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Evergrande didn’t pay on time. ECB Says “Direct Impact” on Europe “Limited” – Observer



Evergrande didn't pay on time.  ECB Says "Direct Impact" on Europe "Limited" - Observer

A Evergrande did not make payment until this Thursday., which included the payment of interest on a bond issued in dollars. According to various sources cited by news agencies such as Reutersat least some of the holders of these bonds indicated that they did not receive any payments – this begins the 30-day count stipulated in the rules of these debt securities, after which “default“, That is, default on debt. To calm financial markets, Christine Lagarde, ECB President, arrived this Thursday to ensure that the “direct impact” on Europe of the Chinese giant will be “limited.”

“I have vivid memories of recent events in the Chinese stock market that have impacted the whole world,” but “in Europe, and in particular in the euro area, direct exposure will be limited.“, – said the person in charge in an interview with CNBC.” At the moment, we see impact and impact focused on China“, Lagarde added, while the ECB is closely monitoring the situation, given the interconnectedness of financial markets on the planet.

Despite Christine Lagarde’s assurances, the end of the week is going negative for global stock markets. The Frankfurt DAX 30 is down 0.8% and US stock futures also indicate a negative opening, although there could be other factors, such as uncertainty over the German elections this Sunday or confirmation in the US, which the Federal Reserve said system, “soon” conditions to reduce the monetary stimulus of the economy.

Group President Xu Jiayin, considered one of China’s greatest fortunes, stressed on Wednesday night that the group should “do my best to honor»Your obligations. The payout, scheduled for this Thursday, was $ 83.5 million in USD-denominated bonds. Other significant refunds will need to be made in the next few days. However, according to the current rules, if the payment is not made on time, the company will be considered unfulfilled (formally) only after 30 days.

According to the financial press in the United States, the central government has already asked regional governments to “prepare for the storm” that will lead to eventual bankruptcy. Among the risks that should be taken care of is “social instability,” that is, massive protests from victims who may lose the savings they have invested in Evergrande – be it real assets that could be depreciated, or, above all, financial instruments that were posted at Evergrande. retail trade with big money promises (up to 13%), Gucci bags and Dyson air fresheners… This is how huge cash flows, alien to banking regulation, were created, which feed the so-called Chinese “shadow bank”.

Evergrande is one of the largest debtors in the world, sitting on a mountain of loans equivalent to $ 305 billion or € 260 billion. As these debts come to maturity, they become more difficult to pay off – financial pressures are “colossal,” Evergrande admitted, blaming newspapers and the press for “negative news” that is dampening the group’s sales (and presumably limiting sales). down money supplies received in exchange for investment products that he distributes to citizens).

Evergrande. Chinese football club giant that seduced people with 13% stake and Gucci bags

But a survey conducted this week by Deutsche Bank among its institutional investor clients found on Tuesday that “only 8% of respondents believe that Evergrande could have a significant negative impact on global financial markets, with 68% expecting“ no impact or limited exposure. “

But Evergrande is a symbol of an economic model that some economists say is numbered: over-construction and astronomical debt. The company’s problems are not just its own, they are a reflection of an unbalanced development model – it is in the real estate sector in China that almost 30% of the country’s gross domestic product (GDP) is generated, and now it is the risk that activities will cease to be the engine of growth, will become a burden.

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“We continue to believe that the importance of Evergrande lies not in the fact that it could be a trigger that could trigger a systemic crisis, but rather in an alarming extrapolation that could be made to the future growth prospects of the Chinese economy with the corresponding consequences. … for global growth, ”said a group of economists at the Dutch Rabobank led by Richard McGuire.

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DHL with ‘great difficulty’ invests $50 million in Lisbon



DHL with 'great difficulty' invests $50 million in Lisbon

Portugal could be a “much bigger gateway” for DHL’s business than it is today, said Dinheiro Vivo, CEO of DHL Express John Pearson, on the sidelines of the 2022 Trade Growth Atlas launch in Brussels, noting that there are business opportunities in the country’s largest distribution and logistics group in the world. However, the group has been trying “for years” to set up a new logistics terminal in Lisbon, but to no avail.

“We have been trying for many years with the ANA and the airport administration to create a new infrastructure, I think we are close to this. Our planes,” he emphasizes. DHL has grown “very fast” and has a “very healthy business with a very high market share” in Portugal, with good prospects “especially in the consumer segment”, which Pearson said could create “more terminals and jobs”.

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Iran cut off internet access… Elon Musk will give connection



Irão cortou o acesso à Internet... Elon Musk vai dar conectividade

As we reported hereThere was a massive internet outage in Iran yesterday during a series of mass protests against the government.

After this action, Elon Musk posted a message on the social network Twitter, from which it follows that he is already activating his Starlink satellite network to allow Internet access in this country.

Elon Musk: Outfit [rede] Starlink for Internet access for Iranians

Iranians are facing massive internet shutdowns due to anti-government protests. Loss of connectivity, preventing access to platforms such as Instagram and WhatsApp, makes it difficult to organize demonstrations as well as share information about government crackdowns.

Elon Musk wasted no time and was quick to point out on Twitter that he was "helping [rede] Starlink...", in response to another message also posted on the social network Twitter by US Secretary of State Anthony Blinken, in which he revealed that the White House had given permission for Internet companies to provide their services to Iran.

Iran cut off internet access... Elon Musk will give connection

He recalls that the protests in Iran began on Friday last week after it became known about the death of 22-year-old Masha Amini after being detained by the Vice Police for wearing a veil placed in a way that agents considered wrong.

State television IRIB reported 26 deaths in clashes with police. The Iranian government has severely restricted internet access, and in recent days, mobile networks have been switched off from 9pm to morning.

On Thursday, the US sanctioned the Vice Police for the death of a young woman and seven security sector leaders for cracking down on demonstrations.

It should also be noted thatIranian citizens are banned from accessing Facebook, Telegram, Twitter and YouTube, despite the fact that many bypass these restrictions through a VPN.

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“The script is serious and should be taken seriously”



"The script is serious and should be taken seriously"

The latest data from Eurostat is disappointing for Portugal: last year, almost a quarter of self-employed workers in the European Union were at risk of poverty or social exclusion. In Portugal they are third. Only Romania looks worse in the picture. “At the national level, in 2021, Romania, Portugal and Estonia had the highest proportion of self-employed workers at risk of poverty and social exclusion (70.8%, 32.4% and 32.2%),” reported the European Statistical Office , revealing the unreliability of working with green receipts and without a contract in the country. On average across EU countries, the situation has also deteriorated, but not as much. According to published data, compared to 2020 and in the analysis of the categories “unemployed”, “pensioners”, “employed” and “independent workers”, the latter was the only one in which the worsening of the poverty situation was recorded, from 22.6% to 23. 6%. By contrast, self-employment poverty improved in 11 countries, with Ireland and Hungary recording the largest declines between 2020 and 2021 (-3.2 and -3.7 percentage points, respectively).

For Enrique Tomé, an analyst at XTB, the data “reflects the volatile state of the labor market in Portugal,” he says, explaining that for companies “hiring new contract workers is becoming too expensive, especially for SMEs, leading many companies to use green slips as a alternatives.” And he adds: “However, conditions for the worker are not the best, because he is too exposed to the prevailing economic conditions and has less support in the event of dismissal.”

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So the analyst heard Sunrise has no doubt: “This scenario is serious and should be taken seriously because if economic conditions worsen, the labor market will naturally suffer and could create a delicate situation.”

To reverse this trend, several things can be done, says Enrique Tome. “We need to create conditions to protect the self-employed, and also support companies so that they feel motivated to hire new contract workers – the alternative could be to reduce the costs that companies have to insure.”

However, it must be taken into account that these Eurostat data refer to 2021. And yet they are not very encouraging, as they already show a deterioration compared to 2020. How will the balance of this year and next? “It is possible that the next few years will certainly be difficult for all economies, given that economic forecasts indicate a possible slowdown in economic activity, which could cause periods of deep recession in the most vulnerable economies, such as Portugal,” the analyst replies. XTB.

Risk? Portugal takes root at the tail of Europe. “This possible scenario further exacerbates the difference between the largest and most fragile economies,” warns Enrique Tome, adding that despite “the European Commission’s initial projections that Portugal would be the eurozone country with the highest growth rate in terms of GDP, the truth is that the country continues to grow at a very modest pace, and the rate of growth has actually slowed down over the past few years.”

Looking at the worst-case scenario, namely a recession, “Portuguese’s economy is likely to be hit hard as economic activity remains far below expectations and the country has very high debt compared to what it produces (GDP) and at this point more the issue of the pandemic has become more acute,” the analyst warns.

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When asked about the consequences of these Eurostat data, the specialist has no doubts: “We may again witness periods of greater austerity in the country if a recession scenario is realized in Portugal”, but so far “not everyone is in red flags have been raised, but at the same time, we cannot rule out such a possibility.”

It is true, continues Enrique Tomé, that the Portuguese economy is “mired in debt and inflation remains high, which should affect economic activity and could cause periods of economic downturn (recession)”.

And it’s also important to keep in mind that these figures from the European Statistical Office on poverty are not unexpected news. Eurostat has already warned that the pandemic has lifted Portugal from 13th to 8th place in the list of European countries at increased risk of poverty or social exclusion.

It is clear to the analyst that the country “suffers from a big problem – it does not pay enough attention to the private sector, which creates wealth.” But not only that. “This does not create the necessary conditions for the growth of the private sector and contributes to instability in some sectors, which leads to many highly skilled workers choosing to emigrate.”

On the other hand, he argues, “a high tax burden also discourages investment from many companies and does not contribute to the growth of the business structure at all.” These, in his opinion, are “two factors that have not been given due attention in recent years, but which are necessary for the national economy to start growing at an attractive pace.”

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Getting poorer?

According to Eurostat, in absolute terms, there are 2.312 million Portuguese people on the verge of poverty in 2021, an increase of 256,000 compared to 2020. You have to go back to 2017 to find a higher figure. As the eighth poorest country in the EU, Portugal has dropped five places in risk of poverty or social exclusion compared to 2020.

And with rising food and energy prices, the situation tends to worsen. Portugal’s European Anti-Poverty Network (EAPN) recently said that the government’s anti-inflation support measures are “not the ideal answer”, although it is “important” that the executive has “taken over”. “I imagine and feel that this is not a perfect answer. We are a poor country and we need to know how to deal with our limitations,” he said. Lusa President of EAPN Portugal Father Jardim Moreira.

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