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South Africa workers protest minimum wage, Ramaphosa reassures

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South African President Cyril Ramaphosa speaks at a rally on February 11, 2018, in Cape Town.

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South African President Cyril Ramaphosa speaks at a rally on February 11, 2018, in Cape Town.

“The president recognizes that the national minimum wage is not a living wage, but we need to start somewhere,” Ramaphosa’s spokeswoman Khusela Diko said, as reported by Reuters.

SAFTU, the second-largest group of its kind in the country, instead proposes a living wage of R12,500 per month — three times that of the intended minimum wage in monthly terms.

South Africa is one of the most unequal societies in the world. According to the World Bank, the poorest 20 percent of South Africans consume less than 3 percent of the country’s total expenditure. Meanwhile, the wealthiest 20 percent account for 65 percent.

Wages aside, the nation is also known for its rampant unemployment, currently at 26.7 percent according to Statistics South Africa.

But not all trade unions back the protests. Matthew Parks, deputy parliamentary co-ordinator of the Congress of South African Trade Unions — the largest of such groups — described the R20 minimum wage as a “huge victory” given that businesses had originally pushed for R11.

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NATO chief sees Biden’s inauguration as a ‘new chapter’ for alliance

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U.S. President Joe Biden is a “strong supporter” of NATO, and the alliance can be further strengthened with him in office, NATO’s Secretary-General Jens Stoltenberg said this week.

“President Biden and the inauguration of him as the new president represents a new chapter for our alliance because Joe Biden is such a strong supporter of NATO. He knows NATO very well,” the NATO chief told CNBC’s Hadley Gamble on Thursday.

This will be an opportunity to further strengthen NATO, he added, noting that Biden wants to rebuild alliances.

U.S. commitment to NATO reached a low point under former President Donald Trump. He repeatedly attacked allies for paying less than their fair share toward the group.

Stoltenberg said he looks forward to working with the new administration to address issues around the world.

“We are faced with so many challenges at the same time: the rise of China, the … shift in the global balance of power, a more assertive Russia using force against neighbors in Ukraine and elsewhere, and then, of course, the constant threat of terrorist attacks,” he said.

“None of us can tackle this alone, we have to stand together,” he said. “I don’t believe in America alone, I don’t believe in Europe alone, I believe in Europe and North America together in NATO.”

U.S. troops and NATO presence in Afghanistan, Iraq

What matters for me is that we make decisions together, that we are coordinating everything we do in Afghanistan.

NATO also has personnel in Afghanistan and Iraq.

Stoltenberg said NATO is in close consultation with the new U.S. administration. “We will face a difficult dilemma,” he said.

Leaving would risk losing the gains made in Afghanistan in fighting international terrorism and making social progress, but staying means continued involvement in a “difficult military conflict.”

“What matters for me is that we make decisions together, that we are coordinating everything we do in Afghanistan,” he said.

NATO plans to expand its presence in Iraq, Stoltenberg added.

“I strongly believe that the best way we can help to prevent ISIS terrorists from returning is by training the Iraqi forces, help them to fight the terrorists themselves,” he said.

— CNBC’s Matt Clinch contributed to this report.

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Eurozone Flash PMIs January 2020: Business activity shrinks again

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A man over 75 years receives a coronavirus (Covid-19) vaccine shot in Strasbourg, France.

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LONDON — Business activity in the euro zone fell to a two-month low in January, preliminary data showed on Friday, on the back of stricter coronavirus-related lockdowns.

The region is grappling with growing Covid-19 infection rates and tighter restrictions as new strains of the virus spread, causing further economic pain.

Markit’s flash composite PMI for the euro zone, which looks at activity across both manufacturing and services, dropped to 47.5 January, versus 49.1 in December. A reading below 50 represents a contraction in activity.

Chris Williamson, chief business economist at IHS Markit, said a double-dip recession for the euro zone was looking “increasingly inevitable.”

“Tighter COVID19 restrictions took a further toll on businesses in January,” he said in a statement.

“Output fell at an increased rate, led by worsening conditions in the service sector and a weakening of manufacturing growth to the lowest seen so far in the sector’s seven-month recovery.”

European Central Bank President Christine Lagarde acknowledged on Thursday that the pandemic still posed “serious risks” to the euro zone economy.

In addition to the new Covid variants, there are also concerns over a slow vaccination roll-out across the European Union.

“In this environment ample monetary stimulus remains essential,” Lagarde said. The ECB decided at a meeting on Thursday to keep interest rates and its wider stimulus programs unchanged for now, having boosted its support in December.

The ECB expects the euro zone’s GDP (gross domestic product) to expand by 3.9% in 2021, and 2.1% in 2022. This is after a contraction of 7.3% last year. However, these forecasts are dependent on the evolution of the pandemic.

France hires more

Earlier, France’s business activity data also came in at a two-month low, reflecting the imposition of stricter curfews across the country. The country’s composite PMI for January was 47, making a contraction.

However, French businesses hired more employees in January — the first increase in job figures in almost a year.

“The fact that firms have returned to recruitment activity points to some confidence in an economic recovery in the second half of this year,” Eliot Kerr, economist at IHS Markit said, in a statement.

In Germany, business activity managed to grow slightly in January, with the flash composite output index coming in at 50.8. However, the reading represented a seven-month low for Europe’s economic engine.

Phil Smith, associate director at IHS Markit, highlighted a slower momentum in manufacturing activity in the country, and a continued hit to the services sector during January.

“All in all, the German economy has made a slow start to the year, and the extension of the current containment measures until at least mid-February means this looks like being the picture for several more weeks to come,” he said.

The German government decided some days ago to extend the national lockdown until Feb. 14.

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Biden relief plan faces Republican, moderate opposition

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