EU plans €40bn in loans for Ukraine with out US | Invesloan.com

Good morning. Today we’re covering:

• US and Japan’s plans to curb exports to China’s chip industry

• Amazon’s return-to-office memo

• The president of Iran’s first press conference

But we begin with an exclusive story on EU plans to raise up to €40bn in loans for Ukraine without the US.

Brussels is preparing to provide the new financing by the end of the year regardless of US participation, after a G7 proposal to use frozen Russian assets to aid Kyiv faltered.

The unilateral push comes amid concern in Brussels that Hungary will prevent the bloc from delivering safeguards that the US needs for it to participate in the frozen assets scheme, according to three people involved in the talks.

The government of Viktor Orbán, the EU’s most pro-Russia leader, has sought to delay a decision on the frozen assets scheme until after the US presidential election on November 5.

But Brussels must start work on any alternative within the next few weeks since such a move would rely on powers that expire at the end of the year. Paola Tamma and Henry Foy have more on the draft proposal.

Here’s what else I’m keeping tabs on today:

• US interest rates: The Federal Reserve begins a two-day meeting at which it is widely expected to reduce interest rates for the first time since the pandemic. Here’s the latest on what the futures market is telling us about the outcome.

• Economic data: Retail sales are expected to indicate US consumers are cutting spending while a homebuilder confidence survey is expected to show a rise in sentiment on hopes an interest rate cut could improve housing affordability.

• Election 2024: US vice-president Kamala Harris will travel to Philadelphia for a conversation with the National Association of Black Journalists while Donald Trump appears in Flint, Michigan, at a town hall with voters a day after prosecutors filed charges against a man suspected of plotting to kill the former president.

• Book award: The Financial Times and Schroders Business Book of the Year shortlist is announced. Catch up on the longlist here.

Five more top stories

1. Exclusive: The US and Japan are close to a deal to curb tech exports to China’s chip industry despite alarm in Tokyo about Beijing’s threat to retaliate against Japanese companies. The new export controls include a measure forcing non-US companies to get licences to sell products to China that would help its tech sector. Read more on the discussions.

• US-China rivalry: The whole world risks losing from the competition between Washington and Beijing, writes Gideon Rachman.

2. Andy Jassy, Amazon chief executive, told staff yesterday in a memo that they must return to the office five days a week from the start of next year. Amazon also said it would end hot-desking and bring back assigned floor plans in its US buildings — although the practice will continue in Europe. Read Jassy’s memo “to strengthen culture and teams”.

• More technology news: TikTok urged a court yesterday to block a law that could ban the social media app, arguing such a move would be “staggering” for free speech in America.

3. Iran’s reformist president, Masoud Pezeshkian, has signalled a renewed openness to resuming nuclear negotiations with western nations and denied that his country had supplied ballistic missiles to Russia since he took office seven weeks ago. But in his first press conference with local and foreign media, he defended Tehran’s strong ties with the Kremlin.

Middle East conflict: Israel expanded its war objectives to include the northern front with Hizbollah at a cabinet meeting earlier today.

4. Exclusive: SURJ, the sports investment firm owned by Saudi Arabia’s Public Investment Fund, has entered the sale process for EuroLeague, as Europe’s top basketball competition seeks to sell a minority stake at a €1bn valuation. But the sports group would have to contend against private equity group BC Partners, which is also aiming to expand its sports portfolio.

5. Bank of America has poached Citigroup’s chief accounting officer Johnbull Okpara to act in the same position. Okpara resigned from Citi in early September without giving a reason for his departure, according to a regulatory filing. Okpara is replacing Rudolf Bless, who has been in that role at BofA for nearly a decade. 

• More banking news: Citigroup is stripping chief operating officer Anand Selva of his responsibility for a key piece of its compliance work, after the bank was fined $136mn by regulators this summer for reporting failures.

The Big Read

Netflix has staged a remarkable recovery since the “great correction” of 2022, after launching a crackdown on password-sharing and investing into ads, video games and live “experiences”. While traditional entertainment companies struggle to make money after pouring billions into streaming, Netflix has expanded its lead thanks to its strategic shift.

We’re also reading and listening to . . . 

• Electric vehicles: Asian EV battery makers have been one of the biggest beneficiaries of the Biden administration’s aggressive push for an EV transition. But investors in the region are on edge at the prospect of a Trump victory.

• Kamala Harris’s Nevada problem: Donald Trump is winning support among the Las Vegas service workers who could decide the US election.

• The Economics Show 🎧: Soumaya Keynes grills Jared Bernstein, US President Joe Biden’s top economist, on price caps, jobs and inflation.

Chart of the day

Volkswagen, Germany’s largest private employer, is facing a crisis brought on by slowing demand, high costs and tough competition from Chinese start-ups. Plans to close some German factories have unleashed angst among inhabitants in VW’s hometown, where it employs 60,000 people. Our reporter sends a dispatch from Wolfsburg.

Take a break from the news

Among the many experiences in modern working life that can provoke ire and irritation, the panel discussion elicits a particular form of dread. But fear not: Viv Groskop has proposed a recipe for success so that your next panel isn’t ruined by droning participants or egoistic chairs.

Additional contributions from Irwin Cruz and Benjamin Wilhelm