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At its October meeting, the central bank decreased the deposit rate by 0.25%. This decision followed a slowdown in the euro area’s price increases to 1.8% in September 2024, falling below the central bank’s target of 2%.
The EU interest rate is now: 3.25%
‘The European Commission’s proposal to levy definitive countervailing duties on imports of Chinese battery electric vehicles has garnered the requisite support from EU Member States to proceed with the imposition of tariffs,‘ stated the EU.
Initially, the EU announced in June its intention to impose higher tariffs on imports of Chinese electric vehicles, citing substantial unfair subsidies that threaten economic harm to European electric vehicle manufacturers.
The EU disclosed specific duties for companies based on their level of cooperation and the information provided during the bloc’s investigation into China’s EV production, which commenced last year. Provisional duties have been in effect since early July.
Following the receipt of ‘substantiated comments on the provisional measures‘ from stakeholders, the European Commission updated its tariff strategy in September 2024.
A spokesperson from China’s Ministry of Commerce indicated that Beijing maintains its stance that the EU’s investigation into China’s electric vehicle industry subsidies has led to predetermined outcomes – suggesting that the EU is fostering unfair competition.
China responded by vowing a suitable response.
The settlement’s roots trace back to 2016 when the European Commission deemed that Apple had received illegal state aid via favorable tax deals with Ireland. After prolonged legal disputes, the EU court’s verdict has concluded the issue, mandating Apple to settle the substantial amount.
The Irish government has devised a strategic plan to capitalise on this unforeseen fiscal advantage. The funds are designated for various key sectors to promote sustained economic growth and societal welfare. A considerable portion is allocated for infrastructure enhancements, including transport network upgrades and sustainable energy initiatives, in line with Ireland’s green economy transition goals.
The windfall will also bolster progress in healthcare and education. Plans are in place to improve healthcare facilities and services, enhancing access and care quality for residents. In education, investments will focus on updating educational institutions, fostering research and innovation, and preparing the workforce with future-oriented skills.
The financial influx also presents a chance to tackle housing deficits, with investments directed towards boosting affordable housing availability and ameliorating living standards nationwide. This comprehensive strategy aims to forge a more equitable and thriving society.
In essence, Ireland’s $14 billion windfall from Apple offers an exceptional opportunity to effectuate considerable improvements across diverse sectors, potentially reshaping the country’s economic and social fabric for generations.
It’s quite remarkable how a fortune from just ONE company can be utterly transformational for an entire country.
As of September 2024, Apple’s market cap sat at around $3.4 trillion. This makes Apple the most valuable company in the world by market cap.
Just so you know, 14 billion of 3.4 trillion equals about 0.41%. A small drop in a massive financial ocean.
Excluding the more volatile prices of energy, food, alcohol, and tobacco, the core inflation rate stood at 2.7%, marginally below the anticipated forecasts.
This inflation figure matched the predictions of economists.
This expected decision follows a period of sluggish economic growth in the eurozone and a decrease in inflation, which approached the central bank’s 2% target in August.
The EU interest rate is now 3.5%.
The case dates back to 2016, when the European Commission directed Ireland to reclaim up to 13 billion euros ($14.4 billion) in unpaid taxes from Apple.
The Commission had determined that Apple benefited from ‘illegal’ tax advantages in Ireland for twenty years.
The ruling stems from a 2017 antitrust investigation by the European Commission, the executive arm of the European Union.
The Commission reportedly found that Google had unfairly favoured its own shopping comparison service, to the detriment of rival services.
The core inflation rate, which excludes the volatile elements of energy, food, alcohol, and tobacco, dropped to 2.8% in August from July’s 2.9%, aligning with predictions.
Market expectations have fully incorporated a 0.25% rate cut by the ECB in September 2024, following its initial rate reduction in June 2024, with anticipation of an additional 0.25% reduction before year-end.
This follows a slowdown in price increases in Germany, the largest economy in the eurozone, which cooled to an unexpected 2% for the month, according to the index of consumer prices.
The Nasdaq, known for its tech-centric portfolio, along with the Dow Jones Industrial Average and the S&P 500, all ended the day in more positive territory.
This ‘lift’ came after a period of muted activity in UK and European markets, with London’s FTSE 100 experiencing an initial surge before retreating.
In Japan, the Nikkei 225 stock index recorded a substantial rise of 10.2%, or 3217 points, marking its largest single-day point increase following a steep drop the day before.
The recent turmoil in the stock market was triggered on Friday 2nd August 2024 by unsatisfactory U.S. job data for July 2024, which indicated an increase in unemployment, raising alarms over a potential recession.
Additionally, there has been growing apprehension that stocks of major technology firms, especially those with significant investments in artificial intelligence (AI), may have been excessively valued, leading to challenges for some of these companies.
Core EU inflation, which omits the more volatile prices of energy, food, alcohol, and tobacco, reached 2.9% in July, surpassing expectations.
Services inflation, a closely monitored indicator, registered at 4% for July, marking a slight decrease from the 4.1% figure in June.
The surge in artificial intelligence (AI) has significantly increased the demand for data centres, essential for the ‘exploding’ tech sector. This necessity has led Europe to consider spatial alternatives for digital storage, aiming to diminish reliance on energy-intensive ground facilities.
The Advanced Space Cloud for European Net zero emission and Data sovereignty (ASCEND), a 16-month study investigating the viability of deploying data centres in orbit, has reportedly reached a ‘very encouraging‘ conclusion, according to the report.
The ASCEND study, coordinated by Thales Alenia Space for the European Commission and valued at 2 million euros ($2.1 million), asserts the technical, economic, and environmental viability of space-based data centres.
“The idea [is] to take off part of the energy demand for data centres and to send them in space in order to benefit from infinite energy, which is solar energy,” according to a spokesperson for ASCEND.
Data centres are crucial for advancing digitalization; however, they demand substantial electricity and water to operate and cool their servers. The total global electricity consumption from data centres could reach more than 1,000 terrawatt-hours in 2026 – that’s roughly equivalent to the electricity consumption of Japan, as reported by the International Energy Agency.
The ASCEND study is not alone in exploring the potential of orbital data centres. Microsoft, which has already trialed the use of a subsea data centre – positioned 117 feet deep on the seafloor, is collaborating with companies such as Loft Orbital to explore the challenges in executing AI and computing in space.
However, core inflation, excluding energy, food, alcohol and tobacco, remained at 2.9% from the prior month, just missing the 2.8% forecast.
The rate of price rises in services also failed to move sticking at 4.1%.
This decision reportedly follows an inquiry into the surge of inexpensive, government-subsidized Chinese vehicles entering the EU market.
From 4th July 2024, Chinese EV producers who participated in the investigation will incur an average duty of 21%, while those who did not will face a substantial 38.1% tariff. Specific rates will be imposed on firms such as BYD, Geely, and SAIC.
Additionally, non-Chinese automobile companies manufacturing some EVs in China, including those based in the EU like BMW, will also be impacted. Tesla might receive a specially calculated duty rate upon request.
These levies are on top of the current 10% tariff on all electric cars manufactured in China. The EU’s action comes after the United States’ drastic measure last month to increase its tariff on Chinese electric cars from 25% to 100%.
Some critics view this anti-subsidy probe as protectionist, potentially harming China-EU economic relations and the worldwide automotive production and supply chain. The German Transport Minister has reportedly cautioned about the possibility of a trade conflict with Beijing.
Although the tariffs are intended to shield the EU’s own industry, they highlight the challenges of maintaining a balance between free trade and competitiveness in the swiftly changing EV sector.
Unless a qualified majority of EU nations opposes it, the tariffs will become permanent in November 2024. The European car industry stresses the need for free and fair trade but recognizes that promoting the adoption of electric cars requires a diverse strategy.
As the dispute over tariffs persists, the repercussions for the EV market are yet to be determined.
One thing is for sure, the consumer will suffer through these tariffs and also through extra road tax levies yet to be introduced, especially in the UK.
Analysts had anticipated a 0.1% rise from the 2.4% headline figure reported in April 2024.
Core inflation, which omits the unstable effects of energy, food, alcohol, and tobacco, rose to 2.9% from April’s 2.7%. Contrary to the flat reading projected by economists.
A deviation from the expected 0.25% cut at the ECB’s June 2024 meeting would significantly surprise the markets, given the strong signals from policymakers in recent weeks.
This expansion occurs as the European Union investigates subsidies provided to Chinese electric vehicle manufacturers, a situation that may lead to the imposition of tariffs.
In May 2024 Nio opened a new EV showroom in Amsterdam, while Xpeng introduced its G9 and G6 sports utility vehicles in France.
Over the years, China’s electric vehicle industry has flourished due to the government’s incentives and support, raising concerns among politicians in Europe and the U.S.
Public marketing campaigns are unfolding against the backdrop of a European Commission investigation into subsidies provided to Chinese electric vehicle manufacturers. The outcome of this inquiry may result in EU tariffs being imposed on Chinese EV imports.
The United States has preempted such measures, with the Biden administration enacting a 100% tariff on Chinese EV imports.
Meanwhile, Chinese EV producers are intensifying their international expansion efforts, aiming to compete with Elon Musk’s Tesla on a global scale and secure an early advantage over traditional car manufacturers.
The EU Council announced it has granted final approval for the AI Act, a pioneering regulation designed to establish the first extensive framework for artificial intelligence.
The EU Commission is authorized to impose fines on companies violating the AI Act, up to 35 million euros ($38 million) or 7% of their annual worldwide turnover, whichever is greater.
Headline inflation at 2.4% aligned with economists’ forecasts, while monthly inflation registered at 0.6%. Core inflation, which excludes energy, food, alcohol, and tobacco, fell to 2.7% from March’s 2.9%.
Energy prices’ year-on-year decline softened to -0.6% from -1.8% in March. Meanwhile, the gross domestic product increased by 0.3% in the first quarter, slightly exceeding economists’ expectations.
However, the GDP for the fourth quarter of 2023 was revised from no growth to a contraction of 0.1%, indicating a technical recession in the euro zone for the latter half of the year.
There is growing anticipation that the European Central Bank (ECB) may reduce interest rates at the upcoming monetary policy meeting on 6th June 2024.
Amid this volatility, the European Union’s securities watchdog, the European Securities and Markets Authority (ESMA), has sounded a cautionary note.
ESMA’s latest report highlights a considerable concern: the high level of concentration in crypto trading. A handful of exchanges, led by Binance, dominate the market. In fact, Binance alone accounts for more than half of all crypto trading activity. While this concentration might seem advantageous from an efficiency standpoint—thanks to economies of scale—it raises significant questions.
Imagine a scenario: Binance, Coinbase or any crypto platform for that matter experiences a catastrophic failure or malfunction. The repercussions would reverberate far beyond its platform.
The entire crypto ecosystem would feel the impact. Investors, traders, and enthusiasts would face disruptions, financial losses, and uncertainty. The interconnectedness of the crypto world amplifies the stakes.
ESMA’s concerns centre on systemic risk. When a single entity dominates a market, vulnerabilities emerge. What if Binance falters due to technical glitches, cyberattacks, or regulatory crackdowns? The fallout could destabilise other exchanges, trigger panic selling, and erode investor confidence. The crypto market, already prone to wild swings, would face heightened turbulence.
ESMA’s report underscores the need for vigilance. Regulatory bodies must strike a delicate balance: promoting innovation while safeguarding stability. Diversification across exchanges, robust risk management practices, and stress testing are essential. Additionally, fostering competition and encouraging new players can dilute concentration risk.
Crypto enthusiasts should heed ESMA’s warning. While the allure of rapid gains remains strong, prudent risk assessment is crucial. Investors must diversify their holdings, stay informed, and choose exchanges wisely. As the crypto landscape evolves, collaboration between regulators, industry players, and investors will shape its future.
In this high-stakes game, the EU watchdog’s message is clear: Tread carefully as you navigate the digital frontier.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research and consult professionals before making investment decisions
Remember to always do your own careful research or employ regulated financial advice.
According to the latest World Economic Outlook released by the IMF, Russia’s economy is projected to expand by 3.2% in 2024.
This growth outpaces the anticipated growth rates for the U.S. at 2.7%, the U.K. at 0.5%, Germany at 0.2%, and France at 0.7%.
The forecast may be galling for Western countries that have endeavoured to economically isolate, restrict and punish Russia for its invasion of Ukraine in 2022.
Russia has demonstrated that Western sanctions on its industries have made it more self-sufficient and that private consumption and domestic investment remain resilient.
Oil and commodity exports to nations such as India and China, (two of the largest countries in the world by population) – as well as alleged sanction evasion and high oil prices, have allowed Russia to maintain strong oil export incomes streams.
Outside of Russia, the IMF has revised its forecasts for Europe and the UK, projecting a growth of 0.5% for this year. This positions the UK as the second-lowest performer within the G7 group of advanced economies, trailing behind Germany.
The G7 also includes France, Italy, Japan, Canada and the U.S.
However, UK growth is expected to improve to 1.5% in 2025, placing the UK in the top three best G7 performers, according to the IMF.
The IMF also reported said that interest rates in the UK will remain higher than other advanced nations, close to 4% until 2029.
Eurozone inflation eased to 2.4% in March 2024, as indicated by preliminary figures released on Wednesday 3rd April 2024.
This decrease has increased expectations that interest rate cuts may start in the summer 2024.
Market analysts anticipate that the central bank will commence reductions in interest rates starting in June 2024, reflecting recent communications from the ECB.
On Monday, 25th March 2024, the European Union initiated its first investigation under the new Digital Markets Act, targeting Apple, Alphabet, and Meta for potential tech legislation breaches.
“Today, the Commission has opened non-compliance investigations under the Digital Markets Act (DMA) into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari and Meta’s ‘pay or consent model” – the Commission said in a statement.
Known as the Artificial Intelligence Act, this groundbreaking legislation is expected to serve as a global signpost for other governments grappling with how to regulate this fast-developing technology.
The AI Act takes a risk-based approach, categorizing AI applications based on their risk levels. It prohibits certain high-risk uses, emphasizes transparency, and aims to keep AI development human centric. This landmark regulation should help set a precedent for responsible AI deployment worldwide.
The regulation is expected to become enforceable in May 2024, after passing final checks and receiving endorsement from the European Council.
Euro zone inflation eased to 2.6% in February figures showed on Friday 1st March 2024, but both the headline and core figures were higher than expected.
Core inflation, removing the volatile elements of energy, food, alcohol and tobacco was 3.1% above the 2.9% rate expected.
The February figures will be a headache for EU policymakers, as core inflation is still holding above 3% even as the headline rate moves toward the ECB’s 2% target.
The EU agreed guidelines around AI in systems like ChatGPT and facial recognition.
The European Parliament will vote on the AI Act proposals early next year, but any legislation will not take effect until 2025 at the earliest. The U.S., UK and China are all rushing to publish their own guidelines.
The proposals include safeguards on the use of AI within the EU as well as limitations on its adoption into law.
European Commission President Ursula von der Leyen said the AI Act would help the development of technology that does not threaten people’s safety and rights. Consumers would have the right to launch complaints and fines could be imposed for violations.
In a social media post, she said it was a ‘unique legal framework for the development of AI you can trust’.
The European Parliament defines AI as software that can ‘for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations or decisions influencing the environments they interact with.’
This is a significant step towards ensuring that AI development and deployment are aligned with ethical standards and respect for human rights.
Will the EU, UK, U.S., China and other countries AI rules conflict?
Annual inflation in the euro zone sank to 2.4% in November 2023 from 2.9% in October 2023, data showed Thursday 30th November 2023.
Core inflation was also below expectations at 3.6%.
The European Central Bank has stressed that it is too early to declare victory in the 20-member euro zone bloc, as they monitor potential pressures from wage increases and energy markets.
Headline inflation has now fallen significantly from the peak levels of 10.6% in October 2022.
Target of 2% and is well within reach.
The company aims to offer sustainable, high-speed air mobility through its aircraft, vertiports and digital service. Lilium successfully tested its prototype in 2019 and 2021 and plans to launch its services in multiple cities by 2025.
Lilium is one of the leading companies in the emerging eVTOL market, which faces challenges such as regulation, infrastructure, safety and public opinion. Lilium claims that its jet is faster, quieter and more efficient than its competitors, and that it can travel up to 300 km in just 60 minutes.
Lilium has been granted EU approval to design and operate its electric vertical takeoff and landing vehicles globally.
It’s a key milestone for the industry. Lilium has been working for several years to get such vehicles ready for commercial market.