View Source

How Can the City of London Survive Brexit?

LONDON — Coming out of Brexit this year, Britain’s government needed a new blueprint for the future of the nation’s financial services as cities like Amsterdam and Paris vied to become Europe’s next capital of investment and banking.

For some, the answer was Deliveroo, a London-based food delivery company with 100,000 riders on motor scooters and bicycles. Although it lost more than 226 million pounds (nearly $310 million) last year, Deliveroo offered the raw promise of many fast-growing tech start-ups — and it became a symbol of Britain’s new ambitions by deciding to go public and list its shares not in New York but on the London Stock Exchange.

Deliveroo is a “true British tech success story,” Rishi Sunak, Britain’s top finance official, said last month.

It was a false start. Deliveroo has since been called “the worst I.P.O. in London’s history.” On the first day of trading, March 31, the shares dropped 26 percent below the initial public offering price. (It has gotten worse.)

impacts from Brexit were immediate: On the first working day of 2021, trading in European shares shifted from venues in London to major cities in the bloc. Then London’s share of euro-denominated derivatives trading dropped sharply. There’s anxiety over what could go next.

Financial services are a vital component of Britain’s economy, making up 7 percent of gross domestic product — £132 billion in 2019, or some $170 billion. Exporting financial and other professional services is something Britain excels at. Membership in the European Union allowed London to serve as a financial base for the rest of the continent, and the City’s business ballooned. Four-tenths of financial services exports go to the European Union.

The government has begun hunting for ideas to bolster London’s reputation as a global finance center, in a series of reviews and consultations on a variety of issues, including I.P.O.s and trading regulations.

For many, the changes can’t come soon enough.

“The United Kingdom is not going to sit still and watch its financial services move across” to other European cities, said Alasdair Haynes, the founder of Aquis, a trading venue and stock exchange for equities in London. This will make the next three or four years exciting, he said.

But this optimism isn’t universal. The prospects of a warm and close relationship between Britain and the European Union have considerably dimmed. The two sides recently finished negotiations on a memorandum of understanding to establish a forum to discuss financial regulation, but the forum is voluntary, and the document has yet to be signed.

Duff & Phelps found that fewer see London as the world’s leading financial center but that it topped the leader board for regulatory environment.

Here are some of the plans.

Mr. Sunak told Parliament on March 3, the same day a review commissioned by the government recommended changes designed to encourage tech companies to go public in London. It proposed ideas, common in New York, that would let founders keep more control of their company after they began selling shares.

For example: allowing companies with two classes of shares and different voting rights (like Facebook) to list in the “premium” section of the London Stock Exchange, which could pave the way for them to be included in benchmark indexes. Or: allowing a company to go public while selling a smaller proportion of its shares than the current rules require.

The timing of Deliveroo’s I.P.O. wasn’t a coincidence. It listed with dual-class shares that give its co-founder William Shu more than half of the voting rights for three years — a structure set to “closely align” with the review’s recommendations, the company said.

But the idea may be a nonstarter among some of London’s institutional investors. Deliveroo flopped partly because they balked at the offer of shares with minimal voting rights.

the latest craze in financial markets, having taken off with investors and celebrities alike. SPACs are public shell companies that list on an exchange and then hunt for private companies to buy.

London has been left behind in the SPAC fervor. Last year, 248 SPACs listed in New York, and just four in London, according to data by Dealogic. In March, Cazoo, a British used car retailer, announced that it was going public via a SPAC in New York.

Already there are signs that Amsterdam could steal the lead in this booming business for Europe. There have been two SPACs each in London and Amsterdam this year, but the value of the listings in Amsterdam are five times that of London.

Britain’s financial regulatory agency said it would start consultations on SPACs soon and aim to have new rules in place by the summer.

regain ground lost to Germany, France and other European countries on the issuing of green bonds to finance projects to tackle climate change.

London’s finance industry isn’t in danger of imminent collapse, but because of Brexit a cornerstone of the British economy isn’t looking as formidable as it once did. And as London tries to keep up with New York, it is looking over its shoulders at the financial technology coming out of Asia.

The government has continuously billed Brexit as an opportunity to do more business with countries outside of the European Union. This will be essential as international companies begin to ask whether they want to base their European business in London or elsewhere.

When it comes to the future of Britain, it’s “almost a back-to-the-future approach of London as an international center as opposed to being an international and European center,” said Miles Celic, the chief executive of the CityUK, which represents the industry. “It’s doubling down on that international business.”

View Source

Treasury Puts Taiwan on Notice for Currency Practices: Live Updates

Vietnam and Switzerland as manipulators in its final report in 2020. The Biden administration’s report undid those designations, citing insufficient evidence.

Instead, the department said it would continue “enhanced engagement” with Vietnam and Switzerland and begin such talks with Taiwan, which includes urging the trading partners to address undervaluation of their currencies.

“Treasury is working tirelessly to address efforts by foreign economies to artificially manipulate their currency values that put American workers at an unfair disadvantage,” Ms. Yellen said in a statement.

Taiwan is the United States’ 10th largest trading partner in 2019, according to the United States trade representative. Vietnam is the 13th largest, and Switzerland is 16th.

The Treasury Department did not label China as a currency manipulator, instead urging it to improve transparency over its foreign exchange practices.

Treasury kept China, Japan, Korea, Germany, Italy, India, Malaysia, Singapore and Thailand on its currency monitoring list, and added Ireland and Mexico.

“Sonia” chats with coworkers — from a distance.
Credit…IBM

Millions of workers are wondering what the office will be like when they go back after a long stretch of remote work. Employers are trying to prepare them for it.

IBM has designed a “reorientation” program to help its employees adjust when they return to a familiar setting but face a host of unfamiliar new procedures, the DealBook newsletter writes.

“It’s sort of like the first day of school,” said Joanna Daly, the company’s vice president of talent. “A day early, kids go and get to see the classroom or see how things work.”

This is needed, she said, because it is “not simply returning to the workplace as it existed before or the ways of working as it existed before.”

IBM made a “day in the life” video to show employees what to expect. One version of the 11-minute-long video seen by DealBook starts with “Paul” going back to one of IBM’s offices in Britain. To start the day, he goes through a self-screening checklist to assess potential exposure. He enters the office through designated entrances and picks up his masks for the day (and disinfectant wipes if he needs them). Arrows guide him through the halls and up one-way staircases. Only one person is allowed in the bathroom at a time.

The cafeteria is closed, so Paul must bring his lunch. He can’t use the whiteboards or marker pens in conference rooms (and he shouldn’t linger there longer than necessary). If Paul sees other IBMers not following the safety protocols, “It is OK to politely remind them,” the narrator assures him.

Along with the video, IBM produced an 18-page presentation depicting “Sonia’s’’ return to the workplace, serving as a friendly, cartoon-filled back-to-work manual.

“We’re looking now at how might anxiety manifests itself differently for different employees around being back together and then how do we address that,” Ms. Daly said, “through practical understanding of health and safety and also through having enough flexibility in the environment that everyone can kind of get used to coming back.”

IBM, which has 346,000 employees, hasn’t set a timeline for when its U.S. workers will return to the office. The company’s chief executive, Arvind Krishna, has said he expects 80 percent of them will work in a hybrid fashion when they do.

Mercedes-Benz said the electric EQS can travel up to 480 miles on a single charge, a feat the company attributed to new battery technology and the car’s aerodynamic shape.
Credit…Mercedes/Associated Press

Mercedes-Benz unveiled an electric counterpart to its top-of-the-line S-Class sedan on Thursday, the latest in a series of moves by German automakers to defend their dominance of the high end of the car market against Tesla.

The EQS, which will be available in the United States in August, is the first of four electric vehicles Mercedes will introduce this year, including two S.U.V.s that will be made at the company’s factory in Alabama and a lower-priced sedan. Mercedes did not announce a price for the EQS, but it is unlikely to be lower than the S-Class, which starts at $94,000 in the United States.

The cars could be decisive for Daimler, the parent company of Mercedes, as it tries to adapt to new technology.

“It is important to us,” Ola Källenius, the chief executive of Daimler, said of the EQS during an interview. “In a way it is kind of day one of a new era.”

The EQS has a range of 770 kilometers or about 480 miles, according to Mercedes. If that figure is confirmed by independent testing, the EQS would dethrone the Tesla Model S Long Range Plus as the production electric car that can travel the farthest between charges. The Tesla currently occupies the No. 1 spot with a range of just over 400 miles, according to rankings by Kelley Blue Book.

The EQS owes its stamina to advances in battery technology and an exceptionally aerodynamic design, Mr. Källenius said. Some analysts question whether Mercedes can sell enough electric vehicles to justify the cost of development, but Mr. Källenius said, “We will make money with the EQS from the word ‘go.’”

The EQS is the latest attempt by German carmakers to show that they can apply their expertise in engineering and production efficiency to battery-powered cars. Vehicles are Germany’s biggest export, so the carmakers’ success or failure will have a significant impact on the country’s prosperity.

On Wednesday, Audi, the luxury unit of Volkswagen, unveiled the Q4 E-Tron, an electric SUV. The Q4 shares many components with the Volkswagen ID.4, an electric SUV that the company began delivering to customers in the United States in March. Though priced to compete with internal combustion models, neither vehicle offers as much range as comparable Tesla cars.

In the S-Class tradition, the EQS offers over-the-top luxury features like software that can recognize when a driver might be feeling fatigued and can offer to turn on the massage function embedded in the seat.

“You’re going to get S-Class level refinement in a very, very high performing electric car,” Mr. Källenius said. “That’s your buying argument.”

Car buyers in Wuhan in January. China is trying to get its consumers to return to their prepandemic spending levels.
Credit…Gilles Sabrié for The New York Times

China on Friday reported that its economy grew by a remarkable 18.3 percent in the first three months of this year compared with the same period last year. But the spike is as much a reflection of how bad matters were a year ago — when the China’s output shrank by 6.8 percent — as it is an indication of how China is doing now.

Global demand for the computer screens and video consoles that China makes is soaring as people work from home and as a pandemic recovery beckons. That demand has continued as Americans with stimulus checks look to spend money on patio furniture, electronics and other goods made in Chinese factories.

China’s recovery has also been powered by big infrastructure. Cranes dot city skylines. Construction projects for highways and railroads have provided short-term jobs. Property sales have also helped strengthen economic activity.

Exports and property investment can carry China’s growth only so far. Now China is trying to get its consumers to return to their prepandemic ways.

Unlike much of the developed world, China doesn’t subsidize its consumers. Instead of handing out checks to jump-start the economy last year, China ordered state-owned banks to lend to businesses and offered tax rebates.

Travel restrictions over the Lunar New Year holiday dampened consumer appetite and slowed the momentum of Chinese shoppers. But retail data on Friday showed that March sales were better than expected, raising hopes that consumers might be starting to feel confident.


By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet

Global stocks rose on Friday after a string of strong economic reports and company earnings.

The S&P 500 rose 0.2 percent, set for its fourth straight week of gains and another record. The benchmark had gained 1 percent in the week through Thursday and is up nearly 5 percent so far this month.

The Stoxx Europe 600 rose 0.6 percent on Friday, also climbing to a record, while the FTSE 100 in Britain climbed above 7,000 points for the first time since February 2020. Stock indexes in Japan, Hong Kong and China all closed higher.

China reported on Friday that its economy grew by 18.3 percent in the first three months of the year compared with the same period last year, when swathes of the country had been shut down because of the coronavirus pandemic. On Thursday, data showed U.S. retail sales in March leapt past expectations, increasing by nearly 10 percent, and initial state jobless claims fell last week to their lowest level of the pandemic.

This week, banks including Goldman Sachs and JPMorgan Chase reported better-than-expected earnings, and their chief executives delivered upbeat economic forecasts.

The yield on 10-year Treasury notes slipped to 1.57 percent on Friday. Last month, concerns that government spending would overheat the economy and lead to higher inflation sent bond yields shooting higher, to 1.74 percent on March 31. But those worries appear to have been soothed by central bank officials, who have repeatedly said they expect increases in inflation to be temporary.

Earlier this week, data showed that prices in the United States rose 2.6 percent in March from a year earlier, a larger-than-normal increase partly because prices of some items fell in March 2020 as the pandemic took hold.

Another reason yields have drifted lower is a “remarkable” demand for bonds, ING, a Dutch bank, said. Recent Treasury bond auctions have received more bids than normal, and JPMorgan Chase sold $13 billion of bonds on Thursday, the biggest sale ever by a bank, according to Bloomberg.

“Cash has to go somewhere, and it can’t all go into equities,” the ING analysts wrote in a note to clients.

James O’Keefe, the founder of the conservative group Project Veritas, in 2015.
Credit…Stephen Crowley/The New York Times

Twitter said on Thursday that it had blocked the account of James O’Keefe, the founder of the conservative group Project Veritas.

Mr. O’Keefe’s account, @JamesOKeefeIII, was “permanently suspended for violating the Twitter Rules on platform manipulation and spam,” specifically that users cannot mislead others with fake accounts or “artificially amplify or disrupt conversations” through the use of multiple accounts, a Twitter spokesman said.

In a statement on his website, Mr. O’Keefe said he will file a defamation lawsuit against Twitter on Monday over its claim that he had operated fake accounts.

“This is false, this is defamatory, and they will pay,” the statement said.

“Section 230 may have protected them before, but it will not protect them from me,” Mr. O’Keefe said, referring to a legal liability shield for social media. That shield, part of the federal Communications Decency Act, has become a favorite target of lawmakers in both parties.

In February, Twitter permanently suspended the Project Veritas account, saying it had posted private information. It also temporarily locked Mr. O’Keefe’s account.

“We were trying to find the most incendiary way of making them mad,” Caolan Robertson said of the videos he used to make.
Credit…Alexander Ingram for The New York Times

To keep you watching, YouTube serves up videos similar to those you have watched before. But the longer someone watches, the more extreme the videos can become.

Caolan Robertson learned how making clever edits and focusing on confrontation could help draw millions of views on YouTube and other services. He also learned how YouTube’s recommendation algorithm often nudged people toward extreme videos.

Over more than two years, he helped produce and publish videos for right-wing Youtube personalities including Lauren Southern, Cade Metz reports for The New York Times.

Knowing what garnered the most attention on YouTube, Mr. Robertson said, he and Ms. Southern would devise public appearances meant to generate conflict. They attended a women’s march in London and, with Ms. Southern playing the part of a television reporter, approached each woman with the same four-word question: “Women’s rights or Islam?”

They often received a confused, measured or polite response, according to Mr. Robertson. They continued to ask the question and sharpened it. Ms. Southern, for example, said it would be difficult for Muslim women to answer the question because their husbands wouldn’t let them attend the march. That caused anger to build in the crowd.

“It appears in the videos that we are just trying to figure out what is going on, gather information, understand people,” Mr. Robertson said. “But really, we were trying to find the most incendiary way of making them mad.”

Ms. Southern described the situation differently. “We asked the question because we knew it was going to force people to question their own political views and realize the contradiction in being a hard-core feminist but also supporting a religion that, quite frankly, has questionable practices around women,” she said. And, she added, they used video techniques that any media company would use.

Attendees of the disastrous Fyre Festival in the Bahamas won $2 million in a class-action settlement that is subject to final approval.
Credit…Jake Strang, via Associated Press

View Source

Biden Sanctions on Russian Debt Called a ‘First Salvo’ That Send a Message

The Biden administration on Thursday barred American banks from purchasing newly issued Russian government debt, signaling the deployment of a key weapon in Washington’s intensifying conflict with Moscow — threatening Russia’s access to international finance.

The curbs on debt were part of new measures against Russia that primarily involved sanctions on dozens of entities and individuals and the expulsion of 10 diplomats from the Russian embassy in Washington. The moves aim to exploit Russia’s weak economy to pressure Moscow to relent in its campaign to disrupt American political life and menace Ukraine. The limits on debt purchases, which apply to bonds issued by the Russian government after June 14, could raise the cost of borrowing within the Russian economy, limiting investment and economic growth.

For now, that threat remains minuscule. Russian government debt held outside the country amounts to about $41 billion, according to the Russian central bank — a relative pittance in the global economy. For comparison, the U.S. Treasury issued a total of $274 billion in sovereign debt over the first three months of this year alone.

Russia’s government sells most of its debt domestically, and it finances much of its operations through the sale of energy. American investors hold only 7 percent of Russian government debt denominated in rubles, according to Oxford Economics in London.

European business interests seek access to the potentially vast Iranian marketplace. Russia, by contrast, is a major supplier of energy across Western Europe. Russia sits on the region’s doorstep, making European leaders — especially Germany — loath toward greater conflict.

Limiting Russia’s access to the international bond markets amounts to “nibbling around the edges,” said Simon Miles, a Russia expert at Duke University. A meaningful hit would threaten Russia’s market for natural gas in Western Europe.

severed Iran from the global financial system, something Washington could bring about given that the American dollar is the world’s reserve currency, the means of exchange in transactions around the planet. Any bank anywhere on earth that handled business for Iran risked being cut off from the international payment network and denied access to dollars.

Russia has very limited need to borrow money from abroad, having cut its deficits sharply following sanctions that were imposed after its annexation of Crimea in 2014.

“We’ve had a period of austerity, fiscal austerity, ever since that sanctions shock,” said Elina Ribakova, deputy chief economist at the Institute of International Finance, a trade association representing international banks. “They prepared themselves.”

Thursday’s order on Russian debt applies only to American financial institutions, but it could prompt multinational companies beyond the United States to recalculate the risks of transacting with the Russian government.

“It puts them on notice, if you like,” said Mr. Nixey. “Every company that is significantly in Russia is listening to this very, very carefully and wondering if it is a good idea, reputationally or in terms of political risk, whether they should continue doing business at the same volume that they are.”

Andrew E. Kramer contributed reporting from Moscow.

View Source

A Bitter Family Feud Dominates the Race to Replace Merkel

BERLIN — With less than six months to go before Germans cast their ballots for a new chancellor, the political vacuum Angela Merkel leaves behind after 16 years of consensus-oriented leadership is coming more sharply into focus.

A rare and rancorous power struggle has gripped Germany’s conservatives this week as two rivals vie to replace her, threatening to further hobble her Christian Democratic Union, which is already sliding in the polls.

Normally, Armin Laschet, 60, who was elected in January to lead the party, would almost assuredly be the heir apparent to Ms. Merkel. Instead, he finds himself unexpectedly pitted against his biggest rival, Markus Söder, the more popular head of a smaller, Bavaria-only party, the Christian Social Union, in a kind of conservative family feud.

Experts and party members alike are calling for the dispute to be resolved within the coming days, as it risks damaging the reputation of the two conservative parties, jointly referred to as the Union. Because the two parties operate as one on the national stage, they must choose one candidate for chancellor.

“Armin Laschet and Markus Söder must finally understand their responsibility toward the Union,” Tilman Kuban, head of the Young Union, told the Bild daily on Thursday. “If they continue to tear one another apart as they have in the past few days, together they will ensure that there won’t be much left of the Christian Democrats or the Christian Socialists in the future.”

Leading Ms. Merkel’s party would have once been seen as an advantage for Mr. Laschet, but it has recently become a drag. With a botched vaccine rollout and a confusing response to the pandemic, support for the conservatives has plunged by 10 percentage points since the start of the year.

After a series of personal gaffes, Mr. Laschet’s popularity has been dropping. In his home state of North Rhine-Westphalia more than half of the population have said they are not happy with his performance, and a poll this week showed only 4 percent of Germans nationwide see him as “a strong leader.”

At the same time, Mr. Söder, 54, who is also governor of Bavaria, has artfully used several appearances alongside Ms. Merkel after pandemic-related meetings to burnish his image as a man in charge, capable of tackling tough issues and getting things done.

A full 57 percent of Germans said Mr. Söder displayed the qualities of “a strong leader.”

Keenly aware of his popularity, Mr. Söder began openly pushing for the candidacy earlier this week, citing his strong, stable showing in the polls over Mr. Laschet, despite warnings from senior conservatives that public opinion could be fickle.

“At the end of the day, the conservative parties have to make an offer that will be acceptable to voters and the people, and not just a few party functionaries,” Mr. Söder told Bavarian public television. “Of course polls are not everything, but if after several months a clear trend emerges, it cannot just be ignored.”

After leading conservative lawmakers discussed the issue on Sunday, Mr. Söder said he was willing to run, if the Christian Democrats would support him. If not, he added, he would cooperate, “without any grudges.”

But on Monday, after the boards of each party had backed their own leader, Mr. Söder suddenly changed his position. He continued to push for his right to run for chancellor during a closed-door meeting of conservative lawmakers on Tuesday. After four hours of discussions, nearly two-thirds of those present expressed their support for the Bavarian leader — including members of Mr. Laschet’s party.

In a country that views the art of compromise as a valuable skill for a leader, the public game of political chicken could come at a high price. At a time when the environmentalist Greens have rapidly risen in popularity and are now nipping at the conservatives’ heels, they can ill afford such a public display of disharmony.

“At the end of the day, both have to decide between themselves. There is no set procedure that clearly defines how this will end,” said Prof. Thorsten Fass, a political scientist at Berlin’s Free University. Regardless of who runs as the candidate, the damage of the fight will still have to be repaired, Professor Fass said. “It is not a good way to start an election year.”

Both contenders have said they would like the matter to be decided by the end of the week, and pressure from inside both parties is growing for a quick resolution.

Four other political parties are vying to win the most votes on Sept. 26 and seize power by forming a government and naming a chancellor.

The center-left Social Democrats, who have been the junior party in Ms. Merkel’s government coalition since 2017, have already named the finance minister and vice-chancellor, Olaf Scholz, as their choice for chancellor. The Greens, currently polling as the second-strongest party ahead of the Social Democrats and close behind the conservatives, are scheduled to announce their candidate on Monday.

Not everyone is ready to count out Mr. Laschet yet. He is a politician whose recent successes, winning the governorship of North Rhine-Westphalia over a well-liked incumbent and the monthslong race for the Christian Democrat leadership in January, both saw him grasping victory after coming from behind.

Mr. Laschet also has the backing of some of the most senior and influential members of his party, including the former finance minister Wolfgang Schäuble, who has been around since the first time the conservatives split over a chancellor candidate in 1979.

“If Laschet has the nerve and still has his party’s leadership behind him, then Söder could say that he accepts this, then use his position to negotiate a strong minister post for his party in a potential future government,” said Ursula Münch, director of the Academy for Political Education in Tutzing.

On the other hand, if enough pressure from within the party builds on Mr. Laschet, he could concede to Mr. Söder for the sake of the party and the need to move ahead. That would hand the Bavarian leader a victory that would serve to enforce his reputation as a sharp-witted maverick who will change his policies to fit the public mood. As public favor in Bavaria shifted from the far-right Alternative for Germany party to the environmentalist Greens, he abandoned an anti-immigrant stance and embraced a push to save honey bees, to the ire of farmers who have long formed the grass roots of his party.

“He is intelligent, quick and rhetorically strong,” Ms. Münch said of Mr. Söder. “He is able to push people into a corner while keeping a back door open for himself, and in that sense, Laschet can’t hold a candle to him.”

View Source

Iran Talks Resume, Gingerly, After Attack on Nuclear Site

BRUSSELS — Iran and the other signatories of the 2015 nuclear deal resumed negotiations in Vienna on Thursday to revive the accord, though the atmosphere was fraught in the aftermath of the apparent Israeli attack on a major uranium enrichment site in Iran.

Senior diplomats involved in the talks have agreed that the working groups meant to bring both Iran and the United States into compliance with the deal had made progress.

But after the meeting on Thursday, the head of China’s delegation, Wang Qun, called for a faster pace and fewer distractions.

“We do think that all these developments have reinforced our conviction that what is needed most now as a top priority is to do away with any disruptive factors and pick up the pace of negotiation here,” said Mr. Wang, China’s ambassador to the International Atomic Energy Agency.

said in a Twitter post that the “general impression is positive.” He said this meeting would be followed “by a number of informal meetings in different formats, including at expert level.”

The talks have been overshadowed in recent days by Iran’s response to an attack at its Natanz uranium-enrichment facility on Sunday. Tehran decided to further increase enrichment to 60 percent, a major step toward the 90 percent enrichment that is considered suitable for a nuclear bomb and a flagrant breach of the limits of the 2015 accord. Iran also said it would replace damaged centrifuges at the Natanz facility with more advanced models that were banned under the accord.

The Natanz attack was said to have been carried out by Israel, which has regularly criticized the 2015 deal as weak and unlikely to restrain Iran’s nuclear ambitions. U.S. officials have said Israel was responsible for the attack and have denied any American involvement.

The meeting in Vienna involved senior diplomats from Iran, Britain, China, France, Germany and Russia under the chairmanship of the European Union. Senior American officials are in a nearby hotel, because President Donald J. Trump withdrew the United States from the accord in 2018.

The three European nations, joined by the United States, have sharply criticized Iran’s moves in recent days, calling them “provocative” and “particularly regrettable” in the face of progress at the Vienna meetings.

“Iran’s dangerous recent communication is contrary to the constructive spirit and good faith of these discussions,” they noted in a statement, adding that Iran’s enrichment decision was “a serious development since the production of highly enriched uranium constitutes an important step in the production of a nuclear weapon.”

On Wednesday, the U.S. secretary of state, Antony J. Blinken, criticized Iran’s intentions. “I have to tell you, this step calls into question Iran’s seriousness with regard to the nuclear talks, just as it underscores the imperative of returning to mutual compliance” with the nuclear deal.

Iran maintains that its nuclear program is purely civilian.

The talks are designed to bring the United States back into compliance with the 2015 deal by negotiating what economic sanctions should be lifted. A second working group is focusing on how to bring Iran back into compliance, which Iran has deliberately broken as a “remedial” measure since the economic benefits of the accord have been denied it.

Those talks are said to have been positive so far, but Iran’s supreme leader, Ayatollah Ali Khamenei, was dismissive of them in comments made on Wednesday marking the first day of Ramadan in Iran. He said it was “not worth looking at” initial offers for the lifting of sanctions, saying that “the offers they provide are usually arrogant and humiliating.”

He also warned that time could be running out. “The talks shouldn’t become talks of attrition,” Ayatollah Khamenei said. “They shouldn’t be in a way that parties drag on and prolong the talks. This is harmful to the country.”

He also said that Iran was prepared to return quickly to compliance if agreement could be found in Vienna and again denied that Iran would ever build nuclear weapons.

The leader of the Iranian delegation, Abbas Araghchi, a deputy foreign minister, has been busy in Vienna holding bilateral talks in the last few days, rejecting speculation that Iran might withdraw from the negotiations. The impression among other diplomats involved is that Iran is committed to a deal, as is the United States.

How to get there and how to synchronize the moves of both sides in an atmosphere of mistrust is the task of the Vienna meetings. Whether that succeeds, or how long it will take, is unclear. But both Iran and the United States have said that they want a successful conclusion.

View Source

Seeking Cooperation on Climate, U.S. Faces Friction With China

The United States and China do not agree on much nowadays, but on climate change both countries are publicly pledging to do more to fight global warming. The problem will be working together on it.

On Thursday, President Biden’s climate envoy, John Kerry, met in Shanghai with his counterpart to press China on reducing its carbon emissions, at a time when an emboldened Communist Party leadership has become increasingly dismissive of American demands.

In Beijing’s view, the United States still has much ground to recover after walking away from the Paris climate agreement, the 2015 accord to address the catastrophic effects of warming.

Mr. Biden’s commitments to now make climate change a top priority are, to officials in Beijing, merely catching up to China after its leader, Xi Jinping, last year pledged to accelerate the country’s efforts to reduce carbon emissions.

article on Wednesday before Mr. Kerry’s visit.

A main purpose of Mr. Kerry’s travels to China and elsewhere has been to rally support for Mr. Biden’s virtual climate summit of dozens of world leaders next week. Mr. Xi has not yet accepted the invitation, but he will join a similar conference on Friday with President Emmanuel Macron of France and Chancellor Angela Merkel of Germany.

rivalry over technology could spill into climate policy, where innovations in energy, batteries, vehicles and carbon storage offer solutions for reducing emissions. Already, American lawmakers are demanding that the United States block Chinese products from being used in the infrastructure projects that Mr. Biden has proposed.

“If there is a serious lack of basic trust, strategic and political, between China and the U.S., that will inevitably hold back deepening cooperation in the specialized sphere of climate change,” Zou Ji, the president of Energy Foundation China, who has advised Chinese climate negotiators, wrote recently in a Chinese foreign policy journal.

Cooperation between the United States, the worst emitter of greenhouse gases historically, and China, the worst in the world today, could spur greater efforts from other countries. China accounts for 28 percent of the world’s carbon dioxide emissions; the United States, in second place, emits 14 percent of the global total.

Secretary of State Antony J. Blinken and other American officials have said they are prepared to cooperate with the Chinese government on issues like climate, even as they confront it others, including the crackdowns in Hong Kong and Xinjiang and the menacing military operations against Taiwan and in the South China Sea.

It is not clear that Mr. Xi’s government is prepared to compartmentalize in the same way. Officials have indicated that the souring of relations has spoiled the entire range of issues between the two countries.

“Chinese-U.S. climate cooperation still faces many internal and external constraints and difficulties,” said a study released this week by the Shanghai Institutes for International Studies.

resume the role of China’s climate envoy.

Both he and Mr. Kerry — a former secretary of state and Senate colleague of Mr. Biden’s — have high-level support from the leaders who appointed them, making them powerful voices in the political bureaucracies they must confront at home.

Lauri Myllyvirta, the lead analyst at the Center for Research on Energy and Clean Air in Helsinki, who closely follows Chinese climate policy. “His position has the aura of having been installed from the top.”

The Chinese climate official also oversaw a study from Tsinghua University last year that he has indicated helped shape Mr. Xi’s goals to achieve net carbon neutrality for China before 2060.

video talk late last month with António Guterres, the United Nations secretary-general, Mr. Xie said that wealthy countries should deliver on promises of financial support to help poorer countries cope with global warming and acquire emissions-reducing technology.

official Chinese summary of the meeting. He also appeared to gently suggest that the Biden administration should not assume that it naturally belonged at the head of the table.

“We welcome the United States’ return to the Paris Accord,” Mr. Xie said, “and look forward to the United States striving to catch up and exercise leadership.”

Somini Sengupta contributed reporting. Claire Fu contributed research.

View Source

How Mario Draghi Has Made Italy a Power Player in Europe

ROME — The European Union was stumbling through a Covid-19 vaccine rollout marred by shortages and logistical bungling in late March when Mario Draghi took matters into his own hands. The new Italian prime minister seized a shipment of vaccines destined for Australia — and along with them, an opportunity to show that a new, aggressive and potent force had arrived in the European bloc.

The move shook up a Brussels leadership that had seemed to be asleep at the switch. Within weeks, in part from his pressing and engineering behind the scenes, the European Union had authorized even broader and harsher measures to curb exports of Covid-19 vaccines badly needed in Europe. The Australia experiment, as officials in Brussels and Italy call it, was a turning point, both for Europe and Italy.

It also demonstrated that Mr. Draghi, renowned as the former European Central Bank president who helped save the euro, was prepared to lead Europe from behind, where Italy has found itself for years, lagging behind its European partners in economic dynamism and much-needed reforms.

In his short time in office — he took power in February after a political crisis — Mr. Draghi has quickly leveraged his European relationships, his skill in navigating E.U. institutions and his nearly messianic reputation to make Italy a player on the continent in a way it has not been in decades.

denied her a chair, rather than a sofa, during a visit to Turkey last week, saying he was “very sorry for the humiliation.”

In his debut in a European meeting as Italy’s prime minister in February, Mr. Draghi, 73, made it clear that he was not there to cheerlead. He told an economic summit including heavy hitters like his European Central Bank successor, Christine Lagarde, to “curb your enthusiasm” when it came to talk about a closer fiscal union.

That sort of union is Mr. Draghi’s long-term ambition. But before he can get anywhere near that, or tackle deep economic problems at home, those around him say Mr. Draghi is keenly aware that his priority needs to be solving Europe’s response to the pandemic.

Italian officials say his distance from the contract negotiations, which were completed before he took office, gave him a freedom to act. He suggested that AstraZeneca had misled the bloc about its supply of vaccine, selling Europe the same doses two or three times, and he immediately zeroed in on an export ban.

“He understood straightaway that the issue was vaccinations and the problem was supplies,” said Lia Quartapelle, a member of Parliament in charge of foreign affairs for Italy’s Democratic Party.

On Feb. 25, he joined a European Council videoconference with Ms. von der Leyen and other European Union leaders. The heads of state warmly welcomed him. “We owe you so much,” Bulgaria’s prime minister told him.

Then Ms. von der Leyen gave an optimistic slide presentation about Europe’s vaccine rollout. But the new member of the club bluntly told Ms. von der Leyen that he found her vaccine forecast “hardly reassuring” and that he didn’t know whether the numbers promised by AstraZeneca could be trusted, according to an official present at the meeting.

He implored Brussels to get tougher and go faster.

Ms. Merkel joined him in scrutinizing Ms. von der Leyen’s numbers, which put the Commission president, a former German defense minister, on the back foot. Mr. Macron, who had championed Ms. von der Leyen’s nomination but quickly formed a strategic alliance with Mr. Draghi, piled on. He urged Brussels, which had negotiated the vaccine contracts on behalf of its members, to “put pressure on corporations not complying.”

At the time, Ms. von der Leyen was coming under withering criticism in Germany for her perceived weakness on the vaccine issue, even as her own commissioners argued that responding too aggressively with a vaccine export ban could hurt the bloc down the road.

Mr. Draghi, with his direct talk during the February meeting, tightened the screws. So did Mr. Macron, who has emerged as his partner — the two are dubbed “Dracon” by the Germans — pushing for a more muscular Europe.

Behind the scenes, Mr. Draghi complemented his more public hard line with a courting campaign. The Italian, who is known to privately call European leaders and pharmaceutical chief executives on their cellphones, reached out to Ms. von der Leyen.

Of all the players in Europe, he knew her the least well, according to European Commission and Italian officials, and he wanted to remedy that and make sure she did not feel isolated.

Then, in early March, as shortages of AstraZeneca’s Covid vaccine continued to disrupt Europe’s rollout and increase public frustration and political pressure, Mr. Draghi found the perfect gift for Ms. von der Leyen: 250,000 doses of seized AstraZeneca vaccine earmarked for Australia.

“He told me that in the days before he was on the phone a lot with von der Leyen,” said Ms. Quartapelle, who spoke with Mr. Draghi the day after the shipment freeze. “He worked a lot with von der Leyen to convince her.”

The move was appreciated in Brussels, according to officials in the Commission, because it took the onus off Ms. von der Leyen and gave her political cover while simultaneously allowing her to seem tough for signing off on it.

The episode has become a clear example of how Mr. Draghi builds relationships with the potential to yield big payoffs not only for himself and Italy, but all of Europe.

On March 25, when the Commission became suspicious over 29 million AstraZeneca doses in a warehouse outside Rome, Ms. von der Leyen called Mr. Draghi for help, officials with knowledge of the calls said. He obliged, and the police were quickly dispatched.

In the meantime, Mr. Draghi and Mr. Macron, joined by Spain and others, continued to support a harder line from the Commission on vaccine exports. The Netherlands was against it, and Germany, with a vibrant pharmaceutical market, was queasy.

When the European leaders met again in a video conference on March 25, Ms. von der Leyen seemed more confident in the political and pragmatic advantages of halting exports of Covid vaccines made in the European Union. She again presented slides, this time authorizing a broader six-week curb on exports from the bloc, and Mr. Draghi stepped back into a supportive role.

“Let me thank you for all the work that has been done,” he said.

After the meeting, Mr. Draghi, however modestly, gave Italy — and by extension himself — credit for the steps allowing export bans. “This is more or less the discussion that took place,” he told reporters, “because this was the issue originally raised by us.”

View Source

Iran’s Top Leader Signals Nuclear Talks to Resume Despite Natanz Sabotage

Iran’s top leader said Wednesday that his country would keep negotiating with world powers over how to salvage the 2015 nuclear deal, quashing speculation that Iran’s delegation would boycott or quit participating in protest of the apparent Israeli sabotage of a major uranium enrichment site this past weekend.

The declaration by the top leader, Ayatollah Ali Khamenei, who has the last word on security matters in the country of 80 million, came three days after an explosive blast at the Natanz enrichment site plunged the heavily guarded facility into a blackout and disabled or destroyed hundreds of underground centrifuges used to process uranium into fuel.

Suspicion for the destruction immediately fell on Israel, which has sabotaged the Natanz site before. Israel neither confirmed nor denied the accusation but intelligence officials said it was a clandestine Israeli operation.

Outraged and embarrassed over such a security lapse, Iran vowed on Tuesday to triple its uranium enrichment purity — the most brazen departure yet from its commitments under the nuclear deal.

also said they would resume, at 12:30 p.m. local time on Thursday.

The discussions, which began early this month and recessed last Friday, are intended to map out a plan for the return of both Iran and the United States to compliance with the deal, which has teetered on collapse since President Donald J. Trump abruptly withdrew the United States from it three years ago.

Twitter that process could begin soon.

Iran has said that all of its departures from compliance with the nuclear agreement could be easily and quickly reversed when the United States rescinds its sanctions.

carried out a series of raids and attacks targeting Iran’s nuclear scientists and its uranium enrichment facilities.

Although American and Israeli governments have collaborated before to counter what they see as Iran’s militaristic nuclear ambitions, Washington denied any role in Sunday’s blackout. The Biden administration has said it remains committed to reviving the nuclear agreement.

Iran and the United States have not been negotiating directly in the talks in Vienna, which are led by the European Union. Instead the other participants in the 2015 accord — Britain, China, France, Germany and Russia — are acting as intermediaries.

Before the blackout at Natanz, European officials maintained that both Iran and the United States were invested in the success of the talks.

The foreign ministries of Germany, France and Britain issued a joint a statement on Wednesday condemning Iran’s uranium enrichment intentions and said that they “reject all escalatory measures by any actor.”

“This is a serious development since the production of highly enriched uranium constitutes an important step in the production of a nuclear weapon,” the statement read. “Iran has no credible civilian need for enrichment at this level.”

The talks adjourned on a positive note last week. They were scheduled to continue this week after all parties agreed to move forward.

according to senior diplomats who were involved. Two working groups were formed to discuss sanctions and uranium enrichment, both tasked with mapping out a plan to bring the United States and Iran back into compliance with the 2015 deal, formally known as the Joint Comprehensive Plan of Action.

Steven Erlanger and Rick Gladstone contributed reporting.

View Source