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EU leaders draw up battle lines for post-Brexit budget

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The Commission has suggested that the next package should be increased by about 10 percent but there was little sign on Friday that the governments with cash are willing to pay that.

“When the UK leaves the EU, then that part of the budget should drop out,” said Dutch Prime Minister Mark Rutte, who leads a group of hawks including Sweden, Denmark and Austria.
“In any case, we do not want our contribution to rise and we want modernization,” he added, saying that meant reconsidering the EU’s major spending on agriculture and regional cohesion in order to do more in defense, research and controlling migration.

On the other side, Czech Prime Minister Andrej Babis said his priorities were “sufficient financing of cohesion policy” a good deal for businesses from the EU’s agricultural subsidies.

German Chancellor Angela Merkel said there had been broad agreement that new priorities such as in defense, migration and research should get new funding and she called for a “debureaucratization” of traditional EU spending programmes.

Summit chair Donald Tusk praised the 27 leaders – Prime Minister Theresa May was not invited as Britain will have left before the new budget round starts – for approaching the issue “with open minds, rather than red lines”. But despite them all wanting to speed up the process, a deal this year was unlikely.

Although all agree it would be good to avoid a repeat of the 11th-hour wrangling ahead of the 2014-20 package, many sounded doubtful of a quick deal even early next year.

“It could go on for ages,” Rutte said. He added that it would be “nice” to finish by the May 2019 EU election: “But that’s very tight.”

Among the touchiest subjects will be accounting for the mass arrival of asylum-seekers in recent years. Aggrieved that some eastern states refuse to take in mainly Muslim migrants, some in the west have suggested penalizing them via the EU budget.

Merkel has proposed that regions which are taking in and trying to integrate refugees should have that rewarded in the allocation of EU funding – a less obviously penal approach but one which she had to defend on Friday against criticism in the east. It was not meant as a threat, the chancellor insisted.

In other business at a summit which reached no formal legal conclusions, leaders broadly agreed on some issues relating to next year’s elections to the European Parliament and to the accompanying appointment of a new Commission for five years.

They pushed back against efforts, notably from lawmakers, to limit their choice of nominee to succeed Juncker to a candidate who leads one of the pan-EU parties in the May 2019 vote. They approved Parliament’s plan to reallocate some British seats and to cut others altogether and also, barring Hungary, agreed to a Macron proposal to launch “consultations” with their citizens this year on what they want from the EU.

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FDA halts use of Johnson & Johnson Covid vaccine due to rare blood-clotting issues in six women

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April 13, 2021

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The Food and Drug Administration asked states on Tuesday to temporarily halt using Johnson & Johnson‘s Covid-19 vaccine “out of an abundance of caution” after six women in the U.S. developed a rare blood-clotting disorder.

“Right now, these adverse events appear to be extremely rare,” the FDA said in a joint statement with the Centers for Disease Control and Prevention. “COVID-19 vaccine safety is a top priority for the federal government, and we take all reports of health problems following COVID-19 vaccination very seriously.”

A White House spokesman referred CNBC to HHS when asked for comment.

All six cases occurred in women ages 18 to 48, with symptoms developing six to 13 days after they received the shot. Doctors typically treat that type of blood clot with heparin, but health regulators noted that could be dangerous in this case and recommended a different treatment.

J&J said in a statement that “no clear causal relationship” has been identified between the blood clots and the vaccine, adding it is working closely with regulators to assess the data.

People who receive the vaccine and “develop severe headache, abdominal pain, leg pain, or shortness of breath within three weeks after vaccination should contact their health care provider,” the FDA and CDC said.

After the news, first reported by The New York Times, shares of J&J were down 2.4% in premarket trading Tuesday.

The CDC will convene a meeting of the Advisory Committee on Immunization Practices on Wednesday to further review the cases, federal health regulators said Tuesday. The FDA is also investigating the cases.

J&J’s vaccine, like Pfizer’s and Moderna’s, received emergency use authorization from the FDA to start distributing the doses across the U.S. An EUA grants conditional clearance based on two months of safety data, pending another submission for full approval, which usually requires at least six months of data.

J&J submitted its Covid vaccine data to the FDA in February, and no specific concerns were identified at the time when analyzed by age, race and comorbidities, according to the agency. The FDA said at the time the most common side effects reported were headache and fatigue, followed by muscle aches, nausea and fever.

It’s unclear how the pause will impact J&J’s goal to deliver 100 million doses to the U.S. by the end of May. The company has already been plagued by manufacturing issues after a plant run by Emergent BioSolutions ruined 15 million doses of the vaccine.

Dr. Kavita Patel told CNBC on Tuesday she believes the FDA’s recommendation will likely have lasting impacts on the nation’s efforts to combat the pandemic.

“This is a devastating blow to this J&J vaccine effort in the United States,” Patel, a primary care physician in Washington, D.C., said in an interview on CNBC’s “Squawk Box.” Patel said the supply of the two-shot vaccines from Pfizer and Moderna won’t be able to quickly make up the demand created by the J&J pause. This will delay U.S. vaccination efforts, she added.

Last week, Europe’s medicines regulator said it found a possible link between the coronavirus vaccine developed by AstraZeneca and the University of Oxford and rare blood-clotting issues. AstraZeneca has not received authorization for use in the U.S.

Emer Cooke, executive director of the European Medicines Agency, said in a televised news conference last week that unusual blood clotting with low blood platelets would be added as a “very rare” side effect to the AstraZeneca vaccine’s product information, along with a slew of other possible adverse reactions.

Isaac Bogoch, an infectious disease specialist who has sat on several drug data and safety monitoring boards, noted J&J and AstraZeneca use the same platform for their vaccines. The J&J and AstraZeneca vaccines both use an adenovirus, a common type of virus that typically causes mild cold symptoms.

“Clearly we don’t have all the information and need to learn more about the mechanism and risk factors,” he told CNBC. “But of course we can’t sweep any potential adverse events under the rug and it needs to be investigated thoroughly.”

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CDU battle between Soeder and Laschet ahead of election

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April 13, 2021

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German Chancellor Angela Merkel gestures as she sits down for the weekly cabinet meeting on April 13, 2021 at the Chancellery in Berlin.

JOHN MACDOUGALL | AFP | Getty Images

LONDON — It was never going to be easy to find a successor to Angela Merkel, German chancellor for the last 16 years. But the race has just become even more complicated, with two rivals contesting the conservative ticket.

The obvious conservative candidate in the upcoming German election would be Armin Laschet, head of the North Rhine-Westphalia state. He was elected leader of Merkel’s CDU party in January and claims he wants to modernize Germany.

That was until Markus Soeder, from the Bavarian sister party, the CSU, threw his hat in the ring. Soeder is arguably the most popular man in German politics.

“It has always been clear that the race to Angela Merkel’s succession will be long and will not follow a straight line. It might not be a blockbuster movie but rather a binge-viewing-worthy political series,” Carsten Brzeski, chief economist at ING Germany, said in a note on Tuesday.

Party leader or Mr Popularity

When it comes to federal elections, the CDU and CSU act together — and so will only field one candidate.

CDU lawmakers will discuss who that should be on Tuesday and hope to come to a decision this week. But it will be a difficult choice between their party leader and someone as popular as Soeder.

Elisabeth Motschmann, a lawmaker for the CDU, told CNBC’s Squawk Box Europe on Tuesday that she supports Soeder.

“For this very hard job, I think that Markus Soeder will do his best and is able to win,” she said. “I don’t think that (Laschet) would be hard enough and he can’t decide like Soeder.”

Jens Suedekum, professor at Dusseldorf Institute for Competition Economics, told CNBC via email that, “what characterizes Soeder is his unique degree of flexibility, you may call it opportunism, when it comes to political principles.”

Christian Democratic Union (CDU) party chairman Armin Laschet (L) and State Premier of Bavaria and Christian Social Union (CSU) chairman Markus Soeder.

Pool | Getty Images News | Getty Images

Germany’s conservative party has seen its popularity fall since January, when the coronavirus pandemic began to worsen in the country.

It is finally set to harmonize lockdown rules in an effort to contain a third wave of cases. This comes after the population expressed frustration at how the rules have differed from region to region ever since the initial outbreak of the Covid-19.

Vaccination boost

But things could be about to look up for the conservatives.

“Once the CDU/CSU’s official election campaign starts in full force and vaccinations ramp up, things will look better for them,” Naz Masraff, director at consultancy firm Eurasia Group, said in a note on Tuesday.

However, she stressed that Laschet would likely have a more difficult time consolidating the CDU/CSU’s voter base and winning back centrist voters from the Green party.

Laschet’s candidacy would benefit the Greens and the Social Democrats. It would also increase the chances of a Green chancellor after September’s elections.

Naz Masraff

Director, Eurasia Group

“He will also have to work hard to change his image as a weak and equivocating leader who hasn’t taken as strong a line on the pandemic, or on corruption in the party’s ranks, as many Germans expected,” Masraff added.

Whoever the CDU chooses to be its running candidate could ultimately have an impact on what kind of coalition will emerge in September.

“Laschet’s candidacy would benefit the Greens and the Social Democrats. It would also increase the chances of a Green chancellor after September’s elections,” Masraff said.

The CDU/CSU are currently in the lead in the polls, with around 27% of the vote; the Greens, however, are gaining ground with around 21%. The party with the most votes will lead coalition negotiations after the September election.

What it means for markets

Christian Schulz, chief economist at Citi, told CNBC’s Squawk Box Europe on Tuesday that as the September election approaches, investors will be looking at what the new government could mean for fiscal policy in the euro area.

He said that both conservative candidates “say very little about what they want to do,” but added: “Soeder gets across has having more Eurosceptic instincts, so he would probably be the worst outcome for markets at least in the short term.”

The yield on the 10-year German bond has risen since Soeder’s announcement on Sunday, indicating some concerns over political uncertainty.

People sit in a park on a warm day with temperatures up to 23 degrees during the coronavirus pandemic on March 31, 2021 in Berlin, Germany.

Maja Hitij | Getty Images News | Getty Images

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SoftBank-backed Grab agrees to deal to go public in world’s largest SPAC merger

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April 13, 2021

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Southeast Asia’s ride-hailing giant Grab announced Tuesday that it’s set to go public through a SPAC merger with Altimeter Growth Corp., in a deal that values the company at $39.6 billion — the largest blank-check merger to date.

Grab says it intends to list on the Nasdaq under ticker symbol “GRAB” following the deal’s completion.

SPACs, or special purpose acquisition companies, are shell companies or blank-check companies set up for the purpose of raising capital to acquire private companies. A SPAC listing bypasses Wall Street’s traditional IPO process.

As part of the mega-deal, SoftBank-backed Grab will receive about $4.5 billion in cash, which includes $4 billion in a private investment in public equity (PIPE), managed by BlackRock, Fidelity, T. Rowe Price, Morgan Stanley’s Counterpoint Global fund and Singapore’s sovereign wealth fund Temasek. PIPEs are mechanisms for companies to raise capital from a select group of investors that make the final market debut possible through their financing.

Grab — most recently ranked No. 16 on last year’s CNBC Disruptor 50 list — delivers an array of digital services such as transportation, food delivery, hotel bookings, online banking, mobile payments and insurance services from its app. The Singapore-based company has operations throughout most of Southeast Asia, and serves more than 187 million users in over 350 cities across eight countries.

While SPACs have become a hot investment vehicle on Wall Street, they’re also gaining traction in Asia with six regional-focused SPAC companies that have collectively raised $2.7 billion thus far in 2021.

But in the first quarter this year, capital raised by blank-check firms like Altimeter has already outpaced 2020’s total issuance. It’s not only drawn the attention of the U.S. Securities and Exchange Commission, but also investors who are fearful of a market bubble.

Still, new deals continue to flood the market — more than 100 in March alone, according to SPAC Research.

While Grab’s merger remains record-setting, Boston-based biotech company Ginkgo Bioworks, ranked No. 44 on last year’s CNBC Disruptor 50 list, is said to be considering an equally-massive $20 billion blank-check merger of its own, according to Bloomberg.

Throughout the pandemic, Southeast Asia saw a surge in the use of digital services like e-commerce, food delivery and online payment. As many as 40 million people in six countries across the region — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand — came online for the first time in 2020, according to a report from Google, Temasek Holdings and Bain & Company.

Still, Covid-19 has forced regional private market decacorns (start-ups valued at more than $10 billion) to cut staff and rethink what will define a dominant “super app” suite of on-demand services. It’s also intensified the competitive landscape in an already saturated market that’s proven difficult to turn a profit.

After a period of intense and expensive competition by Uber to dominate rideshare in many markets, Indonesian rival Gojek sold its Southeast Asia business to Grab three years ago in return for Uber receiving a stake in the company.

In January, Reuters reported that Grab’s net revenue had grown 70% year over year, recovering to pre-pandemic levels with its ride-hailing business breaking even in all operating markets, including its largest, Indonesia.

Grab and Gojek were reportedly close to finalizing a merger of their own late last year.

Reuters reported that Gojek — which is ranked No. 10 on last year’s CNBC Disruptor 50 list — is now in advanced talks with Indonesian e-commerce leader Tokopedia for an $18 billion merger, ahead of a potential dual listing in Jakarta and the U.S.

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