Islamist militants kill 7 soldiers in Nigeria’s northeastern Borno state – sources

MAIDUGURI, Nigeria (Reuters) – Islamist militants killed seven Nigerian soldiers, including a commanding officer and a lieutenant, in northern Nigeria’s Borno state, a military source and two residents told Reuters on Friday.

The militants, who the sources said were with Islamic State West Africa Province (ISWAP), attacked a military outpost in Rann, in Kala Balge local government area of Borno state, in three trucks at roughly 1:30 am, firing sporadically for an hour. When the shooting stopped, the soldiers went into the town and were killed in an ambush, the sources said.

“Those that had hidden inside the town ambushed and killed the captain, lieutenant and five others soldiers,” the military source said.

A military spokesperson did not reply to calls or text messages seeking comment.

The Nigerian military has fought an Islamist insurgency in northeastern Nigeria for more than 12 years, launched by Boko Haram and joined later by its offshoot ISWAP, a regional affiliate of Islamic State. The United Nations estimates that the conflict had killed some 350,000 people by the end of 2020.

Last month, ISWAP killed a Nigerian army general and three soldiers in Borno state.

(Reporting by Maiduguri newsroom; Additional reporting by Camillus Eboh; Writing by Libby George; Editing by Peter Graff)

MailOnline’s editor Martin Clarke to stand down

LONDON (Reuters) – The editor of MailOnline, Martin Clarke, announced on Friday he will stand down after 12 years building the news website.

Clarke said he wanted to leave to “pursue new challenges”. He will step down from his job at the end of February, but will “remain available” to the company until the end of 2022, he said.

MailOnline is the news website of Britain’s Daily Mail newspaper and Clarke’s departure is the latest in a series of changes in top editors at the group, part of DMG Media.

DMG Media’s parent company DMGT also said last month that its founder, the Rothermere family, had agreed to the terms to take the company private.

(Reporting by Andrew MacAskill; Editing by Susan Fenton)

Portugal’s interior minister steps down after fatal accident

LISBON (Reuters) – Portugal’s Interior Minister stepped down on Friday nearly five months after his driver was involved in a car crash that killed a road worker while the government official was on the back seat.

Eduardo Cabrita, who joined Prime Minister’s Antonio Costa’s cabinet in 2015, when the Socialist party came to power, has been urged to resign since the fatal accident.

He repeatedly refused to do so, but on Friday, public prosecutors formally accused his driver of negligent homicide, saying that he was driving above the speed limit when he ran over the 43-year-old highway worker, who was a father of two.

“More than anyone else, I regret this tragic, irreparable loss,” Cabrita said in resignation speech. Earlier on Friday he told reporters he was “just a passenger” in the car involved in the crash.

Cabrita stepped down as Portugal prepares for a snap election next month called by the country’s president after the government failed to get parliamentary approval to pass its state budget bill.

During his time as head of the interior ministry, which oversees firefighters, police and the border services, Cabrita faced a series of scandals, including when a Ukrainian man was beaten to death by officers while in custody at Lisbon airport.

In another mis-step, Cabrita’s ministry in 2019 gave protective bandannas to the country’s firefighters that proved to be flammable. He became interior minister after wildfires in central Portugal killed more than 100 people.

“I assumed this role in a particularly difficult context for the country, in a real situation of national trauma,” he said on Friday. “Since then I have worked intensively to ensure Portugal is a safe country.”

Shortly after Cabrita stepped down, Prime Minister Costa told reporters he accepted the minister’s resignation and had communicated it to the president. He also thanked Cabrita for his work.

(Reporting by Catarina Demony; Editing by Barbara Lewis)

Ireland places limits on bars, home visits over Omicron fears

DUBLIN (Reuters) -The Irish government on Friday announced strict new limits on the hospitality sector and home visits to try to push down COVID-19 infection rates after officials said the new Omicron variant was likely to add to pressure on the health service.

Ireland has been reporting COVID-19 case numbers near record highs since early November, even though 91% of eligible people over the age of 12 are fully vaccinated.

The death rate has been far lower than during earlier waves and case numbers have stabilised. But health officials are concerned that even if Omicron does not evade vaccines, it could significantly increase already high infection numbers.

“If Omicron takes hold and if it is more transmissible, the potential for a very serious crisis is obvious,” Prime Minister Micheal Martin said in a televised address, saying that he had received “very stark” advice from health officials.

“The risk associated with proceeding into the Christmas period without some restrictions… is just too high,” Martin said.

Under the measures that will be in place from Tuesday until Jan. 9, indoor events will have to operate at 50% capacity, a measure promoters say will make concerts unprofitable.

Bars and restaurants, which have been subject to various levels of restrictions since the start of the pandemic, must not accept bookings for more than six people and must only offer table service, the government said.

People should only welcome visitors from a maximum of three other households to their home, it said.

Nightclubs, which opened for the first time in over 18 months in October, will have to close under the new rules.

“It is utterly devastating,” said Angela Dorgan, Chair of the National Campaign for the Arts lobby group, which has said restrictions during the pandemic have been unfair to the arts and nightlife.

Martin said the government would ensure that the entertainment sector had the necessary financial support.

(Reporting by Conor Humphries; editing by Jonathan Oatis and Barbara Lewis)

Blinken says Biden to tell Putin U.S. will stand up against aggressive actions

WASHINGTON (Reuters) – U.S. President Joe Biden will tell Russian President Vladimir Putin in their meeting that the United States is determined to stand resolutely against any reckless or aggressive actions that Russia may pursue and to defend the territorial integrity of Ukraine, Secretary of State Antony Blinken said on Friday.

Blinken told the Reuters Next conference that when the two leaders speak, Biden will also lay out to Putin the U.S. desire for greater predictability and stability in ties with Russia.

(Reporting by Humeyra Pamuk and Simon Lewis; Writing by Daphne Psaledakis; editing by Jonathan Oatis)

Researcher questions China’s population data, says it may be lower

By Jane Lanhee Lee

(Reuters) – China may be downplaying how fast its population is shrinking, and a recent policy to promote three-child families has poor chances to improve birth rates, a fertility expert told the Reuters Next conference on Friday.

Fuxian Yi, senior scientist in the obstetrics and gynecology department at the University of Wisconsin, said he estimated that China’s 2020 population was 1.28 billion rather than the 1.41 billion census number reported and that fertility rates were lower than reported. 

Yi estimates that China’s population has been shrinking since 2018.

China’s government did not immediately respond to a request for comment.

The country’s rapidly shrinking birth rate has raised concerns of slower economic growth and the potential challenges created by fewer workers supporting an older population.

Beijing scrapped its decades-old one-child policy in 2016, replacing it with a two-child limit to try to stave off those risks. In May a three-child policy was announced as the birth rates continued to drop given the high cost of raising children in Chinese cities.

Author and journalist Lenora Chu said the cost of education in China and the mental stress of exams to climb the education ladder were a challenge. “That’s partly why these family planning policies have to be paired with educational reform policies. Otherwise parents are just going to not want to have more children,” she told the Reuters Next conference.

Chu is the author of the 2017 book about China’s education system “Little Soldiers: An American Boy, a Chinese School, and the Global Race to Achieve.”

China had a fertility rate of just 1.3 children per woman in 2020, recent state data showed, on par with aging societies like Japan and Italy and far short of the roughly 2.1 needed for replacement level.

Yi estimates that the real fertility rate is much lower based on a drop in fertility rates over the years by China’s ethnic minority groups which were not restricted by the one-child policy, and he calculated the population based on his own lower estimate rates.

Yi said local governments overstate their population to obtain more subsidies, including education fees they collect from the central government. He said that with over 20 social benefits linked to a birth registration, some families were using the black market to buy a second birth certificate online.

“The population numbers have been inflated mainly for financial benefits,” Yi said.

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

(Reporting by Jane Lanhee Lee in Oakland, Calif.; Additional reporting by Beijing bureau; Editing by Matthew Lewis)

U.S. labor market tightening despite moderate November job gains

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. employment growth slowed considerably in November amid job losses at retailers and in local government education, but the unemployment rate plunged to a 21-month low of 4.2%, suggesting the labor market was rapidly tightening.

The four-tenths-of-a-percentage-point drop in the jobless rate from October reported by the Labor Department in its closely watched employment report on Friday occurred even as 594,000 people entered the labor force, the most in 13 months. Workers put in more hours, boosting aggregate wages, which should help to underpin consumer spending.

“Don’t be fooled by the measly payroll jobs gain this month because the economy’s engines are actually in overdrive as shown by the plunge in joblessness,” said Christopher Rupkey, chief economist at FWDBONDS in New York.

The survey of businesses showed nonfarm payrolls increased by 210,000 jobs last month, the fewest since last December. But the economy created 82,000 more jobs than initially reported in September and October, a sign of strength. That left employment 3.9 million jobs below the peak in February 2020.

Nonfarm payrolls: https://graphics.reuters.com/USA-STOCKS/gdvzymwrqpw/nfpr.png

Despite November’s slowdown in hiring, which also reflected a small gain in the leisure and hospitality industry, 6.1 million jobs have been added this year. Economists say the economy is very close to maximum employment, putting an early interest rate increase from the Federal Reserve on the table.

Fed Chair Jerome Powell told lawmakers this week that the U.S. central bank should consider speeding up the winding down of its massive bond purchases at its Dec. 14-15 policy meeting.

“The Fed will see the report as more than adequate to stay on course to accelerate tapering of asset purchases at the December meeting implying an end to purchases in March,” said Andrew Hollenhorst, chief U.S. economist at Citigroup in New York. “Moreover, an unemployment rate that is poised to fall below 4.0% perhaps in the coming months keeps a first Fed rate hike in June or even earlier firmly on the table.” Economists polled by Reuters had forecast that payrolls would advance by 550,000 jobs. Hiring continues to be hampered by worker shortages. There were 10.4 million job openings at the end of September.

U.S. stocks were trading sharply lower. The dollar rose against a basket of currencies. U.S. Treasury yields fell.

TIGHT LABOR SUPPLY

Employment growth was held back by a decline of 20,400 jobs in the retail sector. State and local government education employment fell by 12,600 jobs. That led to a drop of 25,000 in overall government jobs, the fourth straight monthly decrease.

Pandemic-related staffing fluctuations have distorted normal seasonal patterns in state and local government education. There have also been shortages of bus drivers and other support staff.

The leisure and hospitality sector added only 23,000 jobs compared to 170,000 in the previous month. Professional and business services payrolls increased by 90,000 jobs.

There were also solid gains in transportation and warehousing as well as in construction. Manufacturing employment increased by 31,000 jobs.

November’s modest job growth did little to temper expectations that the economy was poised for stronger growth this quarter after hitting a speed bump in the third quarter.

A measure of services sector activity scaled a fresh record high in November.

Consumer spending and manufacturing activity have been strong. Spending should remain supported by rising wages as companies scramble for scarce workers. Average hourly earnings increased 0.3%, keeping the annual increase in wages at 4.8%. The average workweek climbed to 34.8 hours from 34.7. As a result of the longer workweek, aggregate wages rose 0.7%.

But the spread of the new, highly contagious Omicron variant of COVID-19 poses a risk to the brightening picture. While little is known about the impact of Omicron, some slowdown in hiring and demand for services is likely, based on the experience with the Delta variant, which was responsible for the slowest economic growth pace in more than a year last quarter.

While labor supply remains tight, there are signs that some of the millions of Americans who lost their jobs during the pandemic-induced recession are wading back into the labor force.

The smaller survey of households, from which the unemployment rate is derived, showed the labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, was 61.8%. That was the highest level since March 2020 and was up from 61.6% in October. The workforce remains 2.4 million below it pre-pandemic level.

Labor market participation: https://graphics.reuters.com/USA-STOCKS/movanqkxxpa/participation.png

“If more people are starting to look for work again, this would allow for stronger near-term hiring,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.

The household survey also showed a rise of 1.136 million in the number of people employed. The employment-to-population ratio, viewed as a measure of an economy’s ability to create jobs, jumped to 59.2%, also the highest since March 2020, from 58.8% in October.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)

Boy who survived gondola crash returns to Italy after custody battle

JERUSALEM (Reuters) – A six-year-old boy, the sole survivor of an Italian cable car disaster who was kidnapped and taken to Israel by his grandfather, flew back to Italy on Friday night following a nearly three-month custody battle, the boy’s aunt said.

Israel’s Supreme Court this week rejected a request by Eitan Biran’s maternal grandfather to appeal previous court rulings which said the boy must be sent back to his paternal aunt in Italy. It ordered him returned by Dec. 12.

The child, who was born in Israel but moved to Italy with his family when he was one month old, had been living with the aunt since his parents, younger brother and 11 other people died when a gondola plunged to the ground in May in northern Italy.

Eitan “will now return to his normal life routine, with all medical, therapeutic and educational resources, to his neighbourhood friends and to school, to the community where he grew up, and to his beloved cat, Oliver,” his aunt said.

After his Supreme Court appeal was rejected, representatives of the grandfather said the family would continue its struggle legally to bring Eitan to Israel, adding he was being taken “to a foreign land, far from his roots and loving family.”

The grandfather and the aunt cannot be named due to Israeli court restrictions.

In September, while visiting Eitan, his maternal grandfather, without the aunt’s consent, drove him to Switzerland and chartered a private jet onward to Israel, triggering a cross-border custody battle.

The aunt petitioned the Israeli family court for his return to Italy. The court found that the grandfather’s actions amounted to kidnapping under the Hague Convention on the return of abducted children.

There was no immediate comment from his grandfather or his lawyer.

Last week, Cypriot police said they had arrested a man in connection with the alleged kidnap.

(Reporting by Rami Ayyub; Editing by Alistair Bell)

UK’s Sainsbury’s postpones Christmas parties due to Omicron emergence

LONDON (Reuters) -British supermarket group Sainsbury’s has postponed all Christmas parties until the new year, fearing the emergence of the coronavirus Omicron variant could lead to higher staff absence levels during the key festive trading period.

There have been 42 confirmed cases of the variant in Britain, which appears to be more transmissible, while tests continue to see whether it causes more severe disease or if vaccines are less effective against it.

Sainsbury’s is one of Britain’s biggest private sector employers with a staff of 189,000, trading from more than 600 supermarkets, over 800 convenience stores plus the Argos chain.

Chief Executive Simon Roberts said the group was doing everything it could to protect Christmas for all its colleagues and customers and keep everyone safe.

“As government guidance on face coverings changed on Tuesday, we have gone above and beyond to put safety first and have asked all of our colleagues to wear a face covering both on the shop floor and in all colleague areas,” he said in a statement.

“We have also asked all of our teams to postpone their celebrations until the new year and we will make sure that no one is out of pocket as a result of this decision.”

Roberts added that talks were held with the store employee representative group before the decision was made.

British retailers are already grappling with delays in international supply chains that are being compounded by labour shortages in domestic transport and warehousing networks, with a lack of heavy goods vehicle (HGV) drivers particularly acute.

The UK government’s current guidance is that there is no need for people to cancel Christmas parties.

However, messages from ministers have been mixed.

On Thursday science minister George Freeman told BBC radio companies should reconsider holding large parties, while on Wednesday Therese Coffey told ITV’s Peston programme:“I don’t think there should be much snogging under the mistletoe.”

(Reporting by James Davey; Editing by Andrew MacAskill and Emellia Sithole-Matarise)

N.Macedonia says goodbye to 45 killed in Bulgaria bus crash

MORANE, North Macedonia (Reuters) – Hundreds of mourners gathered in a Macedonian village cemetery in a cold rain on Friday to lay to rest 10 local inhabitants including eight schoolchildren who were among 45 people killed in a bus crash in Bulgaria.

    The bus, carrying tourists back to North Macedonia after a weekend trip to Istanbul, caught fire on a highway in the early hours of Nov. 23. All victims have been identified as ethnic Albanians from North Macedonia.

    Human error was probably the main cause of the accident, Bulgarian investigators said.

    Green coffins containing 10 victims were lowered into the ground at the Morane village cemetery – all four children of Enver Jahi, his wife, his sister-in-law and her two children, and two children of one of Jahi’s sisters – all from Morane.

    Arlinda Vlashi, a teacher to Omer Jahi, 11, who was buried next to his three siblings and their mother, came to pay her respects. “How can I go to class now when I don’t see him?” she said tearfully.

“I was Omer’s new teacher when he started sixth grade (in September). He was a very nice boy, very wise, very polite and he was learning quickly.”

    Enver Jahi, who did not go on the trip to Istanbul because he had to run the family restaurant, stood weeping in the rain as the caskets were buried, followed by an imam’s prayers.

    “This was very bad news for us. Not only for me but for the entire village,” said Nuredin Bajrami, a neighbour of the Jahi family. “We knew them very well, they also had a restaurant and people visited them very often. They were very good people.”

The bodies of the other crash victims arrived in two Bulgarian military planes on Friday afternoon at the airport of North Macedonia’s capital Skopje. They were buried at various cemeteries across the Balkan country during the afternoon.

(Reporting by Fatos Bytyci; Writing by Ivana Sekularac; Editing by Mark Heinrich)

Canada still has time to act before U.S. vote on disputed EV tax credit – trade min

By David Ljunggren

OTTAWA (Reuters) – Canada still has some room for maneuver before the U.S. Senate votes on a proposed electric-vehicle tax credit for American manufacturers, a measure Ottawa opposes, Trade Minister Mary Ng said on Friday.

Ng, speaking by phone from Washington after three days of lobbying against the measures, reiterated that Canada would “respond accordingly” if the credit were implemented.

Canada fears the credit will undermine its own efforts to produce electric vehicles in Ontario – the country’s industrial heartland – and also undermine the integrated North American auto industry.

“What I learned is that we do have some runway,” said Ng, who met several senators and union representatives.

“Senators said to me ‘Let me look into this a little further, let me do a little bit more research,'” she said. “This, of course, is not going to be solved overnight. There is a lot of work to do.”

Some senators did not appear to know that the proposed credit violates the United States-Mexico-Canada continental trade pact, Ng said. The White House says this is not so.

Legislators are considering a new $12,500 tax credit that would include $4,500 for union-made U.S. electric vehicles.

Ng said she had stressed that the measure was harmful and would affect hundreds of thousands of Canadian jobs. If it is enacted, “we will respond accordingly”, she said, but did not give details.

In previous trade disputes between the two close neighbors and trading partners, both sides have slapped sanctions against a wide range of goods.

Earlier this month Prime Minister Justin Trudeau failed to convince U.S. President Joe Biden to scrap the credit, which is also opposed by a range of nations.

Mexico is analyzing a range of legal actions in response that may include tariffs, the economy minister said on Thursday.

(Reporting by David Ljunggren; Editing by Dan Grebler)

Cathie Wood’s ARK Innovation fund hits 13-month low in tech selloff

By David Randall

NEW YORK (Reuters) – Star stock picker Cathie Wood’s ARK Innovation ETF tumbled more than 7% and hit its lowest level since November 2020 on Friday as bets on a more aggressive Federal Reserve pushed investors to sell the high-growth, high-valuation stocks that rallied during the early stages of the pandemic.

The declines in ARK’s portfolio were widespread, with nine out of its 10 top holdings falling as a selloff in technology stocks pushed the benchmark S&P 500 down 1.3%. Tesla Inc, its largest holding, shed nearly 4%, while Teladoc Health Inc, its second-largest holding, dropped 5.2%.

ARK, whose outsized holding of so-called stay at home stocks helped it outperform all other U.S. equity funds last year, is down 25% over the last month. Those declines have come as investors increasingly anticipate that the Federal Reserve could raise interest rates in the year ahead, which would weigh on growth stocks by discounting their future cash flows.

Friday’s declines may have been bolstered by a U.S. employment report showing that the U.S. economy added 210,000 jobs last month, pushing the unemployment rate to a 21-month low of 4.2%.

“Ultimately the lower unemployment rate could help build confidence that the economic growth we’ve been seeing will continue regardless of what happens with Omicron, and that will push investors out into small-caps and cyclicals instead of the stay at home and technology trades,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank is open to accelerating the pace of its tapering program, essentially removing its support of the economy faster than it originally anticipated.

Friday’s declines pushed the ARK Innovation fund down 24.5% for the year to date, well behind the roughly 20% gain in the benchmark S&P 500 over the same time.

Roku Inc, for instance, dropped 4.1% Friday, leaving it down nearly 40% for the year to date, while Spotify Technology SA fell 1.4%, leaving it down 28.3% for the year to date.

ARK Invest did not respond to a request for comment for this story.

(Reporting by David Randall in New York; Editing by Matthew Lewis)

In Europe, Omicron ruins Christmas party plans

By Richard Lough and Iain Withers

PARIS (Reuters) – Paris riverboat cruise company Seine-En-Bateau was braced for a bumper Christmas party season reminiscent of the world before COVID-19. But that was before the Omicron variant landed.

Since the beginning of the week, co-owner Pascale Ben Soussan has fielded one cancellation after another as companies either abandoned their party plans or postponed them to a later date.

“It came out of nowhere. A wave of panic is sweeping through,” Ben Soussan told Reuters. Half of the company’s December bookings have already been wiped out, she said.

Much remains unknown about Omicron. It has gained a foothold in Asia, Africa, the Americas, the Middle East and Europe, where a fifth wave of the pandemic and surging infection numbers are fast draining any sense of festive cheer.

Evan as scientists race to understand how contagious and virulent the Omicron variant is, the experience of Seine-en-Bateau illustrates how companies are acting even before policy-makers in some countries impose new curbs.

The increasingly cautious mood deals a blow not just to bars and restaurants, but the wider entertainment industry.

Ben Soussan said Seine-en-Bateau charges tens of thousands of euros for a full-blown party for several hundred people. “It’s the whole chain that is impacted: caterers, DJs, magicians, interior decor workers.”

ANXIOUS COMPANIES

An increasingly bleak picture is emerging across Europe.

Highlighting the risks, Norwegian authorities said 13 people had been infected with the Omicron variant following a corporate Christmas party in Oslo.

British supermarket group Sainsbury’s said it had postponed all Christmas parties until the new year while JPMorgan cancelled its annual festive carols reception in London, citing the pandemic. JPMorgan also said it was postponing indefinitely its year-end party in Paris.

Deutsche Bank has told its London staff they can hold small gatherings at the individual team level, with a negative lateral flow test required. Asset manager Schroders and the City of London Corporation which runs London’s historic financial district also asked guests to take rapid tests before attending particular festive events.

“Are companies willing to take responsibility for the welfare of their employees or do they think the risk is acceptable?” said one manager at a consultancy in London, who declined to be named to avoid identifying their employer.

British Prime Minister Boris Johnson has repeatedly insisted people should not cancel their holiday celebrations, though senior health official this week said people should not socialise unless necessary.

French President Macron is convening senior ministers for a COVID-19 ‘defence council’ on Monday but has so far made clear he favours accelerating vaccine boosters over curbs. The German government has not yet issued any recommendations for the festive period.

In Germany, nine out of 10 restaurants and event locations had reported Christmas party cancellations by mid-November, according to hospitality body Dehoga. It estimates nearly half of Christmas parties have been called off so far.

Back in Paris, singer and DJ Severine Nells said her December, which two weeks ago was set to be as busy as in 2019, was fast unravelling as last minute cancellations came in. Clients were also heaping doubt on provisional January bookings.

“I was supposed to be working tonight. But (the client) pulled out two days ago,” Nells said. “It’s the companies making the decision because they’re afraid.

(Reporitng by Richard Lough in Paris and Iain Withers and Carolyn Cohn in London; additional reporting by corporate finance teams, Gwenaelle Barzic in Paris and Klaus Lauer and Rene Wagner in Berlin; Editing by Emelia Sithole-Matarise)

EU gives first nod to disbursement of 10 billion euros to Spain under recovery plan

BRUSSELS (Reuters) – The European Commission said on Friday it had given preliminary approval to the disbursement of 10 billion euros ($11.3 billion) in grants to Spain under the EU recovery plan.

The disbursement is part of the European Union’s wider, 27-nation plan to support the recovery of the European economy from the slump caused by the coronavirus pandemic.

It was the first time the EU Commission had given a positive assessment for grants under the recovery plan, after the disbursement of the first tranches of payments as pre-financing, which are one-off, initial funds released under less stringent conditions.

Under the recovery plan, Spain is entitled to receive nearly 70 billion euros in grants, of which 9 billion have already been disbursed as pre-financing.

The unlocking of the funds is conditional on beneficiary countries taking concrete steps towards a greener, more digital economy.

The new grant would need to be definitively approved after discussions with representatives of EU states.

($1 = 0.8843 euros)

(Reporting by Francesco Guarascio; Editing by Mark Heinrich)

Ukraine uses Turkish drones in Donbass conflict zone, Putin tells Erdogan

MOSCOW (Reuters) – Ukraine is using Turkish-made drones in the conflict zone in the Donbass region, sticking to “destructive” behaviour, Russian President Vladimir Putin told his Turkish counterpart Tayyip Erdogan on Friday, the Kremlin said.

Relations between Russia and Ukraine are in the spotlight as Kyiv says Russia amassed thousands of troops near the Ukrainian border and may be gearing up for a military offensive. Moscow denies plans for an offensive operation.

In a phone call, Putin told Erdogan that Ukrainian forces are carrying out “provocative activity” and are using Turkish-made Bayraktar drones in the conflict zone in a further attempt to undermine Minsk peace accords, the Kremlin said.

Turkey’s communications directorate said on Friday Ukraine was one of the issues which Erdogan discussed with Putin, but did not provide further details.

Ukraine has bought and deployed Turkish drones in the war against Russian-backed forces in its eastern Donbass region, angering Russia.

Turkish Foreign Minister Mevlut Cavusoglu has said Turkey cannot be blamed for Ukraine’s deployment of Turkish-made drones.

In October, Russia accused Ukraine of destabilising the situation after government forces used a Bayraktar TB2 drone to strike a position controlled by Russian-backed separatists.

Ukraine used the Bayraktar drone “for one tidy shot” at a gun system, and since then enemy soldiers are afraid of doing duty at such systems as they understand “how this could end,” Ukraine’s defence minister Oleksii Reznikov said on Friday.

He also said Russia has amassed more than 94,000 troops near Ukraine’s borders and may be gearing up for a large-scale escalation at the end of January.

Russia-backed separatists have been fighting government troops in Ukraine’s Donbass region since 2014, soon after Russia seized the Crimea peninsula from Ukraine. Kyiv says at least 14,000 people have been killed.

(Reporting by Andrey Ostroukh; additional reporting by Natalia Zinets in Kyiv and Daren Butler in Istanbul; Editing by Alison Williams and Barbara Lewis)

U.S. government could miss payments as soon as Dec. 21 – think tank

By Jason Lange

WASHINGTON (Reuters) – A bipartisan think tank warned on Friday the U.S. government could start missing payments on its bills as soon as Dec. 21 if Congress fails to raise the debt limit, as top Democrats and Republicans sought a path around such a financial calamity.

The Bipartisan Policy Center’s projection, based on updated official data on tax receipts and government spending, underscores the mounting pressure on President Joe Biden’s Democratic Party to find a way to raise the statutory $28.9 trillion debt limit and avoid the heavy economic repercussions that could come with missed payments.

Congressional leaders including Senate Majority Leader Chuck Schumer and his Republican counterpart, Mitch McConnell, are now exploring the possibility of linking the debt ceiling to the National Defense Authorization Act (NDAA), according to a person familiar with the matter.

The annual defense policy bill, which has become law for 60 straight years, is widely expected to pass despite recent procedural hurdles.

Leaders of both parties are looking at whether attaching a debt ceiling measure to the NDAA could help overcome partisan differences that raised concerns about a possible default earlier this year, the source said.

But congressman Kevin McCarthy, the top Republican in the House of Representatives, rejected the NDAA approach on Friday as a Democratic “gimmick” bound for failure.

“I don’t think it would pass,” McCarthy said at a news conference. “I think it would fail. I really do.”

Congress passed legislation on Thursday to fund the government through mid-February, averting the risk of a partial government shutdown for now. But the task of bridging partisan differences over the debt limit could prove more difficult and pose risks that are far more severe.

“Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit,” said Shai Akabas, the Washington-based Bipartisan Policy Center’s director of economic policy.

If upcoming tax receipts are favorable, the center projected, the debt ceiling could become binding as late as Jan. 28.

On Tuesday, the nonpartisan Congressional Budget Office said the Treasury Department could start missing payments by the end of the month, while Treasury Secretary Janet Yellen said Washington can likely keep paying all its bills through at least Dec. 15.

Once the Treasury Department hits its borrowing limit, it will only have incoming tax receipts to pay its bills. And because it borrows nearly 40 cents for every dollar it spends, the Treasury would start missing payments owed to lenders, citizens or both.

Shock waves would ripple through global financial markets. Domestic spending cuts would push the U.S. economy into recession as the government misses payments on everything from Social Security benefits for the elderly to soldiers’ salaries.

Biden’s Democrats hold razor-thin majorities in both houses of Congress, but Republicans have vowed not to cooperate on the debt ceiling, which could stymie attempts to lift borrowing limits under normal legislative rules.

In the Senate, Schumer has demanded a “bipartisan” solution that would require Republicans to cooperate by allowing a debt ceiling measure to reach the floor. Republicans insist that Democrats use a more time-consuming legislative process known as “reconciliation” to raise the debt ceiling on their own.

Another sticking point is how to address the borrowing limit. Republicans want Democrats to raise the ceiling to a higher dollar amount, which they could then attack in 2022 congressional election ads. Democrats want to avoid a dollar amount by simply suspending the limit.

Discussions about using defense legislation to break the impasse remain at an early stage, according to the source, who said it was not clear how much traction such an approach would garner among rank-and-file lawmakers from either party.

(Reporting by Jason Lange; additional reporting by David Morgan; Editing by Scott Malone, Alistair Bell and Diane Craft)

Europe surpasses 75 million COVID-19 cases amid spread of Omicron

By Aparupa Mazumder and Rittik Biswas

(Reuters) – Europe crossed 75 million coronavirus cases on Friday, according to a Reuters tally, as the region braces for the new Omicron variant at a time when hospitals in some countries are already strained by the current surge.

Over 15 countries in Europe have reported confirmed cases of the new variant that has rattled financial markets. The European Union’s public health agency said on Thursday that the Omicron variant could be responsible for more than half of all COVID-19 infections in Europe within a few months.

Even before the discovery of Omicron, Europe was pandemic’s epicentre with 66 out of every 100 new infections each day coming from European countries, according to a Reuters analysis.

Eastern Europe has 33% of the total reported cases and about 53% of the total reported deaths in Europe. It makes up 39% of the region’s population.

The United Kingdom has so far reported the highest total number of coronavirus cases in the region followed by Russia, France and Germany.

The Reuters data shows the pace of the pandemic has picked up speed in the second half of 2021. Europe has reported highest daily average of 359,000 new cases in second half as compared with highest daily cases of about 241,000 a day in the first half of the year.

It took 136 days for the European region to go from 50 million cases to 75 million, compared with 194 days it took to get from 25 to 50 million while the first 25 million cases were reported in 350 days.

To deal with that surge, several European governments reimposed limits on activity, ranging from Austria’s full lockdown to a partial lockdown in the Netherlands and restrictions on the unvaccinated in parts of Germany, the Czech Republic and Slovakia.

Vaccine hesitancy is a global phenomenon, but experts say central Europeans may be particularly sceptical, decades after the collapse of Communist rule eroded public trust in state institutions.

In Latvia, one of the least vaccinated countries in the EU, bodies at the morgue ended up stacked on top of each other, unclaimed for days, as relatives fight queues at cemeteries to bury them. Hospitals in the Czech Republic, where only 62% of the population has gotten at least one dose, are strained by the number of COVID patients.

Germany’s air force has transferred COVID patients from full hospitals to others within the country using “flying intensive care units.”

In Ukraine, where only 30% have gotten at least a first dose, the average number of COVID deaths a day recently set records.

(Reporting by Aparupa Mazumder, Rittik Biswas and Anurag Maan in Bengaluru; Additional reporting by Lasya Priya M; Graphics by Anurag Maan; Editing by Lisa Shumaker)

Vaccine makers could make Omicron-specific booster, says Fauci

By Ahmed Aboulenein and Jeff Mason

WASHINGTON (Reuters) -COVID-19 vaccine makers have contingency plans to deal with the Omicron variant that include a combination vaccine against the original version and the variant as well as a variant-specific booster dose, a top U.S. health official said on Friday.

The U.S. government is working with Moderna, Pfizer, and J&J on multiple contingency plans, infectious disease expert Anthony Fauci told reporters at a White House briefing.

“One is to rev up the production of the vaccines that they already have. The next is to make, for example, a bivalent, where you have the vaccine against both the ancestral strain and the new variant, and the other is to make a variant-specific boost,” said Fauci.

“They are now assuming they may have to do that and are being prepared for that,” he added.

Data from a National Institutes of Health study strongly suggest that existing boosters provide cross protection against a number of variants, including Omicron, Fauci said.

“Although we haven’t proven it yet, there’s every reason to believe that if you get vaccinated and boosted that you would have at least some degree of cross protection, very likely against severe disease, even against the Omicron variant.”

The U.S. Centers for Disease Control and Prevention is working with local authorities to investigate suspect cases of the Omicron variant in states other than those where cases have already been reported, Director Rochelle Walensky said at the briefing.

There have been cases of Omicron detected in about 40 countries, she said, but the Delta variant remains the dominant strain in the United States.

“I know that the news is focused on Omicron. But we should remember that 99.9% of cases in the country right now are from the Delta variant. Delta continues to drive cases across the country, especially in those who are unvaccinated,” she said.

(Reporting by Ahmed Aboulenein and Jeff Mason; Additional reporting by Doina Chiacu; Editing by Rosalba O’Brien and Dan Grebler)

Vietnam, Taiwan exceed U.S. Treasury currency thresholds, but no manipulator labels

By David Lawder and Andrea Shalal

(Reuters) -Vietnam and Taiwan again exceeded the U.S. Treasury’s thresholds for possible currency manipulation and enhanced analysis under a 2015 trade law, but the department on Friday refrained from formally branding them as manipulators.

Switzerland also narrowly escaped triggering all three manipulation criteria in the Treasury’s latest semi-annual currency report, thanks to revised, broader measurements for trade and current account surpluses and foreign exchange market interventions.

All three had tripped the Treasury’s thresholds in April https://www.reuters.com/business/us-says-vietnam-switzerland-taiwan-violate-currency-thresholds-2021-04-16 prompting more intensive U.S. engagement to revise their practices. Former President Donald Trump’s administration had branded Vietnam and Switzerland as manipulators in December, invoking a 1988 currency law.

In the latest report, the Treasury found that no major trading partners during the year through June 2021 sought to manipulate their currencies for a trade advantage or for preventing effective balance of payments adjustments.

The department said it would continue to work with Vietnam and Taiwan to address U.S. concerns. For Switzerland, which tripped only the trade and foreign exchange intervention thresholds, the Treasury said it would continue to conduct an in-depth analysis of the alpine country’s practices for another year.

Switzerland was moved to the Treasury’s “Monitoring List” of major trading partners that merit close attention to their currency practices, along with 11 other countries that remained on the list: China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico.

Treasury said it was “satisfied with progress made by Vietnam to date” and would continue engagement started in May with Taiwan.

“This engagement includes urging the development of a plan with specific actions to address the underlying causes of currency undervaluation and external imbalances,” Treasury said of the Taiwan engagement.

The United States in July dropped a threat to impose tariffs on Vietnamese goods after the country’s central bank agreed with the U.S. Treasury https://www.reuters.com/world/asia-pacific/us-trade-agency-drops-tariff-threat-against-vietnam-over-currency-practices-2021-07-23 to refrain from manipulation and make its exchange rate practices more transparent. The deal followed a Reuters report https://www.reuters.com/article/us-vietnam-forex-intervention-exclusive-idUSKBN2AB1I4 that Vietnam had sought to shift its spot dollar purchases to forward purchase contracts with banks to evade the Treasury criteria.

MUTED REACTION

The Treasury’s latest report did not spark any significant immediate moves in the Taiwan dollar, the Vietnamese dong or the Swiss franc.

A Taiwanese central bank official said discussions with Washington would continue but blamed Taiwan’s large trade deficit with the United States on strong demand for technology products fueled by the COVID-19 pandemic and production shifts prompted by U.S. tariffs on Chinese goods.

Switzerland’s finance ministry repeated its longstanding denial that the country’s central bank engages in manipulation of the franc for an economic advantage.

“Foreign exchange interventions are necessary for Swiss monetary policy in order to maintain appropriate monetary conditions and thus price stability,” the ministry said in a statement.

CHINA

The Treasury report criticized China’s lack of transparency in its foreign exchange practices, citing a wide discrepancy between the People’s Bank of China’s foreign exchange assets and net foreign exchange settlement data, suggesting that state- owned banks were being used to conduct official interventions.

“Treasury will continue to closely monitor China’s use of exchange rate management, capital flow, and macroprudential measures and their potential impact on the exchange rate,” it said in the report.

A Reuters analysis in June https://www.reuters.com/world/china/chinas-banks-are-bursting-with-dollars-thats-worry-2021-06-01 found that Chinese banks had amassed over $1 trillion amid little official PBOC intervention, posing a risk to the government’s ability to control the yuan exchange rate.

Treasury Secretary Janet Yellen told the Reuters Next virtual conference on Thursday that she would continue to engage https://www.reuters.com/markets/rates-bonds/yellen-says-cutting-some-tariffs-chinese-goods-could-ease-price-pressures-2021-12-02 her Chinese counterpart, Vice Premier Liu He, on foreign exchange policy issues.

NEW GOALPOSTS

In the second currency report issued by the Biden administration, the Treasury also adjusted the three manipulation thresholds under the 2015 law to include somewhat broader measures of trade surpluses, foreign exchange interventions and current account surpluses.

A Treasury official said Switzerland would have exceeded the old current account surplus threshold, and narrowly missed exceeding the new one.

“Treasury is working relentlessly to promote a stronger and more balanced global recovery that benefits American workers, including through close engagement with major economies on currency-related issues,” Yellen said in a statement accompanying the report.

(Reporting by David Lawder and Andrea Shalal; additional reporting by Ben Blanchard and John RevillEditing by Dan Burns, Chizu Nomiyama and Andrea Ricci)

Roche says Nestle Chairman Bulcke to leave its board of directors

ZURICH (Reuters) – Roche board member Paul Bulcke, the current chairman of Nestle, will stand down from the Swiss drug-maker’s board of directors after its annual general meeting next year, the company said on Friday.

Bulcke, who has been a member the Roche board since 2011, decided not to stand for re-election at the AGM due to be held on March 22 next year, following almost 11 years in the role, Roche added.

The Roche board has proposed Jemilah Mahmood, currently the Special Advisor on Public Health to Malaysia’s prime minister, for election as a new member.

(Reporting by John Revill, editing by Louise Heavens)