt and Paris stocks ended the day modestly lower.

While the Dow was up marginally in late morning trading, both the S&P 500 and tech-heavy Nasdaq Composite were lower. 

“Fortunately, some strength is also being seen in the stocks of several widely-held companies that reported earnings,” said Briefing.com analyst Patrick O’Hare.

Traders were given an extra boost by news that Netflix gained more than two million subscribers in July-September.

In Europe, Nestle’s nominal sales surged in the first nine months of the year as the maker of Nespresso capsules, Purina pet food and Haagen-Dazs ice cream raised its prices in response to soaring inflation.

Nestle’s shares ended the day down 1.3 percent, however, amid concerns about the impact of higher prices on sales volumes.

On commodity markets, crude oil prices rose on renewed supply worries.

They had slumped Tuesday on bets that US President Joe Biden would order the release of more barrels from the country’s emergency reserves in order to keep fuel prices subdued heading into mid-term elections.

– Key figures around 1530 GMT –

New York – Dow: UP less than 0.1 percent at 30,529.07 points

EURO STOXX 50: UP 0.2 percent at 3,471.24

London – FTSE 100: DOWN 0.2 percent at 6,924.99 (close)

Frankfurt – DAX: DOWN 0.2 percent at 12,741.41 (close)

Paris – CAC 40: DOWN 0.4 percent at 6,040.72 (close)

Tokyo – Nikkei 225: UP 0.4 percent at 27,257.38 (close)

Hong Kong – Hang Seng Index: DOWN 2.4 percent at 16,511.28 (close)

Shanghai – Composite: DOWN 1.2 percent at 3,044.38 (close)

Pound/dollar: DOWN at $1.1246 from $1.1332 on Tuesday

Dollar/yen: UP at 149.75 yen from 149.21 yen

Euro/dollar: DOWN at $0.9785 from $0.9862 

Euro/pound: DOWN at 86.98 pence from 87.01 pence

Brent North Sea crude: UP 0.9 percent at $90.83 per barrel

West Texas Intermediate: UP 0.8 percent at $83.46 per barrel

burs-rl/lcm

German carmaker BMW said Wednesday it will invest $1.7 billion in the production of electric vehicles in the United States. 

The plan includes $1 billion towards expanding the company’s Spartanburg US manufacturing plant and $700 million for a new battery assembly facility, BMW said in a statement.

“The BMW group continues the roll-out of its electromobility plan with a new investment in the US,” the company said.

The Spartanburg plant in South Carolina is already BMW’s biggest factory, producing 1,500 BMW X vehicles a day.

The new high-voltage battery assembly facility will be located in Woodruff, South Carolina, BMW said.

The German group has also signed an agreement with Chinese battery manufacturer Envision AESC, which will “build a new battery cell factory in South Carolina” with an annual capacity of up to 30 GWh.

The group plans to produce at least six fully electric BMW X models at the Spartanburg plant by 2030.

The aim is for the factory to become “a major driver for our electrification strategy”, said Oliver Zipse, chair of BMW’s management board.

The move is part of a shift towards electrification at BMW and in the German car industry as a whole.

BMW already sells the i3 model but it has nonetheless lost market share to Tesla.

The German luxury brand is aiming to have two million electric vehicles on the road by 2025, promising 13 new electric models and a revamp of its Mini series.

However, the new investment comes amid tensions over President Joe Biden’s landmark “Inflation Reduction Act”, which includes tax breaks for US-made electric cars and batteries.

European Union officials have said the policy could put e-cars made elsewhere at an unfair disadvantage. 

German Economy Minister Robert Habeck on Wednesday warned that the US plans “must not destroy the level playing field between our two economies” and called for “a strong answer from the European side”. 

Speaking after talks with his French counterpart Bruno Le Maire, Habeck said companies were being “drawn away from Europe to the United States because of the strong subsidies paid”.

The US is also an attractive potential production base for German manufacturers struggling with soaring energy costs in the fallout from Russia’s invasion of Ukraine.

Gas prices remain low in the United States thanks to abundant domestic production.

Partners, competitors or rivals? European Union leaders are debating whether to rethink their stance on China as President Xi Jinping tightens his grip over an ever more assertive Beijing. 

A two-day summit in Brussels from Thursday will be dominated by the fallout of Russia’s war on Ukraine and Europe’s soaring energy prices, but ties with the world’s second-largest economy will also loom. 

“In the light of the current geo-political context, we need to hold a strategic discussion on China,” European Council chief Charles Michel wrote in his invitation. 

Leaders must establish “how we wish to frame this critical relationship in the future,” he added.

Torn between the desire to access China’s vast markets and condemnation of its rights abuses and aggressive regional policies, the 27-nation bloc has traditionally struggled to fashion a cohesive approach towards Beijing.

Keen to cover all bases, the EU has dubbed Beijing a “cooperation partner”, “economic competitor” and “systemic rival” all at the same time. 

Now some are arguing that approach needs to stiffen as Xi pushes a more confrontational line with the West as he stands on the cusp of securing a third five-year term at the Communist Party Congress. 

“The message that China is sending out today is a message of competition,” EU Foreign Policy chief Josep Borrell said after the bloc’s foreign ministers discussed the issue on Monday.

– Russia, Taiwan – 

EU-China relations have been tense since a major investment pact was put on ice last year after Beijing angrily hit back at sanctions over its treatment of the Uighur minority in Xinjiang. 

The EU’s diplomatic service this month circulated a strategy paper, seen by AFP, that looked to balance the need to “speak, work, trade and negotiate” against pushing back on Beijing. 

“Management of the EU-China relationship will be a key determinant of the EU’s future economic and geostrategic security,” it said. 

One key area of cooperation remains the fight against climate change as there is recognition that progress can’t be made without the globe’s largest polluter on board. 

But there are far more major areas of frustration and concern over Beijing’s stance. 

Many are worried by China’s warm ties with Moscow and angered at its failure to come out against the war in Ukraine. 

“China cannot just stay on the sidelines — it is the second global power,” said one European diplomat. 

“It has to play a role in protecting, preserving or at least trying to maintain the principles on which this world order is founded.”

Fears are also high over Beijing’s belligerent vows to “reunify” Taiwan and the EU foreign service has urged member states to warn China of “possible consequences” if it seeks to take control through force. 

– ‘Dependency’ trap –

Chastened by the chaos caused by its reliance on Russia for energy, the EU is keen to ensure it doesn’t fall into the same trap by becoming dependant on China for critical raw materials and technologies.

“Now we are talking about our dependency, vulnerability from Russian gas. We have to avoid creating new ones,” Borrell said. 

But that will be easier said than done. 

“China has just got its hands on the cobalt reserves of the Democratic Republic of Congo and holds 85 percent of the rare earths in the world,” said Elvire Fabry, an analyst for the Jacques Delors Institute.

Some within Europe have pushed for the bloc to side closer with the United States as successive administrations there take a far tougher line on confronting Beijing’s growing might. 

But others insist that the EU needs to tread its own path and not be too reliant on Washington. 

“We need to get out of these dependencies, not substitute them with other dependencies,” said another European diplomat.

One thing is clear, EU officials insist, the bloc must remain united in its stance towards Beijing. 

For a 27-nation grouping with disparate economic and political demands, that is often far from easy. 

An early test could come soon with speculation that German Chancellor Olaf Scholz and French President Emmanuel Macron might be planning separate trips to Beijing. 

“The EU and member States should prevent and isolate China’s attempts to apply its divide et impera (divide and rule) tactics,” the bloc’s diplomatic service said. 

Global carbon dioxide emissions from fossil fuel combustion are expected to grow just one percent this year despite concerns over the impact of the energy crisis, the International Energy Agency said Wednesday, amid bumper growth for renewable energy.

The IEA predicted that the CO2 emitted for energy by burning oil, gas and coal would stand at 33.8 billion tonnes in 2022, more than 300 million tonnes more than in 2021.

That increase was however far smaller than the 2-billion-tonne jump the world experienced last year as countries turned to fossil fuels to power their Covid-19 recoveries, it added.

The United Nations says greenhouse gas emissions must be halved by 2030 to keep the Paris Agreement temperature goals within reach — effectively a drop of some eight percent each year this decade.

The energy crisis sparked by Russia’s invasion of Ukraine propped up some coal demand this year due to hikes in natural gas prices, said the IEA.

But the relatively small increase in coal emissions had been offset by widespread deployment of renewable tech, including electric vehicles (EVs) — and this had prevented a CO2 rise of some 1 billion tonnes in 2022.

“The encouraging news is that solar and wind are filling much of the gap, with the uptick in coal appearing to be relatively small and temporary,” said IEA Executive Director Fatih Birol. 

“This means that CO2 emissions are growing far less quickly this year than some people feared –- and that policy actions by governments are driving real structural changes in the energy economy.”

The IEA analysis showed that solar photovoltaic and wind capacity grew by more than 700 terawatt-hours in 2022, the largest single year rise on record. 

Birol said the trend is due to continue “thanks to the major clean energy policy plans that have advanced around the world in recent months”.

Coal was expected to register the next largest increase due to high gas prices, rising 200 millions tones in terms of CO2, or around two percent year-on-year.

The IEA said emissions in Europe were likely to fall slightly this year and continue their downward trajectory with a spate of new renewable projects slated for next year. 

In China, the world’s largest polluter, emissions will stay largely flat in 2022, it said.