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ECB’s Benoit Coeure says a trade war would have ‘damaging’ consequences for the global economy



Benoit Coeure, executive board member of the European Central Bank (ECB).

Alex Kraus | Bloomberg | Getty Images

Benoit Coeure, executive board member of the European Central Bank (ECB).

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The ECB took the first step towards policy normalization in early March. The central bank dropped its easing bias — the indication that it could increase bond purchases in both duration and size, in case the economic outlook deteriorated.

The decision gave more confidence to markets that the bank is slowly putting an end to the stimulus in the region.

ECB President Mario Draghi said at the time: “Incoming information… confirms the strong and broad-based growth momentum in the euro area economy, which is projected to expand in the near-term at a somewhat faster pace than previously expected.”

The ECB said in March that it expects real gross domestic product (GDP) to hit 2.4 percent in 2018, 1.9 percent in 2019 and 1.7 percent in 2020. For now, the quantitative easing program will continue at the pace of 30 billion euros ($ 36.70 billion) per month until September.

However, recent developments on the euro could change the bank’s policy. The currency has been on an upward trend since the start of the year, raising fears it might get too strong and reduce the attractiveness of exports from the euro area.

Draghi said in March that the ECB is monitoring the exchange rate “with regard to their possible implications for the inflation outlook.”

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Payments giant Nexi working European Central Bank on digital euro



Italian payments giant Nexi says it is working with the European Central Bank on its proposed central bank digital currency.

“We are engaging with the European Central Bank and contributing to the design of the future digital euro because we believe that can be a positive force in the evolution of digital payments,” Nexi CEO Paolo Bertoluzzo told CNBC’s Karen Tso at the Money 20/20 fintech conference in Amsterdam on Tuesday.

The ECB outlined its plans for a digital version of the euro in July. The euro zone’s central bank envisages the currency as complementary to its existing monetary system, rather than replacing physical cash or reducing the role of commercial lenders.

An ECB spokesperson declined to comment.

Central banks around the world are actively working on or exploring their own central bank digital currencies, or CBDCs. It comes as cash use is increasingly on the decline in several developed economies, and amid growing interest in cryptocurrencies like bitcoin.

China is seen as the leading player in the race toward CBDCs, having tested its digital yuan currency with millions of citizens in a number of regions. Earlier this year, the U.S. Federal Reserve said it would soon release a research paper exploring the prospect of a digital dollar, while the Bank of England is also examining the potential of central bank-issued digital money.

Nexi’s chief said his company was helping to inform the ECB’s thinking on CBDCs.

“The situation will evolve because clearly there will be more to it,” Bertoluzzo said. “We’re starting to talk about a new version of cash. That’s the way they think about it.”

Bertoluzzo said digital currencies like bitcoin and ether were unlikely to play a role in cross-border payments, citing wild swings in the prices of such assets.

“They are clearly an asset class,” he said. “But they fluctuate up and down on a daily basis based on the latest statement from someone in Silicon Valley … which is exactly the opposite of what you need in payments. You need the certainty of the value you are exchanging.”

“Today those types of cryptocurrencies have basically zero impact in payments,” Bertoluzzo said, adding he thinks CBDCs and stablecoins designed to avoid volatility seen in other cryptocurrencies will play a much larger role.

With a market value of over $20 billion, Nexi is one of the biggest payment companies in the European Union. Last year, the firm signed two major acquisitions, agreeing to buy rivals SIA and Nets for a combined total of $14.5 billion. It competes for business in the electronic payments space with the Netherlands’ Adyen and France’s Worldline.

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Germany’s Angela Merkel remains popular around the world



Outgoing German Chancellor Angela Merkel in Germany’s federal parliament, or Bundestag, back in 2015.

Adam Berry | Getty Images News | Getty Images

As Germany’s long-serving chancellor, Angela Merkel, prepares to leave office after 16 years in power, global popular opinion of her remains overwhelmingly positive — a feat not often achieved by departing global leaders.

Polls of over 17,000 people in 16 advanced economies around the world from North America to Europe and the Asia-Pacific region, conducted by the Pew Research Center, found that public confidence in Merkel is high. In the surveys, 77% of respondents expressed confidence in Merkel to “do the right thing regarding world affairs,” while 79% overall had a favorable view of Germany.

“Majorities in nearly every public surveyed have confidence in Merkel to do the right thing in world affairs, including nine-in-ten in the Netherlands and Sweden,” Pew’s Janell Fetterolf and Shannon Schumacher said on the findings, which were based on surveys conducted from Feb. to May.

“Merkel has enjoyed generally high ratings in a number of countries since she first took office, with confidence growing as more people became familiar with her over time. In most places surveyed, trust in the German chancellor has never been higher,” they added.

Outgoing German Chancellor Angela Merkel with the then-US President Barack Obama on November 18, 2016 in Berlin.

Tobias Schwarz | AFP | Getty Images

Merkel currently enjoys the highest confidence ratings of the five world leaders asked about in the survey. She receives considerably higher marks than Russian President Vladimir Putin or Chinese President Xi Jinping, and Merkel also fares well compared with French President Emmanuel Macron and, in many places, U.S. President Joe Biden.

Positive views of Germany, mostly

The Pew polls, which did not include any data from Germany, show that the majority of people in Europe, North America and the Asia-Pacific region have very positive views of Germany, opinions only bolstered by the country’s apparently calm and collected approach to the Covid-19 crisis.

A median of 79% across 16 publics have a favorable opinion of Germany, while only 16% have an unfavorable one. Germany is also viewed more positively than the U.S. and China in most countries surveyed too.

In several of the European countries polled, Pew has gauged the level of favorable (or unfavorable) opinion toward Germany prior to Merkel taking office in 2006. It noted that in some countries like the U.K., Spain and France, views of Germany have not changed much over the past two decades.

“Roughly seven-in-ten or more have expressed a positive opinion of Germany in Sweden, the Netherlands, Spain, France and the U.K. in each year this question has been asked,” Pew noted.

In the last year or so, however, favorable views of Germany and Merkel have been influenced, at least in part, by perceptions of how Germany handled the coronavirus outbreak, it noted.

Outgoing German Chancellor Angela Merkel greets the crowds in Frankfurt, Germany.

Thomas Lohnes | Getty Images News | Getty Images

A median of 66% say Germany did a good job dealing with the outbreak, and again, Germany fares well in comparison with other countries and institutions.

“Germany’s coronavirus response is generally viewed more positively than the responses of the World Health Organization, China, the EU or the U.S. And people who think Germany has handled the outbreak well are much more likely to have a favorable view of Germany and confidence in Merkel in every public surveyed.’

No love from Greece

While Merkel has helped to steer Europe through several crises, from the euro zone’s financial crisis around a decade ago to the migration crisis of 2015 and more recently, the Covid pandemic, she is not universally liked.

Merkel has been accused by critics of ducking some tough decisions. such as the need to tackle climate change and the need for infrastructure spending in Germany, and she has also been accused of prioritizing Germany’s economic wellbeing at the expense of others in the euro zone.

Her pragmatic approach to global affairs, particularly those concerning finances, has not always won her friends.

This was no more obvious than in Pew’s findings in Greece, where only 30% of respondents had confidence in Merkel to do the right thing in global affairs and where only 32% had a favorable view of Germany.

Protesters demonstrate against the visit of Germany’s Chancellor Angela Merkel on April 11, 2014 in Athens, Greece.

Milos Bicanski | Getty Images News | Getty Images

Public dislike for Merkel is strong in Greece since the country’s sovereign debt crisis a decade ago, as Germany advocated that strict austerity measures should be imposed on Athens as a condition of international bailouts.

“On nearly every assessment, Greece stands out for its particularly negative views of both Germany and Merkel. Only around a third of Greeks have confidence in the German chancellor or a favorable view of Germany, though a majority give it good marks for its handling of the coronavirus outbreak,” Pew’s report noted.

Compared with other countries in Europe, more people in Greece said Germany has too much influence in the EU (86%) too.

Pew noted that negative views of Germany in Greece have been evident since it started surveying there in 2012, just after Greece received a second bailout in response to the European debt crisis and while tensions between the two countries were high.

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UK to accept UAE-vaccinated travelers after months on red list



Businessman walk past an Emirates Airbus A380 during the Dubai Airshow on November 18, 2013 in Dubai, United Arab Emirates.

Christopher Furlong | Getty Images

The U.K. will accept travelers vaccinated in the United Arab Emirates beginning Oct. 4, Transport Secretary Grant Shapps said Wednesday, reopening a popular travel route after months of deterring people coming from the UAE with costly and strict hotel quarantine requirements.   

“We will be accepting UAE vaccination certificates from 4th Oct following updates to their vaccination app,” Shapps said in a Twitter post. “As a major transport hub which is home to many British expats, this is great news for reopening international travel, boosting business & reuniting families.” 

The news comes as a relief to many in the expatriate-majority desert sheikhdom of 10 million, of which at least 150,000 are British citizens who were unable to visit their families since the U.K. put the UAE on a red list for travel last January. 

“I’m well chuffed about the idea of visiting my family and poorly grandad hassle free,” Amy Saraireh, a British national living in Dubai, told CNBC in response to the news.

The red list designation meant that travelers from the UAE — including British citizens and those who had been vaccinated in the UAE — had to quarantine for 10 days in a U.K.-government-designated hotel at a personal cost of nearly £2,000 if they wanted to enter the country.  

By spring, tens of thousands of people living in the UAE had signed a petition demanding the U.K. government change the travel designation, citing high Covid vaccination rates in the country. But the U.K. government resisted making changes, citing the UAE’s status as a popular travel hub as a risk, despite cases of the delta variant sweeping the U.K. at the time.

Dubai International Airport was ranked as the busiest airport in terms of passenger traffic in 2019, and the Dubai-London route was one of the most popular for Dubai’s flagship carrier Emirates Airline. 

The UAE has one of the world’s highest rates of vaccination against the coronavirus. The country’s vaccine drive has relied heavily on the Chinese-made Sinopharm vaccine, amid questions about the effectiveness of the shot compared to those made elsewhere. At the same time, breakthrough cases have surged among people vaccinated by American and European-made shots as well. 

It is unclear whether Sinpoharm-vaccinated travelers will fall into the same category as those vaccinated with U.K.-approved shots like those developed by Pfizer-BioNTech and Oxford-Astrazeneca.  

The change to the travel rules will come just after the start of Dubai’s flagship Expo 2020 event, which begins Oct. 1 and was postponed for a year due to the pandemic. It will carry on for six months, and the emirate hopes to attract 25 million visitors to the event, a year-and-a-half after Covid brought global mobility to a standstill. 

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