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French official: EU review of France's nuclear plan is expected to proceed quickly
An official from the French energy ministry said that the EU investigation into France's scheme of state-funded funding for six nuclear reactors is expected to move quickly and won't delay any projects. The new reactors will cost tens or even hundreds of billions of Euros and are a key part of France's plan for renewing its ageing nuclear fleet. The new reactors would add 10 gigawatts of capacity and the first one is expected to operate in 2038. The new plants would replace the old ones, and ensure future energy supplies for the rising demand in the coming decade, which is driven by data centres. An official stated that the European Commission will make a declaration by 'the end of march, which is the first step to 'the investigation into France’s state-aid package. Officials said that the process will be fast because it is based on models previously approved, such as the one used in financing the development of two reactors in Czech Republic. The official stated, "We are confident we?are still on time." EDF will make its final investment decision 'in the second half this year. Brussels fears that the six new power plants will further consolidate EDF, the dominant state-owned energy company. The company currently holds more than 75% France's net production of electricity. A thorough?EU investigation will also allow the Commission to build a solid case in the event that Austria's government, which is opposed to nuclear power, launches a legal action against the Commission for approving the deal. This, according some EU officials, seems likely. (Reporting and editing by Inti, Landauro and Hugh Lawson; Reporting by Forrest Crellin)
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Greenland Independence Party wins seat in Danish Parliament at key moment
Greenland's Naleraq Party, which supports rapid independence from Denmark won its first Danish seat at the general election. This sends a critic of Copenhagen-Nuuk's union to a parliamentary chamber during a crucial time in the history of the kingdom. Naleraq secured 24.6% of the vote on Tuesday, an increase of sharply from 12.2% during the 2022 elections. The election result comes amid increased international interest in Greenland after U.S. president Donald Trump's attempts to control the Arctic Island. "It's a clear signal that the status quo in Greenland will not be tolerated," said Qarsoq Hgh-Dam who won Naleraq’s seat. He pledged to do his best?to make sure Greenland has a voice on all issues affecting it. Trump's ambitions brought the island of 57,000 people into sharp focus, and raised questions about Danish investment in infrastructure, defence, and economic development. Naleraq will now be represented in the 179-seat Danish Parliament, where Greenland has two seats and the Faroe Islands two. Naleraq, Greenland’s ruling coalition led by Demokraatit advocates a pragmatic and long-term approach to independence, with Denmark as its key partner. However, Demokraatit is pushing for an immediate separation. This has created a rift that analysts believe Washington may try to exploit. GREENLAND AND DANMARK RELATIONS Hoegh-Dam received the most votes personally in Greenland. He said that he was steadfast in his opposition to military installations in Greenlandic cities. Arctic affairs commentator Martin Breum stated that while Hoegh Dam's win sent a message that "Greenlanders still want changes in their cooperation with Denmark", Naleraq’s pro-independence position does not necessarily represent the official Greenlandic Government's position. Greenland's Prime Minister Jens Frederik Nielsen has been working to strengthen the ties between Greenland and Denmark as a response to the crisis. He said in January that he would prefer Copenhagen to Washington. Inuit Ataqatigiit, the party that became the most popular in Greenland, claimed the second Greenlandic seat. Greenland's Mineral Resources and Businesses Minister Naaja Naaja Nielsen is set to fill the position. She didn't respond to requests for comment. Breum says that despite the result of the election, the close relationship between Greenland, Denmark, and the United States during the U.S. controversy will remain unchanged. (Reporting and editing by Andrei Khalip, Stine Jacobsen)
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Lyft launches driver relief program in response to rising fuel prices in the US
Lyft, the ride-hailing service, announced on Wednesday that it will launch a temporary driver relief program in the United States. Gig workers are being hurt by a sharp increase in fuel prices, caused by disruptions to energy supplies linked to the ongoing U.S./Israeli conflict against Iran. In recent weeks the?national average gasoline price has increased by more than 30%, and is now hovering at $4 per gallon. Lyft’s 60-day program, which runs from March 27 to May 26, offers fuel savings and cash-back incentives for drivers who use the Lyft Direct debit card. Top-performing drivers can expect to receive 2% extra cash back for fuel purchases. Mid-level drivers, meanwhile, will receive an additional 1% on top of the existing rewards, which range from 1% up to 10% depending on driver status. According to the company, combined savings from?partnerships with Lyft could be as high as 94 cents a gallon for drivers in the top tier, based on an average national fuel price of $3.97 a gallon. DoorDash, a food?delivery service, announced?on?Monday that it would be launching a similar?program which would run until April 26. (Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)
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Albemarle begins environmental review of Chile lithium extraction project
Albemarle, the largest lithium producer in the world, announced on Wednesday that it had begun the environmental review process for its first Direct Lithium Extraction project (DLE) in Chile. Albemarle stated in a press release that the project was designed to recover twice as much lithium while reducing the amount extracted of brine compared?to the current operations. Albemarle said in a submission to the Chilean Environmental Assessment Agency that if the project were completed, it would require a total investment of $3.1 billion with a useful lifetime lasting until 2045. The initiative is aimed at a?more sustainable and efficient production in the Salar de Atacama,? it said. This location is?one of the richest sources for the metal necessary to make electric vehicle batteries. Albemarle stated that the project would include a DLE facility within Albemarle’s mining concession, up to six processing train at the center of Chile’s salt flats, as well as the construction of an electricity transmission line. According to the filing, net brine extraction would drop from 442 to 342 milliliters/second with just one DLE train in operation and down as low as 142 milliliters/second with all six trains. Miners have long complained about the?water, both fresh and salty, around the vast Atacama flat. Native communities are concerned that mining will deplete the limited?reserves?of freshwater and brine rich in lithium, and reduce its availability to people and wildlife. (Reporting and writing by Fabian Cambero, Inigo Alexander, Cassandra Garrison and Alexander Smith; editing by Cassandra Garrison)
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German Finance Minister sets out reform plans to boost the growth
The German Finance Minister Lars?Klingbeil proposed Wednesday measures to stimulate the slowing economy. These included income tax reforms and a cap on the excess profits of energy companies. "If Germany remains a powerful country, it's up to us alone." "We alone will decide this," Klingbeil added, adding that Europe's largest economy needs?innovation, greater productivity, and technology leadership. He said: "We need to be technological leaders in key areas. We also need competitive investment conditions, a modern industry base, reliable supply chains and functioning capital markets." Germany's export-driven economy has struggled to grow in the wake of the pandemic. Rising competition from China and higher energy prices have put strain on its economic model. The Finance Minister, who is currently working on the budget for 2027, stated that the government will be reforming fiscal consolidation with detailed analyses of revenue and expenditure. "We can't respond to every problem and crisis with more money," said?Klingbeil. INCREASING PRODUCTIVITY AND WORKING HOURS He said that the German labour market was suffering because of high levels part-time employment, tax transfer systems which in some cases "discourage" additional work and incentives for early retirement. "I want to create a new system where willingness to perform pays," said?Klingbeil. In Germany, half of women work part-time. German income splitting lowers tax for couples with unequal earning, but also increases the effective 'tax' on the lower-earners additional work. This is often the wife. Klingbeil suggested that income splitting in its present form be abolished for future marriages. Reporting by Maria Martinez Editing Made by Madel Chambers and Sharon Singleton
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UN urges Libyan authorities release political activist
The U.N. Mission to Libya (UNSMIL), on Wednesday, called on the?Libyan government to'release political activist Al-Mahdi Abdulati. He said he was arrested and detained last week. UNSMIL reported that Abdulati was arrested on March 18 in Misrata. Misrata is located about 200 km east of Tripoli. It is home to the internationally-recognised Government of National Unity. The U.N. Mission said Abdulati had been?reportedly detained by the Internal Security Agency which operates directly under the GNU. Abdulati has been known to criticize the GNU’s performance in public spending and security issues through his Facebook page, as well as interviews with local TV channels. The mission stated that "this detention is not isolated but part of a pattern recurrent among law enforcement and security entities in the country." The statement of?UNSMIL was not immediately reacted to by the GNU or the Internal Security Agency. Since the 2011 NATO-backed uprising, which ousted Muammar Gadhafi as longtime leader of Libya, there has been little peace or stability in Libya. Oil-rich Libya split in 2014 into eastern and western factions, based in Benghazi (the second largest city) and Tripoli. Rival administrations govern each region. The mission called on all Libyan authorities to stop abusive practices, free all those arbitrarily arrested and hold those responsible accountable. (Editing by Ros Russell).
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BBC reports that BlackRock CEO Fink has warned of a 'global economic recession' should oil reach $150.
BlackRock CEO Larry Fink stated that oil prices could reach $150 per barrel and cause "global depression" if Iran "remains" a threat even after the war is over. Fink said on BBC's Big Boss Interview podcast published on Wednesday that if there was a cessation in war and Iran remained a danger, it would be a threat for trade, to the Strait o f Hormuz or to the peaceful coexistence between the GCC region. "We could see a?years where oil prices are above $100, closer to $150, which will have profound implications to the?economy." When asked what would happen if oil stayed at $150 per barrel, he replied: "We'll have a global recession." Since the U.S. and Israeli war against Iran, oil prices have remained volatile. Prices fell 4% after news that the U.S. sent Iran a 15 point proposal to end the war, raising the prospect of a possible ceasefire. The war has almost completely halted the flow of oil and liquefied gas through the Strait of Hormuz. This is a route that typically transports about one-fifth of world crude oil and?gas supplies.
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ROI-Inflation-spooked rates markets have overshot: McGeever
The markets overshoot and the recent dramatic increase in bets placed on higher interest rates due to the Middle East energy crisis is the latest example: although the move was logical, its magnitude remains questionable. The Iran War shows no signs of stopping and the?markets are still in flux. Rates traders may need to take a break and re-evaluate. The abrupt change in global 'rate outlook' reflects concerns about the short-term impact on inflation of the soaring prices for oil and gas. Federal Reserve now has a higher probability of raising U.S. interest rates in this year rather than cutting them. The European Central Bank and Bank of England will also likely increase their rates multiple times starting next month. Zoom in on the shifts in Europe. On February 27, a day before the joint U.S. - Israeli strike on Iran, UK rate futures indicated 50 basis points of ease by the end of the year, or two quarter point rate cuts. This has now changed to almost 75 basis point?of tightening or three rate hikes. It is remarkable to see a 125-basis-point swing in just a few weeks. Euro zone futures are now pricing in two rate increases, from implying the ECB would keep its key rate at 2% throughout the remainder of the year. This hawkish course could be realized. The policymakers have not recovered from the mistake they made in 2021-22 when they misread "transitory inflation". The last two times that they increased?rates when oil was well above $100 per barrel, in 2008 and 2011, they were widely blamed for policy mistakes. Limits of 2022 Comparative Analysis Many analysts draw parallels between the current energy crisis and that caused by Russia's invasion in Ukraine in February of 2022, which helped to fuel "the worst bout of inflation on developed markets in decades." There are some key differences. Interest rates in February 2022 were significantly lower than those at the beginning of this crisis. The G4 central banks' policy rates were close to zero at that time, and the ECB, Bank of Japan, and Bank of Japan were in negative territory. In addition, trillions of dollars in stimulus money for pandemic fighting and the explosion of economic activity following lockdowns also contributed to inflation in 2022. Early 2022, real interest rates were negative. The combination of super-easy fiscal policy and monetary policies meant that inflation was far from temporary. The U.S. inflation rate has not returned to its target despite the biggest hike cycle in over 40 years. Today, fiscal stimulus is on the agenda. Governments from Washington to Tokyo and Berlin are all set to cut taxes while spending heavily on energy and defense. These volumes are not as large as the pandemic-fighting package that was worth at least 10% GDP. GOLDMAN AND CITI STICK WITH US RATE CUT VIEW Goldman Sachs economists and Citi analysts are part of a shrinking group that is fighting the tide of forecast revisions. They also want the Fed to act quickly and raise interest rates in order to curb price pressures. Jan Hatzius, Andrew Hollenhorst, and their team at Citi are sticking to their three-cut call. They claim that any inflation will be temporary, lasting perhaps a few weeks, but the risks for growth and employment are much greater. They expect a temporary shock to the supply that will raise prices, but also deal a greater blow to demand. It's not impossible. The Purchasing Managers' Index data released on Tuesday revealed that the U.S. Private Sector output in March was at its lowest level in 11 months. Activity in the Euro Zone also fell to a 10 month low. In Britain, activity expanded at its slowest rate in six months. The rate markets should be nervous given the magnitude and speed of the energy shock. It will be difficult to justify a rate increase if the economy is slowing down and unemployment is on the rise, even if inflation is higher than target in both Britain and America. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
Merz, a German economist, says that the public finances can't offset all of the price increases from Iran war
German Chancellor Friedrich Merz said on Wednesday that ending the war in Iran would be the best way to control energy prices.
In response to questions from parliament, he stated that there are "measures" we can take into consideration in order to reduce the pressure but "we cannot offset every price trend by tax measures or funding measures from the federal budget".
He said that the best way to control prices is to end the war in Iran.
Fuel prices have risen in Germany, as well as other countries since the beginning of World War II. Critics accuse oil companies of taking advantage of the crisis to increase their prices.
Merz was skeptical about the calls from his centre-left coalition partners, the Social Democrats, for a tax to be imposed on the "excess profits" of oil firms. He said that the term is practically impossible to define legally.
He said Germany worked with European partners to convince the U.S., Israel and other parties to the conflict to find a diplomatic solution. The war has caused the Strait of Hormuz, a vital shipping route, to be largely closed, sending energy costs soaring around the world.
He said that "this requires a willingness on all sides including Iran, which is not apparent at the moment."
He said that Germany was willing to participate in 'international efforts to stabilize the region' once the hostilities ended, but this would require an UN mandate. (Reporting and editing by Madeline Chambers, Jan Harvey and James Mackenzie)
(source: Reuters)