World

Putin oversees nuclear response drills

Russian President Vladimir Putin on Wednesday surveyed drills carried out by his nuclear-capable forces as Moscow pressed unfounded claims to India and China that Ukraine was developing a “dirty bomb.”

The drills are the latest in a series of escalatory comments from Moscow and Putin — who observed the drills from a control room —  that the eight-month conflict in Ukraine could turn nuclear.

“Under the leadership of… Vladimir Putin, a training session was held with ground, sea and air strategic deterrence forces, during which practical launches of ballistic and cruise missiles took place,” the Kremlin said in a statement.

Russian state-run media ran footage of a submarine crew preparing the launch of a Sineva ballistic missile from the Barents Sea in the Arctic.

The drills also included launching test missiles from the Kamchatka peninsula in the Russian Far East. 

Footage of the drills across state media came after Russia’s Defence Minister Sergei Shoigu pressed ahead with telephone calls to his counterparts globally, claiming that Ukraine was developing a “dirty bomb”.

Shoigu, who has made these claims in recent days to counterparts from NATO countries, reiterated them to Chinese counterpart Wei Fenghe on Wednesday. 

– Moscow alleges ‘irresponsible behaviour’ –

Shoigu also voiced the same “concerns” in a phone with India’s Defence Minister Rajnath Singh earlier on Wednesday, Moscow said.  

Ukraine has dismissed the allegations as “absurd” and “dangerous,” suggesting the claims could be cover for Russia’s own plans on the battlefield, as have its western allies, including Britain, France and the United States.

A dirty bomb is a conventional bomb laced with radioactive, biological or chemical materials which are disseminated in an explosion.

Kremlin spokesman Dmitry Peskov told reporters earlier Wednesday that Russia had information pertaining to the “existing threat” of Ukraine using a “dirty bomb” and that Kyiv was “preparing for such a terrorist act of sabotage”.

He added: “We will continue vigorously bringing our point of view to the world community to encourage them to take active steps to prevent such irresponsible behaviour.” 

Nuclear rhetoric from Russia began building in September, when Moscow said it was annexing four regions of Ukraine over which its forces have partial control. Putin warned Russia could use nuclear weapons to defend them.

– Advance on Kherson –

One of those regions is Kherson, in southern Ukraine near Moscow-annexed Crimea, where Kyiv has been clawing back territory since a counter-offensive it announced at the end of the summer. 

Russian-backed authorities in recent days urged residents to flee what they say is an oncoming onslaught. They claimed to have turned the city of Kherson into a “fortress”, vowing to defend it at all costs. 

A Moscow-installed official in the region, Vladimir Saldo, said Wednesday that at least 70,000 people have left their homes within the last week. 

Ukraine’s capture of the Kherson region would give Kyiv back important access to the Sea of Azov. It would also cut off Moscow’s land bridge to Russian-annexed Crimea. 

Saldo banned entry to the right bank area of the region for a period of seven days “due to the tense situation on the contact line”, according to a statement on his social media on Wednesday.  

Russia’s offensive to capture Ukrainian territory spurred a wave of international solidarity with Kyiv, including hundreds of foreigners who volunteered to help fend off Russian advances. 

Kyiv said Wednesday that Russia had returned the remains of US citizen Joshua Alan Jones, who was killed fighting Moscow’s forces in August, along with 10 Ukrainian servicemen in a prisoner swap.

Climate pledges still 'nowhere near' enough for 1.5C: UN

International climate pledges remain far off track to limit temperature rises to 1.5 degrees Celsius, according to a UN report released Wednesday, less than two weeks ahead of high-stakes negotiations to tackle global warming.

The combined climate pledges of more than 190 nations that signed up to the 2015 Paris climate deal put Earth on track to warm around 2.5C compared to pre-industrial levels by the century’s end, the UN said. 

With the planet already battered by climate-enhanced heatwaves, storms and floods after just 1.2C of warming, experts say the world is still failing to act with sufficient urgency to curb greenhouse gas emissions.     

“We are still nowhere near the scale and pace of emission reductions required to put us on track toward a 1.5 degrees Celsius world,” said Simon Stiell, Executive Secretary of UN Climate Change. 

“To keep this goal alive, national governments need to strengthen their climate action plans now and implement them in the next eight years.”

The UN’s climate experts have said emissions — compared to 2010 levels — need to fall 45 percent by 2030 in order to meet the Paris deal’s more ambitious goal.

In this latest report, the UN said that current commitments from governments around the world will in fact increase emissions by 10.6 percent by 2030, from 2010. This was a slight improvement from a similar analysis a year ago.

– ‘Disappointing’ –

When nations met in Glasgow last year for a previous round of climate negotiations, they agreed to speed up their climate pledges to cut carbon pollution this decade and increase financial flows to vulnerable developing nations. 

But only 24 countries, of 193, had updated their plans at the time of the report, which Stiell said was “disappointing”.    

“Government decisions and actions must reflect the level of urgency, the gravity of the threats we are facing, and the shortness of the time we have remaining to avoid the devastating consequences of runaway climate change,” he said.

He called on governments to revisit and strengthen their carbon cutting plans in line with the Paris temperature goals before the UN climate meeting, which will be held from November 6 to 18 in Sharm el-Sheikh, Egypt.

Nations are meeting in the shadow of Russia’s invasion of Ukraine and cascading global crises of hunger, energy prices and living costs, exacerbated by extreme weather.  

Research by the World Resources Institute suggests that the world needs to curb emissions six times faster by 2030 than the current trajectory to meet the 1.5C warming cap. 

Australia and Indonesia have offered “some momentum” by stepping up their climate pledges since the last UN climate negotiations, said WRI’s Taryn Fransen, adding that further announcements from a range of countries including the European Union, Chile, Turkey and Vietnam are expected this year.  

She said the world’s second biggest emitter, the United States, took a “massive step” this year with measures in its new sweeping climate and inflation bill and urged China, the biggest emitter, to set a specific goal to cut planet-warming methane pollution.  

– ‘Transformative response’ –

A second UN report also released Wednesday looked at longer term and “net-zero” climate goals to around mid century put forward by dozens of countries. 

It found that those countries’ greenhouse gas emissions would be 68 percent lower by 2050 than they were in 2019, if all strategies were fully implemented. 

“This is a sobering moment, and we are in a race against time,” said Sameh Shoukry, Egyptian Minister of Foreign Affairs and President-Designate of the upcoming UN COP27 talks.   

Countries need to do more, he said, adding that the “alarming findings merit a transformative response” in Egypt. 

Scientists have warned that any rise above 1.5C risks the collapse of ecosystems and the triggering of irreversible shifts in the climate system.

With the impacts slamming hardest into countries least responsible for fossil fuel emissions, calls have grown louder for richer polluters to pay “loss and damage” to vulnerable nations.

In a landmark report this year on climate impacts and vulnerabilities, the UN’s 195-nation Intergovernmental Panel on Climate Change (IPCC) warned that time had nearly run out to ensure a “liveable future” for all. 

That report was signed off by the same governments that will return to negotiations in Egypt. 

Would-be crypto investors in Singapore could face risk awareness tests

People looking to trade cryptocurrency in Singapore may soon have to take a test to prove they understand what they are getting into, the central bank said Wednesday, as it looks to prevent clueless investors from bankrupting themselves.

The Asian finance hub has taken cautious steps to expand its digital assets market, but has warned against the risks from trading in digital coins, especially among small investors lured by stories of quick riches.

“Trading in cryptocurrencies is highly risky and not suitable for the general public,” the Monetary Authority of Singapore (MAS) said as it unveiled proposals to protect traders.

“However, cryptocurrencies play a supporting role in the broader digital asset ecosystem and it would not be feasible to ban them.”

Under the plan, which will face public scrutiny before it can become legislation, the MAS will require cryptocurrency service providers to be more transparent in telling consumers about the risks so they can make informed choices.

Would-be investors must also take a test to assess their understanding of the risks before they are allowed to trade, and they will be barred from using credit cards or payment apps to buy the units.

If an applicant fails to answer the questions correctly, service providers can give them “educational materials… to strengthen the customer’s knowledge of the risks… This should not be limited to those questions to which the retail customer answered incorrectly”.

Incentives encouraging consumers to invest in crypto are not allowed, and service providers must also adhere to certain standards on how to carry out their business, the MAS said.

Chia Hock Lai, co-chairman of the Blockchain Association Singapore, said while the proposed measures are “comprehensive”, they run the risk of “over-regulating” as some are interconnected.

For example, the risk awareness test “should negate the need to bar credit card payments and provision of incentives to retail customers”, he told AFP.

There has been a global push to regulate the crypto market following wild swings and a string of high-profile collapses, some of which took place in the city-state, hitting its reputation as a potential crypto hub.

In June, Singapore-based cryptocurrency hedge fund Three Arrows Capital collapsed, while Hodlnaut — a crypto lender based in the country — has been placed under interim judicial management.

Fugitive South Korean national Do Kwon, founder of cryptocurrency Terra, was also based in the city-state.

Despite the risks, digital currencies continue to attract investors because of reported big gains made over short periods and promotional endorsements encouraging the public to get into the market, the MAS said.

Cryptocurrencies are not backed by real-world assets, making them subject to huge price swings and trading in them is highly speculative.

Germany allows controversial Chinese stake in Hamburg port

Germany’s coalition government on Wednesday allowed a Chinese firm to buy a reduced stake in a Hamburg port terminal, after Chancellor Olaf Scholz resisted calls to ban the controversial sale outright over security concerns.

Under the compromise agreed by Scholz’s cabinet, Chinese shipping giant Cosco has the go-ahead to buy a stake “below 25 percent” in the Tollerort container terminal owned by HHLA, the economy ministry said in a statement.

“The reason for the partial prohibition is the existence of a threat to public order and safety,” said the ministry.

China’s state-owned Cosco had initially sought a 35-percent stake and the deal would have automatically gone ahead if a compromise solution wasn’t found this week.

The breakthrough came ahead of Scholz’s visit to China next week as the first European Union leader to make the trip since November 2019.

Scholz, a former Hamburg mayor, backed the Cosco deal and has repeatedly stressed the importance of strong trade ties between China and Europe’s biggest economy.

But six ministries wanted to veto the sale, including those of defence, economy and foreign affairs, at a time of heightened concerns about critical infrastructure falling into foreign hands.

The row pitted Social Democrat Scholz against his coalition partners, the Greens and the liberal FDP, who said lessons had to be learned from Germany’s breakdown in ties with Russia.

Beijing welcomed Wednesday’s green light and hit back at critics.

“We hope the relevant parties will view pragmatic cooperation between China and Germany rationally and stop baselessly hyping it up,” said foreign ministry spokesman Wang Wenbin.

Scholz meanwhile was “convinced” that the smaller stake offered to Cosco “does not create strategic dependence”, German government spokeswoman Christiane Hoffmann told reporters.

– ‘Naive’ –

Badly burned by the over-reliance on Russian gas imports, many in Germany are wary of falling into the same trap and becoming too dependent on China economically.

The European Commission also voiced scepticism over the Hamburg project, a source close to the matter told AFP at the weekend, amid fears sensitive information about activity in the port could be relayed to China’s government.

The agreement to settle for allowing a reduced stake of 24.9 percent, thereby depriving Cosco of voting rights, “reduces the acquisition to a purely financial participation”, the economy ministry said.

German harbour logistics firm HHLA for its part said Cosco’s participation would help secure jobs at Hamburg’s port and boost its role as a key trading “hub” with Asia.

But the face-saving compromise failed to silence critics.

Anton Hofreiter, a Green party lawmaker and chairman of the German parliament’s European affairs committee, said approving the deal was the wrong decision.

Scholz’s argument “that this is a purely commercial project is fatally reminiscent of the statements on Russia and Nord Stream (gas pipelines),” he told Funke media group.

“The attitude can be described as naive at best,” he said.

Franziska Brandmann, leader of the FDP’s youth wing, likewise accused the government of being “naive”.

Conservative opposition leader Friedrich Merz said Germany needed “a reassessment of its relationship with China”, noting that the Asian giant was becoming “more repressive” at home and “increasingly aggressive” abroad.

– Tougher stance –

Chinese firms already hold stakes in other European ports, including Rotterdam and Antwerp, but the EU’s stance against Beijing has hardened since then.

Germany too has in recent years taken a closer look at Chinese investment in sensitive technologies and other areas, and reserves the right to veto acquisitions.

The economy ministry said Wednesday that as part of the Cosco compromise, the Chinese firm would not be allowed to appoint senior staff members or have a veto right on strategic business decisions.

Any future attempt to increase the shareholding above the 25-percent threshold would trigger a fresh government review, the ministry added.

China is a key trading partner for Germany, especially for its flagship automotive industry.

But the relationship has been soured in recent years by China’s strict zero-Covid policy, the escalation of tensions over Taiwan and concern over human rights issues in the Muslim-dominated Xinjiang region.

Germany allows controversial Chinese stake in Hamburg port

Germany’s coalition government on Wednesday allowed a Chinese firm to buy a reduced stake in a Hamburg port terminal, after Chancellor Olaf Scholz resisted calls to ban the controversial sale outright over security concerns.

Under the compromise agreed by Scholz’s cabinet, Chinese shipping giant Cosco has the go-ahead to buy a stake “below 25 percent” in the Tollerort container terminal owned by HHLA, the economy ministry said in a statement.

“The reason for the partial prohibition is the existence of a threat to public order and safety,” said the ministry.

China’s state-owned Cosco had initially sought a 35-percent stake and the deal would have automatically gone ahead if a compromise solution wasn’t found this week.

The breakthrough came ahead of Scholz’s visit to China next week as the first European Union leader to make the trip since November 2019.

Scholz, a former Hamburg mayor, backed the Cosco deal and has repeatedly stressed the importance of strong trade ties between China and Europe’s biggest economy.

But six ministries wanted to veto the sale, including those of defence, economy and foreign affairs, at a time of heightened concerns about critical infrastructure falling into foreign hands.

The row pitted Social Democrat Scholz against his coalition partners, the Greens and the liberal FDP, who said lessons had to be learned from Germany’s breakdown in ties with Russia.

Beijing welcomed Wednesday’s green light and hit back at critics.

“We hope the relevant parties will view pragmatic cooperation between China and Germany rationally and stop baselessly hyping it up,” said foreign ministry spokesman Wang Wenbin.

Scholz meanwhile was “convinced” that the smaller stake offered to Cosco “does not create strategic dependence”, German government spokeswoman Christiane Hoffmann told reporters.

– ‘Naive’ –

Badly burned by the over-reliance on Russian gas imports, many in Germany are wary of falling into the same trap and becoming too dependent on China economically.

The European Commission also voiced scepticism over the Hamburg project, a source close to the matter told AFP at the weekend, amid fears sensitive information about activity in the port could be relayed to China’s government.

The agreement to settle for allowing a reduced stake of 24.9 percent, thereby depriving Cosco of voting rights, “reduces the acquisition to a purely financial participation”, the economy ministry said.

German harbour logistics firm HHLA for its part said Cosco’s participation would help secure jobs at Hamburg’s port and boost its role as a key trading “hub” with Asia.

But the face-saving compromise failed to silence critics.

Anton Hofreiter, a Green party lawmaker and chairman of the German parliament’s European affairs committee, said approving the deal was the wrong decision.

Scholz’s argument “that this is a purely commercial project is fatally reminiscent of the statements on Russia and Nord Stream (gas pipelines),” he told Funke media group.

“The attitude can be described as naive at best,” he said.

Franziska Brandmann, leader of the FDP’s youth wing, likewise accused the government of being “naive”.

Conservative opposition leader Friedrich Merz said Germany needed “a reassessment of its relationship with China”, noting that the Asian giant was becoming “more repressive” at home and “increasingly aggressive” abroad.

– Tougher stance –

Chinese firms already hold stakes in other European ports, including Rotterdam and Antwerp, but the EU’s stance against Beijing has hardened since then.

Germany too has in recent years taken a closer look at Chinese investment in sensitive technologies and other areas, and reserves the right to veto acquisitions.

The economy ministry said Wednesday that as part of the Cosco compromise, the Chinese firm would not be allowed to appoint senior staff members or have a veto right on strategic business decisions.

Any future attempt to increase the shareholding above the 25-percent threshold would trigger a fresh government review, the ministry added.

China is a key trading partner for Germany, especially for its flagship automotive industry.

But the relationship has been soured in recent years by China’s strict zero-Covid policy, the escalation of tensions over Taiwan and concern over human rights issues in the Muslim-dominated Xinjiang region.

Climate crisis: Transition of global economy way off track

Across virtually every sector, the greening of the global economy is unfolding far too slowly to stave off climate catastrophe, according to a sobering report Wednesday from a consortium of research organisations.

From power, industry and transport to food production, deforestation and finance, progress across 40 key indicators must accelerate dramatically — in many cases ten-fold or more — to stay in line with the Paris treaty goal of capping global warming at 1.5 degrees Celsius.

Earth’s surface has already warmed 1.2C, enough to unleash a deadly and costly crescendo of climate-enhanced storms, floods, droughts and heatwaves.

In at least five areas those trend lines are still moving in the wrong direction entirely, according to the 200-page analysis, which comes 12 days ahead of crunch UN climate talks in Sharm El-Sheik, Egypt. 

These include the share of natural gas in electricity generation, the share of kilometres travelled by passenger cars, and carbon pollution from agriculture.

“We are not winning in any sector,” said Ani Dasgupta, head of the World Resources Institute, one of half-a-dozen climate policy think tanks that contributed to the report.

The findings, he said, are “an urgent wakeup call for decision-makers to commit to real transformation across every aspect of our economy”.

– Clean energy –

Comparing current efforts to those required by 2030 and mid-century to limit warming to 1.5C, researchers quantified the global gap in climate action. 

“The hard truth is that none of the 40 indicators we assessed are on track to achieve their 2030 targets,” said lead author Sophia Boehm, a researcher at Systems Change Lab.

To prevent dangerous overheating, global carbon pollution must decline 40 percent by the end of this decade. By 2050, the world must be carbon neutral, compensating any remaining emissions with CO2 removal.   

Most worrying, the authors said in a briefing, are shortfalls in the power sector and the lack of progress in halting deforestation. 

The phase-out of coal used to generate electricity without filtering CO2 emissions must happen six times faster, equivalent to retiring nearly 1,000 coal-fired power plants annually over the next seven years, they found.

The power sector is the biggest source of global CO2 emissions, and coal — accounting for nearly 40 percent of electricity worldwide — is by far the most carbon intensive of fossil fuels. 

“If our solution to many things is electrification, then we need to make sure that electricity is clean and free of fossil fuels,” said co-author Louise Jeffery, an analyst at New Climate Institute.    

Huge increases in solar and wind power have not been enough to keep up with expanding demand for energy.

– ‘Irreversible’ forest loss –

Progress on deforestation must accelerate two- to three-fold to keep the 1.5C goal within striking distance, according to the report.

“The loss of primary forest is irreversible, both in terms of carbon storage and as a haven for biodiversity,” said co-author Kelly Levin, chief of science, data and systems change at the Bezos Earth Fund.

“If meeting the 1.5C target is challenging now, it is completely impossible when you chip away at our carbon sinks,” she added, referring to the role of forests and soil in absorbing some 30 percent of humanity’s carbon pollution.  

Other key findings from the report on the pace of change needed this decade:

– Public transport systems such as metros, light-rail and public bus networks must expand six times faster;

– The amount of carbon emitted in cement production must decline 10 times faster;

– Per-capital meat consumption — still on the increase — must drop, and the shift to sustainable diets must happen five times faster.

The report also looked at climate finance.

“Governments and private institutions are failing to deliver on the Paris Agreement’s goals of aligning financial flows with the 1.5C limit,” said Claire Fyson, an analyst at Climate Analytics.

The analysis showed that global climate finance — sure to be a key sticking point at UN talks in Egypt — must grow more than 10 times faster than recent trends, from $640 billion in 2022 to $5.2 in 2030.

At the same time, governments are still pouring money into fossil fuels, spending nearly $700 billion of public financing on coal, oil and gas in 2020.

Major economies nearly doubled the amount they spend on fossil fuel production and consumption subsidies between 2020 and 2021. 

Boeing reports $3.3 bn loss due to rising defense program costs

Boeing reported a surprise $3.3 billion third-quarter loss Wednesday because of swelling costs on several defense programs due in part to supply chain expenses.

The aviation giant reported a four percent rise in revenues to $16 billion, which also missed analyst estimates. 

On the up side, Boeing reaffirmed it is on track for positive free cash flow in 2022.

The company flagged a number of fixed-price defense contracts that have been hit with surging costs, including the KC-46, an aerial refueling and strategic military transport aircraft, and the US presidential plane, Air Force One.  

Boeing also said costs were rising in other unspecified defense programs.

The losses in these projects were “driven by higher estimated manufacturing and supply chain costs, as well as technical challenges,” Chief Executive Dave Calhoun said in a letter to employees.

“Nearly every industry is navigating broad supply chain, inflation, labor and macro-economic challenges — and we’re certainly no different. We’re realistic about the environment we face and are taking comprehensive action.”

Calhoun closed his letter by saying that “turnarounds take time,” adding “we have more work to do — but I am confident in our team and the actions we’re taking for the future.”

The difficulties in Boeing’s defense program came as the company saw a jump in revenues in its commercial airplane division following the resumption of deliveries of the 787 Dreamliner and an increase in deliveries in the 737 MAX. 

But Boeing was expected to face questions on an investor conference call later Wednesday on the timing of the resumption of MAX deliveries to China and also on the regulatory outlook for its latest version of the plane, the 737 MAX 10, which has still not been certified by US authorities.

Shares dipped 0.4 percent to $146.00 in pre-market trading.

Climate pledges still 'nowhere near' enough for 1.5C: UN

International climate pledges remain far off track to limit temperature rises to 1.5 degrees Celsius, according to a UN report released Wednesday, less than two weeks ahead of high-stakes negotiations to tackle global warming.

The combined climate pledges of more than 190 nations that signed up to the 2015 Paris climate deal put Earth on track to warm around 2.5C compared to pre-industrial levels by the century’s end, the UN said. 

With the planet already battered by climate-enhanced heatwaves, storms and floods after just 1.2C of warming, experts say the world is still failing to act with sufficient urgency to curb greenhouse gas emissions.     

“We are still nowhere near the scale and pace of emission reductions required to put us on track toward a 1.5 degrees Celsius world,” said Simon Stiell, Executive Secretary of UN Climate Change. 

“To keep this goal alive, national governments need to strengthen their climate action plans now and implement them in the next eight years.”

The UN’s climate experts have said emissions — compared to 2010 levels — need to fall 45 percent by 2030 in order to meet the Paris deal’s more ambitious goal.

In this latest report, the UN said that current commitments from governments around the world will in fact increase emissions by 10.6 percent by 2030.

When nations met in Glasgow last year for a previous round of climate negotiations, they agreed to speed up their climate pledges to cut carbon pollution and increase financial flows to vulnerable developing nations. 

– ‘Disappointing’ –

But only 24 countries, of 193, had updated their plans at the time of the report, which Stiell said was “disappointing”.    

“Government decisions and actions must reflect the level of urgency, the gravity of the threats we are facing, and the shortness of the time we have remaining to avoid the devastating consequences of runaway climate change,” he said.

He called on governments to revisit and strengthen their carbon cutting plans in line with the Paris temperature goals before the UN climate meeting, which will be held from November 6 to 18 in Sharm el-Sheikh, Egypt.

Nations are meeting in the shadow of Russia’s invasion of Ukraine and cascading global crises of hunger, energy prices and living costs, exacerbated by extreme weather.  

Scientists have warned that any rise above 1.5C risks the collapse of ecosystems and the triggering of irreversible shifts in the climate system.

In the last year alone, the world has seen unprecedented floods, crop-withering heatwaves and wildfires across four continents.

With the impacts slamming hardest into countries least responsible for fossil fuel emissions, calls have grown louder for richer polluters to pay “loss and damage” to vulnerable nations.

In a landmark report this year on climate impacts and vulnerabilities, the UN’s 195-nation Intergovernmental Panel on Climate Change (IPCC) warned that time had nearly run out to ensure a “liveable future” for all. 

That report was signed off by the same governments that will return to negotiations in Egypt. 

Macron, Scholz meet in bid to defuse Paris-Berlin tensions

French President Emmanuel Macron hosted German Chancellor Olaf Scholz for lunch Wednesday, with the leaders hoping to pare back differences on energy and defence and revitalise the European Union’s key double act.

Both leaders were all smiles as Scholz climbed out of his black Mercedes in the courtyard of the Elysee Palace to shake hands, although the German appeared to sidestep Macron’s attempts to put an arm around him.

Hackles have been raised on both sides since Russia’s invasion of Ukraine — less than three months after Scholz took office last December — prompted crisis decisions taken under the pressure of the war and its knock-on effects.

Berlin’s move to spend up to 200 billion euros ($200 billion) subsidising soaring gas prices and refusal to consider an EU-wide energy price cap nettled Paris and other European capitals, who fear the effect on their energy costs.

And France also sees commitments to cooperate on defence procurement floundering, given Germany’s plans for a shared missile shield with other NATO nations using American equipment.

Longer-term projects to jointly develop new fighter jets and tanks also face reluctance from big arms companies, which has worsened since war broke out.

The depth of the differences was laid bare by the recent delay to a regular joint cabinet meeting between Paris and Berlin, which would have been Scholz’s first as chancellor.

And limited expectations for Wednesday’s talks were clear from the schedule released by Macron’s Elysee Palace office, which did not provide for a joint press conference.

“The two leaders will continue their talks on defence, the economy and energy with the aim of strengthening Franco-German cooperation,” the presidency said in a statement.

– ‘Destabilising’ Ukraine war –

Differences between the EU’s two largest and most populous economies — in the past often the brokers of compromise among the bloc’s 27 members — have come at exactly the wrong time.

Russia’s invasion and the resulting disruption to the energy system have coincided with rising tensions between China and the West, as well as fears that more isolationist forces could return to power in Washington.

Berlin and Paris also differ on how to adapt the European Union to be more agile faced with the new challenges, and how quickly to admit new members.

“We can’t allow ourselves not to have a united, strong Europe at this moment in history,” former French foreign minister Dominique de Villepin warned on France Inter radio.

“That starts with a fruitful French-German dialogue,” he added.

Moscow’s burning of bridges with Europe means Germany faces “a change to its model whose destabilising nature must not be underestimated”, Macron has said.

That was made clear earlier this year, when Scholz announced a “new era” in German defence policy supported with massive spending on its creaking military.

Although Berlin’s allies welcomed the change of direction after years of under-investment, the flow of cash has not translated into big contracts for EU or especially French arms firms — one of the undertones of Macron’s calls for greater European sovereignty.

Instead Germany is rushing to buy big-ticket American-made items like F-35 fighter jets and Patriot air defence systems.

– ‘No fundamental crisis’ –

Many observers suggest that spats are inherent to the relationship between two large nations with interests that often diverge.

“The truth is that it’s a marriage of necessity” between France and Germany, a French diplomatic source said.

“This isn’t a fundamental crisis, it’s the basis of the relationship,” they added.

“This French-German relationship has always been made up of chilly patches, moments of tension and then warming up again,” agreed Alexandre Robinet-Borgomano, a German politics expert at French think-tank Institut Montaigne.

“It’s often during moments of crisis where a European response is indispensable that France and Germany manage to overcome their differences to propose a joint solution.”

That may be more difficult with leaders who have yet to develop personal warmth.

“Macron and (former chancellor Angela) Merkel texted every day. I don’t think (Macron and Scholz) are talking every day,” the diplomatic source said.

Britain's new PM delays crunch budget plan

British Prime Minister Rishi Sunak on Wednesday postponed an eagerly awaited budget plan due next week, as the youthful new leader got down to business after weeks of political turmoil. 

Following a meeting of his new cabinet, Sunak was set to engage in his first parliamentary joust against opposition Labour leader Keir Starmer, who is demanding a snap general election.

“The Tories have crashed the economy, with low wages, high prices and a cost-of-living crisis,” Starmer said, in a taste of the attack to come during the Prime Minister’s Questions. 

“The public needs a fresh start and a say on Britain’s future.”

But Sunak, 42, ruled out an early election as he vowed stability and fiscal rectitude following his appointment by King Charles III on Tuesday to succeed Liz Truss after she served just 49 days in Downing Street.

After appointing the cabinet team, Sunak phoned the presidents of Ukraine and the United States to vow continuity on UK foreign policy, including resisting Russia’s invasion of its neighbour with cash and military aid.

But Chancellor of the Exchequer Jeremy Hunt — retained in Sunak’s cabinet along with other senior ministers — said that Monday’s planned “medium-term fiscal statement” was no longer so pressing.

Instead, there will be a full budget statement on November 17 to lay out the new government’s tax and spending plans, Hunt told reporters.

“Now, we have a new prime minister and the prospect of much longer-term stability for the economy,” he said, stressing the new plan would be accompanied by fresh economic forecasts from the Office for Budget Responsibility (OBR). 

– Promise to restore trust –

Hunt said he had discussed the delay with Bank of England governor Andrew Bailey — who had been blindsided by Truss’s previous ill-conceived plan for tax cuts financed by extra borrowing, which sent markets into a tailspin. 

The delay would ensure the budget can “stand the test of time” to give British mortgage holders and businesses more assurance, Hunt said, after the Truss plan provoked a damaging spike in borrowing costs and torpedoed her premiership.

Markets were unperturbed by the postponement, suggesting Hunt and Sunak have successfully calmed investor nerves.

Sunak vowed to restore “trust” and “integrity” in government after Truss’s financial carnage and the many controversies that brought down Boris Johnson before her.

But for critics, the new leader undermined his own pledges by also re-appointing the hardline right-winger Suella Braverman as interior minister, days after she was forced to resign for a security breach.

Foreign Secretary James Cleverly — also retained by Sunak — said Braverman had shown contrition for her “mistake” in emailing classified government documents outside her department.  

The documents reportedly included market-sensitive information from the OBR. 

Hunt declined to confirm this, while Cleverly denied allegations that Sunak reappointed Braverman after a secret deal securing her support against Johnson’s audacious comeback bid.

– ‘Livid’ –

As well as mending Britain’s wounded finances, Sunak is also pledging to reunite the Conservatives after another bruising leadership contest, mere weeks after Johnson was forced out.

The right-leaning Times daily welcomed a “generally broad and capable set of cabinet appointments”, although the left-wing Guardian expressed scepticism.

“Sooner or later, he will face the parliamentary disunity that his election sought to banish,” it said in an editorial. 

Sunak, finance minister under Johnson, also kept Truss’s defence, trade and culture ministers among others, as well as re-hiring some older faces from the Johnson cabinet.

The line-up “reflects a unified party and a cabinet with significant experience, ensuring that at this uncertain time there is continuity at the heart of government”, a Downing Street source said.

But Braverman’s return raised eyebrows across the political spectrum, with Labour demanding answers on the implications for national security. 

Cabinet secretary Simon Case, the UK’s most senior civil servant, was “livid” over her swift return, a source told The Times.

Truss left office as the UK’s shortest-serving premier in history, replaced by its youngest since 1812 and first Hindu leader.

Sunak triumphed in a 96-hour Tory leadership contest after rival contender Penny Mordaunt failed to secure enough nominations from Tory lawmakers and Johnson dramatically aborted his own bid.

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