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Goldman Sachs executive Jose Manuel Barroso, a former top EU chief, in row over Brussels lobbying

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Jose Manuel Barroso, a non-executive chairman of Goldman Sachs, has been criticized for allegedly trying to lobby members of the European Commission — the body he presided over for 10 years.

A letter sent by the current European Commission Vice President Jyrki Katainen to the Corporate Europe Observatory, a non-profit group focused on lobbying, confirmed Tuesday that a meeting between Barroso and Katainen took place in Brussels last October. The meeting was registered in the vice president’s calendar as a meeting with “Goldman Sachs.”

However, Katainen has quickly denied accusations that the former president tried to lobby him. His cabinet wasn’t immediately available for comment when contacted by CNBC, but Katainen told EUobserver Tuesday afternoon that Barroso didn’t try to seek any influence during the meeting.

“We are friends. We know each other from years back. I always meet friends whoever they are,” Katainen told the publication.

Speaking to reporters Wednesday morning, the current President of the European Commission Jean-Claude Juncker said this is a non-subject.

“I’m of the opinion that the meeting between Jose Manuel Barroso, my predecessor, and my vice-president, was respecting in full the rules the Commission has adopted,” Juncker said.

“We never said that Jose Manuel Barroso couldn’t have meetings with commissioners and that commissioners would not be allowed meetings with the former president of the European Commission. We put him on the list of the lobbyists, the meeting between Jyrki Katainen and Jose Manuel Barroso was made public … Had we not made public this meeting, I could understand your question,” Juncker told journalists, adding that this story “is nothing.”

Goldman Sachs also denies that Barroso has tried to lobby the European executive body. “As Chairman of Goldman Sachs International, Jose Manuel Barroso represents our firm with clients, public figures and other important stakeholders. He has from the beginning of his time with us recused himself from representing the firm with any interactions with EU officials. Any such meetings are in his personal capacity built over a long career of public service,” a spokesperson at the investment bank told CNBC.

Lobbying isn’t against European rules, and there is no suggestion that Barroso has done so. But in this case it could seen that he would have a stronger influence on the institution for having been its president, and would be frowned upon after he said he would steer clear of any EU lobbying.

News in 2016 that Barroso would be working for Goldman Sachs raised eyebrows and started a public outcry with thousands of people signing petitions demanding measures against the former president.

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How some firms are trying to fix their gender equality issues

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10’000 Hours | DigitalVision | Getty Images

While progress toward gender equality may be slow and not without its shortfalls, experts say some firms have singled out their own internal issues and are trying hard to turn things around. 

A PwC report last week warned that women’s progress in the workplace in terms of achieving gender equality was expected to fall back to 2017 levels as a result of the pandemic. It warned that in order to undo the pandemic’s damage to women’s position in the workplace by 2030, progress needed to be twice as fast when compared to the previous decade.  

Looking at some of the largest companies in the U.S., non-profit Catalyst found women hold 30 CEO positions at S&P 500 companies, representing just 6% of jobs at that level. Meanwhile, of the 668 largest listed companies in Europe, only 48 had a female CEO, according to the EU-backed non-profit European Women on Boards. Once again, this represented just 6% of the total companies analyzed. 

Ahead of International Women’s Day, CNBC Make It spoke to investment experts to find out which European firms had been showing the most progress in terms of gender diversity. 

‘Ambitious targets’ 

Amy Wilson, an equity ownership services engager at investment manager Federated Hermes, highlighted British drinks maker Diageo as one example. 

The alcoholic beverages industry has “traditionally not (been) great for gender diversity,” Wilson told CNBC via telephone. However, she pointed out that its board was now 60% made up of women, following a concerted effort in this area. 

It is making encouraging progress below the board as well, she said, with women making up 37% of its executive committee. Diageo has set a target to have women in half of all leadership roles by 2030 and is aiming to have 45% of leadership roles held by people from ethnically diverse backgrounds by 2030. 

“So, I think it’s a really good example of a company setting ambitious targets, thinking about diversity a little bit more broadly than gender diversity as well and making progress,” Wilson said.   

Diageo ranked top in terms of the proportion of women on its board in the final report from the Hampton Alexander review, published in February. 

The five-year review, backed by the British government, was an initiative to increase the representation of women in leadership positions and on boards of FTSE 350 companies. As of this year’s report, there are no longer any all-male boards in the FTSE 350. 

Oil major Rio Tinto was another listed company in a traditionally male-dominated sector that Wilson highlighted as making progress on gender diversity. 

She said Federated Hermes spoke to Rio Tinto back in 2017 about the lack of women on its board, accounting for around 16% at the time. Wilson added that it actually led the investment firm to recommend voting against the election of the chair at the general meeting that year because it couldn’t see how the company could ensure 33% of board members would be roles held by women by 2020 — the target set by the Hampton Alexander review. 

“Actually, the board is now 40% women which is a great achievement particularly given the industry they sit in,” she said. 

‘Laddish culture’

Miranda Beacham, the head of environmental, social and governance for equity and multi-asset at asset manager Aegon, singled out IT service firm Softcat for its efforts to turn around its lack of gender diversity. Beacham said Chairman Martin Hellawell, who was formerly CEO of the business, admitted Softcat had a “laddish culture.” Softcat did not immediately respond to CNBC’s request for comment.

“So, he has worked really hard since he’s become the chairman, trying to change the inclusivity of the company, to make it a better place for not only women,” she said. 

IT firm Aveva was another Beacham said was making efforts to close its gaps in gender diversity. One area where it was trying to rectify this was in its workforce in India, she explained, where it was seeing a lot of its female workers leave to start families and struggling to rejoin further down the line because of changes in the software industry. 

In 2018, Aveva started reaching out to the women leaving so they could offer help to brush up on their skills should they decide to rejoin the company. Beacham said it was “quite comforting” to hear that this strategy had meant the firm has been able to retain a lot of their female employees.   

That being said, Aveva was the fifth-worst performer in the Hampton Alexander’s 2021 ranking of board diversity, with just two women on its board of nine directors. 

And Beacham added that diversity and inclusion did bring the “ability for different perspectives to challenge the status quo and to ask the questions that need to be asked.” 

“So, you’re going to end up with better decisions being made,” she said.

The EU-backed EWOB in January published its 2020 ranking of the top European companies in terms of gender diversity on the Stoxx 600 index. It ranked firms according to the proportion of women in leadership, board, executive level and committee roles. 

Here are the top 10:

1. Assura

1. Wihlborgs Fastigheter

1. Grainger

4. Kinnevik

5. Sweco

5. Iliad

7. Asr Nederland

8. Halma

9. Sodexo

9. Suez Environnement

Full gender equality could add as much as $28 trillion to global gross domestic product by 2025, according to a Bank of America report published last week. 

However, the report said that while women’s labor force participation had moved closer to men’s in every advanced economy in recent decades, women were “still less likely than men to engage in paid work.” 

“When women do work, they are more likely to do it part-time, are less likely to advance to management positions, are more likely to face discrimination, and they earn less than men,” the authors of the report said. 

The coronavirus pandemic has only exacerbated gender inequality, with women more likely to work in the hardest-hit sectors. Research has also shown that women have been taking on the brunt of unpaid work during the global health crisis, such as additional child care responsibilities and domestic duties.

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NHS approved a drug that costs $2.5 million

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Kate Cardente holds her then 3-month-old daughter, Ainsley, as she undergoes a gene therapy for Spinal Muscular Atrophy (SMA). SMA is a disease that is the primary genetic cause of death in babies. Ainsley is getting a one-time infusion of Zolgensma.

Baltimore Sun | Tribune News Service | Getty Images

LONDON — A drug that has been labeled the “most expensive drug in the world” has been approved by the U.K.’s National Health Service, a move that could be life-changing to babies and children suffering with a rare genetic disorder.

The innovative gene therapy called “Zolgensma” does not come cheap, with a reported list price of £1.79 million ($2.48 million) per dose, NHS England said in a statement Monday.

The drug will be used for babies and young children suffering from Spinal Muscular Atrophy, a rare and often fatal genetic disease that causes paralysis, muscle weakness and progressive loss of movement.

Babies born with severe type 1 SMA — the most common form of the condition — have a life expectancy of just two years.

The drug will be available on Britain’s health service, which provides medical care for free at the point of delivery, “at a price that is fair to taxpayers after a landmark confidential deal struck by NHS England,” its Chief Executive Simon Stevens announced Monday. NHS England did not disclose the price paid.

The NHS is primarily funded by the government from general taxation, hence the drugs and treatments it approves and uses have to go through rigorous analysis for their cost-effectiveness.

Zolgensma, which is manufactured by Novartis Gene Therapies (which is part of U.S. pharmaceutical Novartis), has been shown in studies to help babies reach milestones such as breathing without a ventilator, sitting up on their own, and crawling and walking after a single infusion treatment.

The latest data suggests that Zolgensma can provide rapid and sustained improvement in motor function for young children with type 1 SMA and prolong their lives.

As many as 80 babies and young children a year could potentially benefit from the gene therapy, the NHS stated.

Life-changer

Stevens said the deal was a “life-changer for youngsters with this cruel disease and for their families.”

“Spinal Muscular Atrophy is the leading genetic cause of death among babies and young children, which is why NHS England has moved mountains to make this treatment available, while successfully negotiating hard behind the scenes to ensure a price that is fair to taxpayers.”

He said the agreement showed that while the health service remained under pressure due to the Covid-19 pandemic, the NHS was still “looking after millions of other patients too, for whom real medical advances are now possible.”

The deal struck with Novartis Gene Therapies secures the drug for NHS patients in England at a substantial confidential discount and paves the way for the National Institute for Health and Care Excellence (NICE) — the public body which issues guidance on the cost-effectiveness of drugs and treatments used by the NHS — to publish draft guidance recommending treatment with Zolgensma.

The terms of the deal mean that some young children that currently fall outside the NICE recommendation criteria will also be eligible to be considered for treatment by a national clinical team made up of the country’s leading experts in the treatment of SMA.

The NHS said it’s ready to fast-track the introduction of the highly complex and innovative gene therapy and will not wait until NICE publish final guidance to get going. This approach is backed by NICE given the importance of administering the one-off treatment as early as possible, it added.

The approval of the drug marks the second medical treatment now available for youngsters with SMA. It added that future treatment possibilities also look promising, with another SMA drug currently being reviewed by NICE.

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Airbus-Boeing truce not a complete reset in US EU relations, experts

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US President Joe Biden has reportedly agreed to lower the income level caps for the third round of stimulus payments.

BRENDAN SMIALOWSKI | AFP | Getty Images

LONDON — The U.S. and the European Union might have reached a trade truce, but some analysts have doubts over whether the two sides will be able to agree on other contentious issues such as digital taxation and relations with China.

U.S. President Joe Biden and European Commission President Ursula von der Leyen announced on Friday a suspension in tariffs imposed during the Trump presidency over aircraft subsidies. The dispute first emerged in 2004 and the World Trade Organization ruled in 2019 and in 2020 that the U.S. and the EU had granted illegal support to Boeing and Airbus respectively.

The $7.5 billion tariffs on EU products and $4 billion duties on U.S. goods are now on hold for four months as both sides look to draw up a deal that will include a permanent solution over support for the aircraft sector.

European officials have said the announcement marks a “reset” in transatlantic relations after four fractious years under the Trump presidency, but some analysts are not convinced.

“The tariff suspension is a first step to defrost trade relations between Europe and the United States, and hopefully a sign that these tariffs will be taken away altogether soon,” Fredrik Erixon, trade expert at the ECIPE think tank, told CNBC on Monday.

“I’m less convinced that the suspension signal a completely new orientation in transatlantic trade, with new agreements to support more economic integration.”

Tech giants

One particularly contentious issue is how some of the world’s biggest tech companies are taxed.

Last week’s news is good news and takes away a short-term risk for the economy we always have had to count in during the last four years.

Carsten Brzeski

economist at ING in Germany

The EU and the U.S. have been at odds over this matter, as well as security concerns around 5G, for years. But since Biden arrived at the White House, the EU is confident that some of these disagreements can be overcome.

In fact, the U.S. has opened the door toward a deal over digital taxation, which the Organization for Economic Cooperation and Development aims to conclude this summer.

But Biden has not departed from all of his predecessor’s policies completely. He has implemented the Buy American First initiative, to incentivize manufacturing in the country and to boost the overall economy as the pandemic takes its toll on the world’s largest economic power.

In the meantime, the EU has also stepped up discussions over strategic autonomy, aiming to reduce its reliance on certain parts of the world.

“Both sides are raising their economic protection against the world economy. In the U.S. by new Buy America polices, for instance, and in Europe by a general campaign to wean itself off its technology dependence on the U.S.. Both sides say they want to take trasatlanticism into a new age, but for that to happen they would first have to resolve controversial issues like digital taxes and new technology frictions,” ECIPE’s Erixon added.

China and Russia

In addition, there are also some sensitivities over how to deal with China and Russia.

The EU signed an investment deal with Beijing just weeks before Biden was inaugurated, despite fears the 27-member bloc could be jeopardizing its relationship with the new president. At the same time, some American lawmakers believe the EU is not assertive enough when it comes to human rights issues in China.

The U.S. also opposes the gas pipeline being built from Russia to Europe and has sanctioned some firms involved in the project.

However, in a press statement on Friday, after a phone call with Biden, von der Leyen said: “We share a strategic outlook on Russia.”

Holger Schmieding, chief European economist at Berenberg told CNBC on Monday that the next item on the transatlantic to-do list could be “attempts to defuse the conflict about the Nordstream 2 pipeline.”

Carsten Brzeski, economist at ING in Germany, also said that the tariff suspension “doesn’t mean that everything will be fine, there are still many stumble blocks ahead like Nordstream and how to deal with China.”

But in the meantime, European exporters can breathe a tentative sigh of relief, at a time when the region is facing a severe economic crisis.

“Last week’s news is good news and takes away a short-term risk for the economy we always have had to count in during the last four years,” Brzeski added.

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