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☆ Analysis: Global tax deal at risk as first pillar teeters
▼ + stars: | 2023-06-16 | by ( Leigh Thomas | ) www.reuters.com time to read: +5 min

Reuters GraphicsDIGITAL SERVICE TAXWhile the global minimum tax was always expected to bring in far more revenue, the collapse of plans to redistribute taxing rights would not come without consequences. The Biden administration backed the deal in 2021 in part because it requires other countries to abandon existing or planned digital services taxes targeting big U.S. tech groups. France, which the Trump administration hit with tariff action over its digital services tax before the Biden administration suspended it, has said that it will keep the tax in place as long as Pillar I of the deal is not resolved. Against that background, U.S. companies are eager to see progress on a multilateral solution that would get rid of unilateral digital services taxes. U.S. Treasury Secretary Janet Yellen told CNBC last week that the bill had little chance of passing and that the United States would get on board with the global minimum.

Persons: Peter Barnes, Biden, Trump, Megan Funkhouser, Janet Yellen, Barnes, Leigh Thomas, Christian Kraemer, David Lawder, Catherine Evans Organizations: PARIS, Google, Fiscal Association, Republican, U.S . Congress, Economic Cooperation, Development, Reuters, OECD, Information Technology Industry Council, Republicans, Treasury, CNBC, Trump, Thomson Locations: United States, Paris, France, Washington, U.S, United, Berlin

☆ Low-tax Switzerland votes on global minimum corporate tax rate
▼ + stars: | 2023-06-14 | by ( John Revill | ) www.reuters.com time to read: +4 min

In 2021 almost 140 countries including Switzerland agreed to an Organisation for Economic Cooperation and Development (OECD) deal to ensure large companies pay a minimum tax rate of 15%, to prevent them trying to avoid taxation by transferring profits to low tax countries. Reuters GraphicsEach of Switzerland's 26 cantons can set its own corporate tax rate, but the federal government would impose a top-up tax to ensure companies are paying 15 percent, raising up to 2.5 billion Swiss francs ($2.76 billion) in tax revenue. She said last month, "this minimum tax is coming, with or without Switzerland." Swiss Holdings, a group representing 62 multinationals in Switzerland including Nestle, Johnson & Johnson, and IKEA, supported the minimum tax. Stefan Kuhn, Head of Tax and Legal at KPMG Switzerland, said the top-up tax "gives cantons the money to do something smart to remain competitive."

Persons: Arnd, Fabian Molina, Karin Keller, Johnson, Christian Frey, Stefan Kuhn, Kuhn, John Revill, Alexandra Hudson Organizations: REUTERS, Switzerland Broad, Economic Cooperation, Development, GFS, Google, Nestle, Reuters, Union, Social Democrats, Sutter, OECD, Swiss Holdings, Johnson, IKEA, KPMG Switzerland, Alexandra Hudson Our, Thomson Locations: Bernese, Lake Zug, Zug, Switzerland, ZURICH, Swiss, GFS Bern, Germany, Japan, Basel, Economiesuisse

☆ India predicted to outshine China as Asia remains a bright spot for global growth
▼ + stars: | 2023-06-09 | by ( Jihye Lee | ) www.cnbc.com time to read: +4 min

In its latest global economic outlook report, the OECD predicted India, China and Indonesia would top gross domestic product projections for 2023 and 2024. The OECD added that looser monetary policy in the second half of next year will help household spending momentum return. The report added that it expects OECD countries' average headline inflation to fall to 6.6% this year, after peaking at 9.4% in 2022. 'Fragile' improvementStill, the OECD warned the global economic recovery remains fragile as central banks continue to tighten monetary policy, which could lead to stress in financial markets. Asia remains brightWhile the global economy could slow down further, Asia is expected to remain a bright spot as regional inflation is expected to remain "relatively mild," OECD says.

Persons: Rashtrapati, Clare Lombardelli, Lombardelli, David Malpass Organizations: Rashtrapati Bhavan, Organization for Economic Cooperation, Development, OECD, India, World Bank Locations: India, New Delhi, Kriangkrai, China, Indonesia, Argentina, Turkey, United States, Ukraine, Asia, Japan

☆ US and UK back new 'Atlantic Declaration' for economic cooperation
▼ + stars: | 2023-06-08 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON/LONDON, June 8 (Reuters) - Britain and the United States backed a new "Atlantic Declaration" on Thursday for greater cooperation on pressing economic challenges in areas like clean energy, critical minerals and artificial intelligence. The joint declaration described the partnership as the "first of its kind" in covering the broad spectrum of the two countries' economic, technological, commercial and trade relations. Under the plan, Britain and the United States will strengthen their supply chains, develop technologies of the future and invest in one another's industries, British Prime Minister Rishi Sunak's office said. The two nations will also begin negotiations on a critical minerals agreement, which would allow some UK firms to access tax credits available under the U.S. Inflation Reduction Act. Britain and the United States will also co-operate on telecoms technology including 5G and 6G and quantum technologies, the Atlantic Declaration said.

Persons: Rishi Sunak's, Joe Biden, Biden, Trevor Hunnicutt, Alistair Smout, Sachin Ravikumar, William Schomberg, Jonathan Oatis Organizations: WASHINGTON, United, British, Britain, Sunak, U.S, Thomson Locations: LONDON, Britain, United States, Washington, U.S

☆ Oil prices rise as Saudi output cuts outweigh weak demand signals
▼ + stars: | 2023-06-07 | by ( Arathy Somasekhar | ) www.reuters.com time to read: +3 min

U.S. crude stocks fell by about 450,000, according to data from the Energy Information Administration, compared with estimates for a 1 million build. Diesel inventories rose by 5.1 million barrels, while markets had estimated a build of 1.33 million. Gasoline inventories also rose more-than-expected at 2.8 million barrels, compared with estimates for a build of 880,000 barrels. Wednesday's data also showed that crude oil imports into China, the world's largest oil importer, rose to their third-highest monthly level in May as refiners built up inventories. A weaker greenback helps demand as oil becomes cheaper for foreign buyers.

Persons: Dennis Kissler, refiners, Morgan, Arathy Somasekhar, Ahmad Ghaddar, Yuka Obayashi, Muyu Xu, David Goodman, Mark Potter, Bernadette Baum, Sharon Singleton Organizations: Brent, U.S, West Texas, Saudi, OPEC, BOK Financial, Energy Information Administration, Federal, Organisation for Economic Cooperation, Development, Thomson Locations: HOUSTON, Saudi, China, Houston, London

☆ OECD sees limited growth pick-up as rate hikes weigh
▼ + stars: | 2023-06-07 | by ( Leigh Thomas | ) www.reuters.com time to read: +3 min

Growth would then accelerate only slightly next year to 2.9% - unchanged from March's forecast - as the impact of rate hikes by major central banks over the last year increasingly drags on private investment, starting with housing markets. The U.S. Federal Reserve's main interest rate was seen peaking soon at 5.25-5.5%, with "modest" rate cuts in the second half of 2024. The OECD forecast the U.S. economy would grow 1.6% this year before slowing to 1% in 2024, with the lagged effect of rate hikes hitting the world's biggest economy particularly hard. In March, the OECD saw growth of 0.8% in 2023 and 1.4% in 2024. Similarly, UK growth was seen rising from 0.3% in 2023 to 1% in 2024 as real income growth starts to improve.

Persons: nudging, Leigh Thomas, Mark Potter, Bernadette Baum Organizations: OECD, Organisation for Economic Cooperation, Development, World Bank, Reuters, U.S, Federal, ECB, The Bank of Japan, Thomson Locations: Central, PARIS, Paris

OECD senior tax official John Peterson declined to comment about the outcome of the meeting, citing confidentiality rules. However, he said if one country compensates a multinational with "targeted benefits, for example in the form of grants or tax credits" it would no longer be able to raise revenues from a top-up tax. In that case, the company "will simply be subject to additional top-up tax, equal to the same amount, in another jurisdiction." Decisions on compensation would be taken case by case and no direct link would be established between handouts and the top-up tax, the source added. Asked whether the planned rules could be considered a direct subsidy to offset multinationals' higher taxes, the OECD declined to comment as Vietnam's plans had not been finalised.

Persons: John Peterson, Nguyen Thanh Lam, Francesco Guarascio, Phuong Nguyen Organizations: OECD, Economic Cooperation, Development, Vietnam, Reuters, Samsung Electronics, Intel, Samsung, Thomson Locations: Vietnam, HANOI, China, Hanoi, Korea, handouts

☆ Morning Bid: Fearless VIX, China miss, Canada hike?
▼ + stars: | 2023-06-07 | by ( ) www.reuters.com time to read: +4 min

Wall St's 'fear index', the VIX (.VIX) gauge of implied S&P500 equity volatility, closed below 14 on Tuesday for the first time since February 2020 - more than 5 points below its 33 year average. What's more, the OECD saw Fed rates peaking after just one more hike to the 5.25-5.5% range and "modest" cuts next year. Oil prices remain lower on the week despite new Saudi output cut plans and year-on-year prices are still falling at 36%. Events to watch for later on Wednesday:* Bank of Canada key policy interest rate announcement* U.S. April trade balance. Federal Reserve issues Consumer Credit report for April* Britain's Prime Minister Rishi Sunak travels to Washington to meet with U.S. President Joe Biden* U.S. corporate earnings: Campbell Soup, Brown-FormanReuters GraphicsReuters GraphicsReuters GraphicsReuters GraphicsBy Mike Dolan, Editing by Louise Heavens <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

Persons: Mike Dolan, you'd, eked, Tayyip Erdogan, Mehmet Simsek, Rishi Sunak, Joe Biden, Campbell, Brown, Forman, Louise Heavens Organizations: U.S, Organisation for Economic Cooperation, Development, World Bank, OECD, Bank of Canada, Canadian, Bank of, Federal, Britain's, Forman Reuters Graphics Reuters, Reuters, Thomson Locations: U.S, York, Saudi, Asia, Bank of Canada, Washington

☆ UK predicted to have the highest inflation rate out of all advanced economies this year
▼ + stars: | 2023-06-07 | by ( Silvia Amaro | ) www.cnbc.com time to read: +2 min

The OECD recently predicted that the UK will experience the highest inflation among all advanced economies this year. The U.K. headline inflation is "projected to slow on the back of declining energy prices and to come down close to target by the end of 2024," the OECD noted. "Core inflation is set to be more persistent due to strong services inflation, only receding to 3.2% in 2024." The U.K. is set to report a headline inflation of 6.9% this year, above the OECD average of 6.6% for 2023. Sanctions-struck Russia is forecast to have a headline inflation of just under 5.4% in 2023.

Persons: Andrew Bailey, Governor Bailey, BoE, Paul Dales Organizations: OECD, LONDON, Organization for Economic Cooperation, Bank of England, Capital Economics Locations: Sheffield, Argentina, Turkey, Russia, Paris, Paul

HANOI, May 30 (Reuters) - Samsung and other foreign companies are pushing Vietnam to introduce a multi-million-dollar reform that would compensate them for higher levies they face from next year under a global overhaul of tax rules, a source involved in the talks said. The discussions precede the introduction from January of a minimum tax rate of 15% for large multinationals under a landmark global reform led by the Organisation for Economic Cooperation and Development (OECD). The global rule requires companies paying less in a low-tax jurisdiction to face a top-up levy in their home country. Samsung's tax rate varies by district, and ranged between 5.1% and 6.2% in 2019 in the two northern provinces where it produces smartphones, according to government data cited by local media. Smaller companies that are not within the scope of the new global rules may also receive handouts, the source said.

☆ Opinion | Like It or Not, America Needs Chinese Scientists
▼ + stars: | 2023-05-25 | by ( Dan Murphy | ) www.nytimes.com time to read: +2 min

When we discourage international collaboration in the absence of clear concerns about national security, we limit the pool of possible collaborators, potentially weakening the research. Chinese publishing of research papers has grown, by one measure, to 25 percent in 2020 from less than 1 percent of the global total before 1990. According to some calculations, Chinese papers are cited (an indication of a paper’s impact) by academics in their own work more often than those of any other country. Questions have been raised about Chinese academic fraud and low-quality patents, but more work is needed to assess how widespread those problems are. Under the Chinese model, civilian organizations and businesses are sometimes obliged to support the country’s military apparatus.

The agreement came after the European Union, which participates in the G7, inched closer this month to passing legislation to regulate AI technology, potentially the world's first comprehensive AI law that could form a precedent among the advanced economies. The G7 leaders said they "need to immediately take stock of the opportunities and challenges of generative AI", a subset of the technology popularised by the ChatGPT app. A month later, EU lawmakers urged world leaders to find ways to control AI technologies, saying they were developing faster than expected. The United States so far has taken a cautious approach on governing AI, with President Joe Biden last month saying it remained to be seen whether AI is dangerous. While acknowledging differences on how AI should be regulated, the G7 leaders agreed on Friday to create a ministerial forum dubbed the "Hiroshima AI process" to discuss issues around generative AI, such as copyrights and disinformation, by the end of this year.

☆ Pension reform defiance brings new blood to French trade unions
▼ + stars: | 2023-05-18 | by ( Leigh Thomas | ) www.reuters.com time to read: +5 min

Interest is growing among younger and private sector workers, where unions tend to be less well represented. Vacheron said that more than 30% of the CGT's recent joiners were under the age of 35 while 70% were coming from the private sector, which traditionally is dominated by the CFDT. "Since the retirement reform is contested by the young and old, public and private sector workers, they see a utility in belonging to unions, unions are attractive," Vacheron said. "Unions are rebuilding themselves from the ground up through recruitment and not only street protests," sociologist Michel Wieviorka said. Labour relations consultant Stephanie Matteudi-Lecocq said that the momentum coming from pension reform pushback could ultimately put unions back on more solid footing in companies.

☆ A man in South Korea got caught out after having his twin brother take an entrance exam for him when he double booked himself
▼ + stars: | 2023-05-18 | by ( Sawdah Bhaimiya | ) www.businessinsider.com time to read: +2 min

A Bank of Korea employee got caught after his twin brother took an entrance exam in his name. The man had an entrance exam for two jobs on the same day, but got his brother to take one for him. Rather than trying to rearrange one of the exams, the man asked his twin to take the FSS exam under his name. South Korea is notorious for having a hyper-competitive job market, and for the length and intensity of work many people do. That ranks among the five highest working hours in developed nations.

☆ China-Central Asia Summit: Ukraine war weakens Russian influence
▼ + stars: | 2023-05-18 | by ( Simone Mccarthy | ) edition.cnn.com time to read: +8 min

Xi will present visiting Central Asian leaders with “a series of proposals” on the long-term development of ties and sign agreements, Chinese officials said this week. It is “of great interest to Central Asia nowadays to cooperate with China as one of its important alternative markets,” he added. However, Khitakhunov said, Central Asian leaders would be just as keen to have discussions about trade, investment and joint projects with Western players like the European Union. Central Asian countries have also seen and cracked down on popular protests and unrest in recent years. Like China, Central Asia leaders have typically avoided condemning Russia in forums like the UN, for example abstaining on major General Assembly resolutions calling for the withdrawal of Russian troops.

LONDON, May 12 (Reuters) - Global commercial oil inventories were close to their long-term seasonal average at the end of the first quarter of 2023 following massive releases from the U.S. Strategic Petroleum Reserve (SPR) over the previous 12 months. In the countries of the Organisation for Economic Cooperation and Development (OECD), commercial stocks of crude and refined products stood at 2,804 million barrels at the end of March (“Short-Term Energy Outlook”, EIA, May 12). Commercial petroleum inventories had increased by 200 million barrels compared with the same month a year earlier but over the same time the U.S. SPR was depleted by 195 million barrels. The progressive normalisation of inventories took the upward pressure off oil prices and calendar spreads over the past year. Related columns:- Oil market has absorbed surprise production cut by OPEC⁺ (April 26, 2023)- Oil market has fully absorbed impact of Russia's invasion of Ukraine (March 9, 2023)John Kemp is a Reuters market analyst.

☆ US Treasury's top international official heads to Europe, Asia for talks on economy
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

WASHINGTON, May 4 (Reuters) - The U.S. Treasury Department's top international official is heading to Europe and Asia this week for talks on current macroeconomic trends and events, and a G7 finance officials meeting, Treasury said in a statement on Thursday. Treasury Undersecretary for International Affairs Jay Shambaugh will attend meetings of the Organization for Economic Cooperation and Development in Paris on Friday, before traveling on to Singapore and Japan, Treasury said. The meeting takes place a month after the International Monetary Fund trimmed its 2023 global growth outlook slightly and warned that a severe flare-up of financial system turmoil could slash output to near recessionary levels. Shambaugh will join U.S. Treasury Secretary Janet Yellen at the G7 meeting in Niigata, Treasury said. Reporting by Andrea Shalal; Editing by Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.

Vaping involves heating a liquid that contains nicotine in an e-cigarette which is vaporized and inhaled by the user. “Vaping was sold to governments and communities around the world as a therapeutic product to help long-term smokers quit,” Butler said. “It was not sold as a recreational product – in particular not one for our kids. Vaping concerns across the worldResearchers have found links between nicotine addiction among adolescents and children as a result of increased vaping habits. Meanwhile, the United Kingdom is also tackling high-levels of youth vaping but is pushing it as an alternative to help long-term smokers quit.

☆ France pension protests explained: France is still mad -- but can the protests last?
▼ + stars: | 2023-05-01 | by ( Joseph Ataman | ) edition.cnn.com time to read: +7 min

In 1995, weeks-long mass protests forced the government of the day to abandon plans to reform public sector pensions. For many in France, the pensions system, as with social support more generally, is viewed as the bedrock of the state’s responsibilities and relationship with its citizens. Nathan Laine/Bloomberg/Getty ImagesIn contrast, during the Yellow Vest protests, started in opposition to hikes in fuel prices, violence gradually soured public support. That these pensions protests continue to hold such popular goodwill is an ominous sign for Macron’s future plans. The size and violence of pensions protests spiked when Macron forced the legislation past the country’s lower legislative house without a vote.

☆ Forget the pension protests. France’s economy has momentum
▼ + stars: | 2023-04-30 | by ( Anna Cooban | ) edition.cnn.com time to read: +8 min

France’s economy grew 0.2% in the first quarter of this year, its national statistics agency said Friday, after stagnating in the previous quarter. Yet the long-running protests are unlikely to leave a lasting dent in France’s economy, according to Charlotte de Montpellier, a senior economist at Dutch bank ING. But its $2.8 trillion economy has held up comparatively well. Office buildings illuminated in the La Defense business district of Paris, France, on Monday, Feb. 6, 2023. ‘Momentum’ building for banksBritain’s exit from the European Union has also been a boon for France’s financial sector.

The case for investing in India — a nation of 1.4 billion — is clear, and only bolstered by recent geopolitical shifts. As Western leaders look to boost economic cooperation with countries that share similar values, India, the world’s largest democracy, stands to gain. Arun Sankar/AFP/Getty ImagesIndia’s so-called “demographic dividend,” the potential economic growth arising from a large working-age population, represents a major opportunity. A recent Air India order for more than 200 Boeing planes could support more than 1 million American jobs. One consistent with our democratic values, and another not.”‘Economic miracle?’Beyond geopolitics, India’s economic and demographic fundamentals are driving business interest.

So how did India’s population get so big, and how long will it last? The rise in population despite a drop in the fertility rate can be explained by “demographic momentum.”“When the fertility rate drops, the population continues to grow for several decades. So, even with a replacement or sub-replacement fertility rate, India’s population will continue to grow slowly because of the considerable number of women entering their reproductive years. India’s population growth is slowing downIndia may have overtaken China in total population, but UN data also shows that its growth rate has slowed. Uttar Pradesh, for instance, is home to 17% of India’s population but has only 9% of its industrial jobs.

☆ We got an exclusive look at the pitch deck that math education startup Innovamat used to raise $21 million in new funding
▼ + stars: | 2023-04-19 | by ( Madeline Renbarger | ) www.businessinsider.com time to read: +4 min

Innovamat is a Barcelona-based edtech startup that uses a new way of teaching math to K-8 students. Now, the team has raised $21 million in Series A funding and will expand into the US. The idea for Innovamat, a startup focused on developing a new way to teach math to K-8 students, came to the company's cofounders when they were students themselves. In 2015, Dotti and Piedra spent their free time working as engineering and math teachers at their university's neighboring academy, which helps first year students study and pass important qualifying exams. Check out the 13-slide pitch deck that Innovamat used to raise $21 million in Series A funding:

☆ Explainer: Macron pension reform ends cherished French exception
▼ + stars: | 2023-04-18 | by ( Leigh Thomas | ) www.reuters.com time to read: +5 min

CAN THE FRENCH RETIRE EARLIER THAN OTHERS IN EUROPE? French pension payments as a share of pre-retirement earnings are comfortably higher than elsewhere. That is nearly double the OECD average of 7.7%, with only Italy and Greece spending more than France. In France the average effective age people leave the labour market is 60.4, well below the OECD average of 63.8. Macron's government says that raising the retirement age will plug a 13.5 billion euro shortfall the pension system would otherwise be running by 2030.

Paris CNN —France’s top court on Friday approved the government’s unpopular plans to raise the age of retirement by two years to 64, a huge win for President Emmanuel Macron in the face of mass protests across the country. The Constitutional Council – akin to the US Supreme Court – struck down some elements of the new law, but the most controversial element remains: the gradual upping of the retirement age. Sweeping protests have paralyzed major services across France year this year over Macron’s proposed changes to the pension system. Ahead of the ruling, heightened security was in place in Paris amid expectations of spontaneous protests. With regular, incremental increases, by 2030 the retirement age will have reached 64.

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