FirstFT: Finland and Sweden to join Nato

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The president and prime minister of Finland have said the Nordic country should join Nato in a move that would end decades of neutrality and extend the western defence alliance’s border with Russia by more than 800 miles.

Helsinki’s announcement is expected to be quickly followed by neighbouring Sweden, which has been neutral since the Napoleonic wars of the 19th century.

Russia’s invasion of Ukraine has fuelled a rapid change in public opinion towards membership of Nato in both Nordic countries. The principle of collective defence is enshrined in Article 5 of Nato’s constitution which means that any attack on one of the alliance’s 30 members is an attack on all.

For years, public backing of Nato membership hovered between 20 and 30 per cent in Finland, even after Russia’s incursions into Georgia in 2008 and Ukraine in 2014. But the most recent poll showed 76 per cent of Finns backed joining Nato, and only 12 per cent opposed. Support for Nato membership in Sweden has also grown since the start of the conflict in Ukraine.

Nato is expected to approve Finland and Sweden’s membership requests quickly and an alliance official said that both countries could become formal invitees within “a couple of weeks” before a pivotal Nato summit in Madrid at the end of June.

Boris Johnson yesterday signed a security agreement with Helsinki and Stockholm and offered military support to both nations in the event of an attack before their Nato membership is ratified.

Finland, which shares an 832-mile border with Russia, would bring a well-trained military and a high level of preparedness to the alliance and bolster its forces in the Baltic region.

Russia has repeatedly threatened “serious military and political consequences” should either Finland or Sweden join Nato.

Speaking to reporters on a conference call, Kremlin spokesman Dmitry Peskov said the steps taken by Finland to join Nato were a cause for regret and a “threat” to Russia.

Thanks for reading FirstFT Americas. Here’s the rest of the day’s news — Gordon.

1. Saudi Aramco overtakes Apple to become world’s most valuable company Saudi Aramco and not Apple is now the world’s most valuable company after higher oil prices pushed the crude exporter’s share price to record levels while a broad tech stock sell-off weighed on the iPhone maker. Tech stocks suffered from another heavy day of selling yesterday, with the Nasdaq Composite falling 3.2 per cent.

2. Bill to protect abortion rights fails to advance in the Senate Legislation to enshrine the right to an abortion failed to advance in the US Senate last night. A critical procedural vote on the Democrat-backed Women’s Health Protection Act, which aimed to protect access to abortion and healthcare providers’ ability to offer the procedure, failed to garner the 60 votes needed, falling 49 to 51.

3. Tether breaks $1 peg The world’s biggest stablecoin, with a value of about $80bn, this morning fell below its $1 peg to the dollar as the digital currency sell-off shows no sign of abating. Bitcoin, the most actively traded cryptocurrency, fell almost 7 per cent to $26,250, the lowest level since December 2020.

4. EU threatens retaliation if UK ditches Northern Ireland protocol The EU has vowed to retaliate if the UK rips up a post-Brexit trade deal for Northern Ireland after London’s threat of unilateral action triggered alarm in Brussels and Washington. Joe Biden appealed to the UK to show “courage, co-operation and leadership” to settle the simmering dispute.

5. Disney gains ground on Netflix Walt Disney added 7.9mn new subscribers to its Disney Plus streaming service in its latest quarter, taking the total number of paying customers to 137.7mn. The new sign ups were well above projections of about 5mn and painted a very different picture to industry leader Netflix which last month warned it was losing customers for the first time in a decade.

The day ahead

Meetings Foreign ministers from the G7 will begin a 3-day meeting today in Weissenhaus, Germany. Germany is the current chair of the grouping which also includes the US, Canada, France, Italy, Japan and the UK. The European parliament’s foreign affairs committee hosts Finnish foreign minister Pekka Haavisto for a debate on European security challenges in light of the war in Ukraine. The White House will host the Association for Southeast Asian Nations for a summit that begins today.

Economic data Inflation will be back in the spotlight this morning with the release of the latest US producer price index. Yesterday data showed the consumer price index rose at an annual pace of 8.3 per cent in April, down from 8.5 per cent the month before. The producer price index, which tracks prices businesses receive for their goods, is also expected to have fallen slightly last month to 10.7 per cent from 11.2 per cent in March.

Corporate earnings Tapestry, the luxury fashion company, known for its brands Coach, Kate Spade and Stuart Weitzman, is expected to update investors on its operations in China where it recently expanded. Brookfield Asset Management, WeWork and amusement park operator Six Flags also report, as well as lender Affirm and language-learning website Duolingo.

Monetary policy Mexico’s central bank is expected to raise its benchmark interest rate to 7 per cent from 6.5 per cent at its monetary policy meeting this afternoon. Mary Daly, president of the Federal Reserve’s San Francisco branch, will participate in a “fireside chat” hosted by her bank in Anchorage, Alaska.

Join us in person or online at the FT Business of Luxury Summit on May 18-20 to hear from luxury leaders including British Vogue, Valentino, Zegna and YSL.

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Marcos myths lift dictator’s son to power in Philippines The Marcos family comeback has been decades in the making but crystallised this week with the landslide victory for Ferdinand ‘Bongbong’ Marcos Jr in Philippines’ presidential election. Marcos is now set to follow in the footsteps of his late father, the dictator Ferdinand Marcos, when he is sworn in for a six-year term in July. But the campaign was aided by what researchers said was co-ordinated online promotion of false historical narratives.

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