Business

FRANKFURT, Germany — German business confidence fell more than expected in November, a key survey showed Monday, amid political uncertainty following the collapse of the country's coalition government and Donald Trump's US election win.

The Ifo institute's confidence barometer, based on a survey of around 9,000 companies in Europe's struggling top economy, slipped 0.8 points to 85.7 points.

Analysts surveyed by financial data firm FactSet had forecast a more modest fall, to 86.0.

The survey comes as Germany heads for new polls in February following the collapse of Chancellor Olaf Scholz's coalition, and with businesses facing the threat of higher tariffs on exports to the key US market once Trump returns as president.

Philipp Scheuermeyer, economist at public lender KfW, said it was "no wonder" that the index had fallen.

"Donald Trump's election victory is likely to create new headwinds for the already hard-hit German export industry," he said.

"There is also the threat of a prolonged period until a new government is formed, during which German politics will hardly be able to react, let alone provide any stimulus."

The index had ticked up for the first time in months in October, in a rare piece of good news for the German economy, which has been battling a manufacturing slowdown and weak demand for a prolonged period.

November's fall was driven by a significant drop in businesses' assessment of the current economic environment while their expectations about the months ahead also fell, although less markedly.

Companies in the crucial manufacturing sector were more pessimistic about the months ahead although they viewed their current business situation as slightly better, it said.

The picture in both the service sector and construction industry worsened significantly, according to the survey.

In the area of trade the index ticked up, although Ifo president Clemens Fuest stressed that "sentiment among companies is still a long way off from being positive".

Germany was the only major advanced economy to shrink in 2023 and is on course to contract again this year.

Last week data showed the economy expanded just 0.1 per cent in the third quarter, and only narrowly dodged a recession.

•  Gov't to facilitate indirect spending, reduce trade balance deficit, attract investments, support purchasing power of citizens
• Shehadeh says economic measures, decisions taken since around 60 days aim to stimulate economic growth, overcome consequences of regional political turmoil
• He says government is committed to overcoming all obstacles, bureaucratic complications

AMMAN — Minister of State for Economic Affairs and Head of Government of Economic Team Muhannad Shehadeh stressed that the government has a realistic economic programme and a clear vision, and its decisions aim at achieving growth to be reflected on improving the quality of life and generating job opportunities, and sustainability based on the strategic approach of Economic Modernization Vision (EMV).

The meeting was attended by the Minister of Finance Abdul Hakim Shibli, and Minister of Government Communication and Government Spokesman Mohammad Momani, in addition to economic programmes' presenters, heads of economic departments and economic news editors, from various media outlets.

During the meeting, Shehadeh reiterates that economic measures and decisions, taken by the government since its formation of about 60 days, aim to stimulate economic growth and overcome the consequences of the political situation in the region and the world.

Shehadeh stressed that the government is also committed to overcoming all obstacles and bureaucratic complications, while balancing expenditures and money collection on one hand, and moving forward with major investment projects on the other hand, to reach the desired economic growth.

He pointed out that in order to reach that, it must be in line with the vision, which includes eight engines, 35 sectors and 360 economic measures related to its aspects and sectors.

He explained that achieving economic growth requires the government to facilitate indirect spending, reduce the trade balance deficit, attract investments and support the purchasing power of citizens, thus contributing to increasing the GDP, which currently amounts at JD36 billion.

He also pointed out that the government has already begun to facilitate spending through a number of measures and decisions it has taken related to customs, tax and princely funds, in order to provide indirect financial liquidity for citizens that can be injected into the local market to contribute to the revitalisation of economic activity.

He pointed out that the funds pending today with the customs and related customs revenues exceed JD300 million, stressing that the settlement of these issues will reflect on the money circulation in the economy.

Tourism

He explained that the government's decision regarding medical tourism, whether in terms of allowing nationalities to enter the Kingdom, or the opening of direct airlines, came with the aim of restoring momentum to this important service sector, calling on the private sector to exploit these facilities and work to attract expatriates for treatment purposes in the Kingdom.

Exemptions

He pointed out that the government's decision to exempt fees and fines on vehicles which their licenses have expired for more than a year amounting to more than 550,000 unlicensed vehicles, entailing JD332 million as fees.

Shehadeh also noted that the government's decision on the amended bylaw of exempting profits, of exports of goods and services, from income tax for the year 2024, came in line with the EMV to ensure the continued growth of the service sectors, especially the information technology sector, which represents one of the main drivers of the vision.

He stressed that the decision will also contribute to the revival of other service sectors, especially for engineers, lawyers, consultation, the information technology sector and others, and it is also part of the EMV to generate more job opportunities for Jordanians, explaining that the services sector constitutes 60 per cent of GDP.

He also praised the banking sector's step toward reducing interest by 4.99 per cent on housing loans for 3 consecutive years, after the government's decision, describing it as positive as it will stimulate other economic sectors.

Investments

He pointed to the major investment projects that will be implemented as part of the EMV, foremost of which is the "National Carrier", where the financial closure of the project during the next year will contribute to activate several economic sectors throughout the Kingdom and reflect on the development aspect.

He pointed out that the other project is the "Railway from Aqaba to Shidia and Ghor Al-Safi", which will contribute to reducing transport fees, raising the competitiveness and level of services and improving the performance of companies, in addition to being an integrated solution for the truck sector, expecting that the first quarter of next year will witness the signing of final agreements related to it.

Debt

He also addressed the issue of "indebtedness", stressing that the government is committed to manage the internal and external debt in "the best way", and there are many scenarios in this regard, including replacing part of the debt with soft loans and lower interest rates through the Kingdom's close and strong relationships with countries, in addition to the low interest rates in the world.

He stressed that His Majesty King Abdullah's recent meeting with Arab and foreign investors sends a strong message that investment in Jordan reflects high confidence in monetary policies, which are the backbone of investment and employers.

Budget

Finance Minister Abdul Hakim Shibli stressed that the budget is realistic, and the government is determined, despite the hard region circumstances, to reduce the deficit in the public budget as well as the public debt, in addition to securing budget allocations for the implementation of major projects, such as the national carrier and the railway.

He explained that the current budget has maintained all guarantees that concern citizens, especially with regard to subsidising bread, barley and gas cylinders.

Shibli added that the current budget increased the share of capital projects to JD1.469 billion.

He pointed out that the draft budget law estimated public revenues at about JD10233 million, of which JD9498 million are local revenues and JD734 million are external grants, indicating that the draft budget has set realistic estimates of revenues in a way that contributes to managing the development process efficiently.

Shibli explained that the budget draft included an increase in allocations for the National Aid Fund's (NAF) social protection network, and a 50 per cent increase in allocations for the University Student Support Fund, in addition to securing necessary allocations to support strategic food commodities, as well as indirect support for essential services and facilities in the fields of water, electricity, and health.

He pointed out that the government relied on a "Real Economic Growth Rate" of 2.5 per cent for the next year and a "Nominal Economic Growth Rate" of about 4.9 per cent during the formulation of the current budget, while maintaining moderate inflation rates, which would contribute to enhancing financial and monetary stability.

Regarding the "expenditure Items" in the general budget, Shibli indicated that the budget allocated at approximately JD11042 million, and capital expenditures at approximately JD1468 million, with an increase of 16.5 per cent compared to its re-estimated level for the current year 2024.

STOCKHOLM — Sweden's financially-strained electric car battery maker Northvolt announced recently the resignation of its CEO Peter Carlsson, hours after the company sought bankruptcy protection in the US while it reorganises its business.

Carlsson, who co-founded Northvolt and has led it since its inception in 2016, will "step aside from his role as CEO", the company said in a statement, adding that the search for a new chief executive was under way.

Northvolt announced late Thursday that it had applied for Chapter 11 bankruptcy protection in the United States to enable it to restructure its debt and reorganise its business.

The filing gave it access to "approximately $145 million in cash collateral", it said, while Swedish truckmaker Scania, a customer, pledged $100 million in new financing.

Swedish media reported the company had debts of $5.84 billion and just $30 million in available cash.

Northvolt said its operations would continue as normal during the reorganisation.

The company said in September it was slashing 1,600 jobs — a quarter of its staff — and suspending the expansion of its site as it struggled with strained finances and a slowdown in demand.

Northvolt has been seen as a cornerstone of European attempts to catch up with China and the United States in the production of battery cells, a crucial component of lower-emission cars.

Europe accounts for just three percent of global battery cell production, but has set its sights on 25 per cent of the market by the end of the decade.

The battery maker has also been plagued by production delays, which in May led car manufacturer BMW to drop an order worth 2 billion euros ($2.2 billion).

TOKYO — Bitcoin hit a record Thursday, topping $95,000 for the first time as it benefits from expectations that president-elect Donald Trump will push through measures to ease regulation of the unit.

The digital currency reached $95,004.50 in early Asian trade, with observers expecting it to soon reach $100,000.

Traders have been piling into the unit since Trump was elected at the start of the month, pushing it up almost 40 per cent since the vote.

The tycoon pledged on the campaign trail to make the United States the "bitcoin and cryptocurrency capital of the world," and to put tech billionaire and right-wing conspiracy theorist Elon Musk in charge of a wide-ranging audit of governmental waste.

Stephen Innes at SPI Asset Management said the surge has been "driven by mounting confidence that President-elect Donald Trump's administration will usher in a crypto-friendly era. Speculators rally behind the narrative, fueling a frenzy as the digital asset edges toward an unprecedented valuation".

AMMAN — The Jordanian Businessmen Association (JBA) and the Scottish Asian Business Chamber in Glasgow on Wednesday signed an agreement to establish a joint Jordanian-Scottish Business Council. 

The initiative seeks to bolster economic, investment and trade ties between the two countries.

The agreement was formalised during a meeting between the Jordanian economic delegation, currently visiting the United Kingdom, and representatives of the chamber, according to a statement issued by the JBA.

Abdulrahman Abu Tair, a JBA board member and head of the delegation, highlighted Jordan’s strategic location as a gateway to the Middle East, offering significant investment opportunities in sectors such as renewable energy, tourism, and technology.

He stressed the Kingdom's investor-friendly policies and extended an invitation to Scottish businesses to visit Jordan and explore potential partnerships.

Abu Tair also underscored the importance of fostering collaboration through private sector meetings, workshops, and knowledge-sharing initiatives, particularly in advanced technology and innovation, referring to the potential for enhanced cooperation in tourism.

JBA Director General Tareq Hijazi reviewed the association’s efforts to attract investments, including the signing of memoranda of understanding and the formation of business councils to promote partnerships globally. 

He said that Jordan-Scotland trade volume reached some JD68 million in 2023.

The council is expected to serve as a platform for deepening economic collaboration and exploring mutual opportunities.

RIO DE JANEIRO — Anti-poverty campaigners have hailed a decision by G20 leaders meeting in Rio to make sure the world's billionaires "are effectively taxed."

Getting the super-rich to cough up more in taxes has been a priority of left-wing Brazilian President Luiz Inacio Lula da Silva, who is hosting the summit of the world's biggest economies.

How much tax do billionaires pay? 

Lula, a former metalworker who grew up in poverty, complains that the super-rich pay proportionately much less tax than the working class.

A 2021 White House study showed that the wealthiest 400 billionaire families in the US paid an average federal individual tax rate of 8.2 per cent, compared to 13 per cent for the average taxpayer.

According to anti-poverty NGO Oxfam, the richest 1 per cent have accumulated $42 trillion in new wealth over the past decade

It says the richest one percent have more wealth than the lowest 95 per cent combined.

Increasing taxes on the wealthiest is also seen as a way to boost state coffers at a time of ballooning budget deficits and as developing countries seek huge amounts of funding to help them weather global warming.

"Tax the rich" has for years been a battle cry of the global left, while a group of US self-described Patriotic Millionaires have themselves called for higher tax bills.

In Rio, activists projected giant slides on buildings during the G20 summit marked "Tax the super rich for people and planet."

French economist Gabriel Zucman, an expert on inequality who authored a report on the issue for Brazil's G20 presidency, estimated that if the planet's 3,000 billionaires paid at least 2 per cent of their wealth in income tax each year, governments would rake in an extra $250 billion in revenue.

What did the G20 decide? 

Proposals for a minimum global income tax pushed by Brazil, Colombia, France, South Africa, Spain and the African Union have come to naught with the US and Germany among the naysayers.

In a move hailed as marking progress, however, G20 finance ministers in July for the first time agreed to "engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed."

On Monday, G20 leaders corroborated that decision in a statement with the same wording.

Zucman called it a "historic decision."

Oxfam Brazil said Lula had "lit a path toward a more just and resilient world."

But it warned that "real change" would only come about when countries increased taxes enough "to dramatically reduce inequality" and raise trillions of dollars towards fighting poverty and climate change.

In 2021, more than 130 countries agreed on a minimum tax for multinational companies, establishing that they should pay at least 15 per cent in taxes on their profits.

Is real change likely? 

With US President-elect Donald Trump returning to the White House in January, flanked by the world's richest man, billionaire Elon Musk, in a top role, chances of further progress appear slim in the medium-term.

The Forbes magazine billionaires list shows that 16 of the world's 20 richest people are US citizens.

Trump has pledged to slash rather than increase taxes.

Argentina's libertarian President Javier Milei, a fan of Trump, on Monday rejected the G20's tax proposals as well as their backing for greater state intervention to fight hunger.

He touted "free-market capitalism" as a panacea for poverty.

BAKU — Trillions of dollars are needed to make poorer nations more resilient to climate change, and studies have estimated that every $1 invested today will save at least $4 in future.

So why is it so hard to raise this money, and what are some of the innovative ways of going about it?

Wind over walls 

Developing countries, excluding China, will need $1 trillion a year by 2030 in outside help to reduce their carbon footprint and adapt to a warming planet, according to UN-commissioned experts.

This money could come from foreign governments, big lending institutions like the World Bank, or the private sector.

But some projects attract money more easily than others, said special climate adviser Avinash Persaud, to the president of the Inter-American Development Bank, a lender for Latin American and Caribbean nations.

For example, the private sector likes building solar farms and wind turbines because there's a return on investment when people buy the electricity.

But investors are much less interested in building defensive sea walls that generate no revenue, said Persaud, who hails from Barbados, and once advised the Caribbean nation's Prime Minister Mia Mottley.

"Unfortunately, there's no magic in finance. And so that does require a lot of public money," he told AFP on the sidelines of the UN COP29 climate summit in Azerbaijan.

Political jitters

But governments are limited in the amount they can borrow, he said, and reluctant to dip into their budgets for climate adaptation in poorer nations.

In the European Union, which is the largest contributor to international climate finance, major donors face political and economic pressures at home.

Meanwhile, newly-elected Donald Trump has threatened to pull the US, the world's largest economy, out of global cooperation on climate action.

This has posed enormous challenges at COP29, where nations are no closer to striking a long-sought deal to raise more money for developing countries.

"You're seeing the political landscape — governments are not getting elected to raise their aid budgets and send more money abroad," said Persaud.

Close the gap 

A defensive sea wall, for example, might not pay off for decades, making it difficult for debt-strapped countries to borrow enough money at reasonable rates to build it in the first place.

Persaud said development banks could help bring down the cost of borrowing, while new taxes on polluting industries like global shipping and coal, oil and gas could raise new money.

Such "innovative" schemes already exist, he said: in the United States, $0.09 of every barrel of oil goes into a fund to cover the cost of cleaning up a spill.

"Well, we're seeing a spill in the atmosphere... and maybe if we spread these things, make them global across fossil fuels, we could raise the money we need."

This could help poorer nations recover from disaster — known in UN parlance as "loss and damage" — something few investors go near, he said.

"If we can raise these levees — the solidarity levees — here and there, for those things that can't be funded any other way, then we can close that gap," he said.

'Science into finance'

Persaud conceded "none of this is easy".

"Raising the money is hard. Spending it well is hard. Getting it to the the people who need it most is hard," he said.

But $1 trillion was a realistic ask if underpinned by $300 billion in public finance — three times the existing pledge, he said.

Without "translating the science into finance", developing countries could not take the action necessary to help curb rises in global temperatures.

"If we don't get one, we don't get the other," he said.

BEIRUT, Lebanon — Lina al-Khalil has fled her south Beirut home to escape escalating Israeli attacks on Hizbollah, but she still returns daily to the bombarded area to keep the family business running.

"It's more important than my house," said the pharmacist, in her 50s, of the business she inherited from her father in Haret Hreik, a southern suburb of the Lebanese capital where Iran-backed Hizbollah militants hold sway.

Whenever the Israeli military issues a warning to evacuate before a strike — a near-daily occurrence for nearly two months — she closes down the shop and rushes out.

Despite the ever-present fear and the steep decline in business activity, Khalil does what she can to keep her business afloat, like many other shopkeepers in Beirut's southern suburbs.

The vast majority of the area's estimated 600,000-800,000 residents have fled, seeking refuge elsewhere.

"With the drop in customers, the financial impact has been severe," Khalil told AFP, adding that she has had to halve the salaries of her employees due to the pinch.

Khalil has moved most of the pharmacy's stock to her second home in the mountains for safekeeping.

To serve the few customers she still has, she drives up to collect the medicine they need, and even delivers it to their homes when they can't reach the pharmacy.

Some areas of south Beirut have been devastated by strikes since Israel intensified its campaign against the powerful Hizbollah movement on September 23, after nearly a year of limited cross-border clashes over the Gaza war.

'Hide-and-seek'

South Beirut grocer Mehdi Zeitar, in his 50s, has had to find a place to live after an Israeli strike destroyed his home.

For the time being, his vegetable stall has survived, but "all the surrounding buildings have been damaged", he said.

"We're playing hide-and-seek," Zeitar added bitterly, referring to Israeli attacks.

"We leave by car until the strikes are over, then we go home."

He comes in for two or three hours a day to run his shop, saying he has no other option to support his family.

But he told AFP that he spends much of his time waiting for customers, who never come.

"We are truly unemployed."

In a recent report, the World Bank estimated that the Lebanese commercial sector incurred losses of $1.7 billion over 12 months of conflict, on top of billions more in losses to the economy and material damage.

Lebanon had already been reeling since 2019 from an intense economic crisis that pushed most of the population into poverty.

According to the World Bank report, around 11 per cent of establishments in the conflict zones have been damaged, particularly in the southern areas of Tyre, Sidon and Nabatiyeh, where Israel's military campaign has targeted Hizbollah strongholds.

It said that the "displacement of both employees and business owners from conflict-affected areas" has led to a near-complete halt in business activity as well as "disruptions to supply chains to and from conflict districts".

Many consumers now buy only essentials, the report said.

Uncertain future 

When the war began in late September, Ali Mahdi and his brother shuttered their clothing stores and warehouse in Beirut's southern suburbs as well as in Tyre and Nabatiyeh, taking some of their merchandise with them.

They set up shop in several locations including Beirut's Hamra district, at a distance from the majority of the strikes.

But they still face many challenges there.

"There's the rise in rents, and the fears of residents in certain areas when it comes to renting to displaced residents from the southern suburbs and villages," said Mahdi, who is in his 30s.

With their future shrouded in uncertainty, "we're trying to clear our stocks," he said.

"We don't know whether to import new products or save our cash."

Mahdi added that he had to make some of his 70 employees redundant and dock pay from the rest.

In the southern suburbs, an Israeli strike turned the cafe Abdel Rahman Zahr El-Din had opened five years ago into a pile of rubble.

He said he must salvage what he can, now that he has lost his only way to make ends meet.

"There's nothing left but stones," he said as he inspected the upper floor, emerging with a small table in his hand, unharmed but covered in grey dust.