Covid lives on amid war, weak money and Joe Biden’s struggles


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Good evening,

One important thing to remember about our supposedly “post-Covid world” is that it is, as yet, far from being post-Covid.

Reports from China illustrate the point, with the government announcing that it will strictly limit its citizens going abroad. This is part of increasing official efforts to combat a coronavirus outbreak that has led to weeks of city lockdowns.

At the same time, President Xi Jinping prioritising the elimination of the virus is coming under pressure as a result of the economic strain it is causing. For example, China’s main financial centre Shanghai recently imposed restrictions on non-government food deliveries in the city.

Xi’s zero-Covid strategy threatens to crush economic growth and pile pressure on hard-pressed businesses, with the president this year seeking an unprecedented third term in office.

North Korea, meanwhile, has confirmed its first coronavirus cases and death since the pandemic’s beginning and imposed nationwide lockdowns. The country’s chief ally China has, despite its own problems, promised North Korean leader Kim Jong Un its “full support and assistance”.

North Korea is one of only two countries that have not yet initiated a Covid-19 vaccination programme. The other is Eritrea.

In Europe, Russia’s war in Ukraine has led to questions of who is going to pay for the damage. At the same time, farmers in Ukraine — some of the world’s most important agricultural producers — are accusing the Russian army of plundering their land.

What are the chances, however, of the war being brought to a negotiated end? Jonathan Powell, chief executive of charity Inter Mediate, which works to resolve armed conflicts around the world, says that those chances must be kept alive.

He criticises, for example, UK government ministers for “outcompeting each other to expand Ukrainian war aims with aggressive rhetoric”. The risk of a wider catastrophe must be managed by offering Russian president Vladimir Putin what, in ancient times, the Chinese general and philosopher Sun Tzu called a “golden bridge” to retreat over, he adds.

US president Joe Biden has a reputation for being a first class negotiator, stretching far back in his political career to the Salt talks of the 1970s. At this dangerous moment, however, he finds himself not in a position to take the advice of former US secretary of state Henry Kissinger that it is unwise to be facing more than one major enemy at a time.

While it was Kissinger who attracted China into friendly relations with the US a half-century ago, Biden finds himself assailed by a diversity of enemies, among them the relatively realigned Russia and China.

As the FT’s Ed Luce writes, reflecting the views of CIA chief William Burns, the US is facing a new global realignment. All this, plus — in common with much of the world — inflation, too.

Taming fast rising prices, says US Federal Reserve chief Jay Powell, will “include some pain”.

This may well mean global recession. Tough times indeed.

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Need to know: the economy

European gas prices have soared after Russia imposed sanctions on EU energy companies. Moscow’s move reinforces Putin’s willingness to use energy as a weapon against the EU.

Norway’s oil fund has denounced “corporate greed” in executive pay. The world’s largest sovereign wealth fund has voted against remuneration packages at Intel, Apple, IBM and General Electric.

Latest for the UK and Europe

Allianz, Europe’s largest insurance company by market value, says it is highly likely to leave Russia. The move could hit the German company’s profits by as much as €500mn.

The controversy at Monte dei Paschi continues after executives at the world’s oldest bank were acquitted of helping hide more than €2bn in losses. The overturning of the convictions of 13 bankers in one of the biggest financial scandals in Italian history has drawn shocked reactions from local politicians and campaigners.

UK attitudes today are positive about high levels of immigration. With a growing sense that borders are under control, the appetite for hostile policies is shrinking, writes the FT’s John Burn-Murdoch.

Global latest

Baltic states have hailed Finland and Sweden’s expected accession to Nato. The move will dramatically improve the security of Estonia, Latvia and Lithuania, say foreign ministers.

Diplomats face “one last chance” to revive Iran’s nuclear deal, writes former Iranian nuclear negotiator Seyed Hossein Mousavian.

The cost of living crisis in Australia has raised the prospect of opposition leader Anthony Albanese becoming prime minister. Local alarm has also been sparked after a decision by the Solomon Islands, which is about 2,000km to the north-east of Australia, to sign a security pact with China.

Need to know: business

The sexist comments levelled at Aviva chief Amanda Blanc at the company’s annual shareholder meeting should not be seen as a one-off, writes Helen Thomas. Rare is the woman who has risen through the ranks in business without a few stories about feeling belittled, patronised, overlooked or excluded on account of her gender, she says.

As gloomy economic talk threatens to revive memories of the 1970s, rock group Pink Floyd are not complaining. They are selling their back catalogue for about $500mn, with Warner Music and KKR-backed BMG among those interested.

Science round up

As if to keep things in perspective and remind us that we live on a small piece of rock in the limitless universe, astronomers have unveiled the first images of the closest black hole to Earth. They hope to glean new information from it about mysterious celestial bodies.

There are clues but few answers to the childhood hepatitis mystery, writes Anjana Ahuja. Adenoviruses, Covid-19 and exposure to dogs have all been blamed for new cases around the world.

Covid cases and vaccinations

Total global cases: 515.2mn

Total doses given: 11.7bn

Get the latest worldwide picture with our vaccine tracker

And finally . . . 

Andy Warhol Marilyn Monroe silkscreen
An Andy Warhol silkscreen sold for $195mn, just the week before a football shirt worn by Maradona fetched over £7mn © AP

Here are some reflections about the recent sale at auction of the shirt worn by Diego Maradona, when his footballing genius defeated England in the 1986 World Cup. As one who witnessed the event, I didn’t see which England player exchanged shirts at the end of the game with the Argentine star. But it was Steve Hodge who showed the enterprise to approach Maradona and ask for the shirt. Hodge played just three times for England and jobbed his way around numerous football clubs with a final brief spell at pride of London’s East End, Leyton Orient. The shirt at auction made more than £7mn. A nice bit of pension. Well done, Steve.

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