New Brazilian Minister: Even Military Must Compromise on Pensions

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Every Brazilian, including current and former members of the armed forces, will have to compromise under the next administration’s pension reform plan, a former general set to become government minister said in an interview.

Retired General Carlos Alberto dos Santos Cruz told Reuters in Brasilia last week that it was “inadmissible” in today’s world for some Brazilians employed in the public sector to retire in their 40s or 50s.

On December 4, right-wing President-elect Jair Bolsonaro said he planned to tackle the overhaul of Brazil’s fiscally burdensome pension system with piecemeal reforms that can pass Congress, starting with an increase in the minimum age of retirement.

Many economists say cuts to Brazil’s social security system are essential to controlling a huge federal deficit and regaining Brazil’s investment-grade rating.

“There are some professions that will need to cede some things, as is the case with the justice system workers, the prosecutor’s office, and all public sector employment,” Santos Cruz said. “The military is in the same situation. The idea of retirement, for example, is going to have to be tweaked.”

One of a group of former army generals who have become close advisers to Bolsonaro, Santos Cruz will be Bolsonaro’s main liaison with Congress, state and local governments, when he takes office on January 1.

Brazil would have to take a long hard look at the age people stop working in order to protect public finances, said Santos Cruz, who is 66.

Bolsonaro, a former army captain and staunch defender of Brazil’s 1964-1985 military dictatorship, had pledged to protect military pensions and retirement rights, but the realization that they are responsible for nearly half of the pensions deficit led his economic advisers to push him to rethink that stance. In recent comments, Bolsonaro has said he is willing to countenance a minimum age for military retirement.

Santos Cruz also said any austerity measures should be leveled against top-earning public workers, for whom the pain is relatively less, rather than lower paid employees.

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Greek Lawmakers Approve New Budget — With More Austerity

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Greek lawmakers approved the heavily indebted country’s budget for 2019 late Tuesday, the first since Greece exited an eight-year bailout program.

The budget lawmakers passed with a 154-143 vote still is heavy on austerity measures to ensure Greece registers a hefty surplus, in compliance with its debt relief deal with international creditors.

Earlier Tuesday, government spokesman Dimitris Tzanakopoulos said the proposed budget was Greece’s first in 10 years to be drafted “under circumstances of relative financial and political freedom” from bailout creditors.

“Today we have the opportunity to vote for a budget that now reflects the priorities of the Greek government, and not of [its] supervising institutions,” he said during a parliamentary debate.

As the debate drew to a close, more than 2,000 people demonstrated peacefully outside parliament in two separate protests called by labor unions.

The budget submitted by the left-led government foresees Greece’s battered economy growing 2.1 percent in 2018 and 2.5 percent in 2019. The debt load is set to decline from 180.4 percent of output this year to 167.8 percent next year.

Greece owes most of that debt to European partners and the International Monetary Fund. The debt relief deal secured favorable repayment terms, but in return the country must achieve budget surpluses for decades to come.

The country also secured a cash buffer from creditors so it would not have to tap bond markets until the rates demanded by investors to buy Greek government bonds drop.

Prime Minister Alexis Tsipras told lawmakers Tuesday that the country is not locked out of bond markets by high borrowing costs — even though his government has so far shelved stated plans to issue bonds shortly after the end of Greece’s last bailout, in August.

“[It] is a myth” that Greece can’t tap bond markets, Tsipras said. “You can be certain that we will again make a market exit, with a very good rate.”

Greece depended on bailout loans from 2010 until August 2018, and imposed crippling cutbacks to secure the money. Its finances are still subject to creditor scrutiny, albeit less intense than before.

Tsipras’ government is playing up citizen assistance programs that are intended to bring some 900 million euros in tax cuts and welfare benefits to less well-off Greeks. The money for the relief measures is supposed to come from a surplus generated by high taxes and constrained public spending.

However, labor unions say that’s not enough.

“Funding in the budget both for education and for health is much lower than our expectations,” Giannis Paidas, head of the Adedy civil servants’ union, said during the smaller of Tuesday’s two central Athens protests.

“It is the same and worse as during previous bailout-era years,” Paidas added. “There will be a 1 billion-euro increase in taxation. As you understand, this increase will burden working Greeks.”

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Mexico Budget Plan Races Past First Congressional Hurdle

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The finance committee of Mexico’s lower house of Congress on Tuesday rapidly approved the revenue section of President Andres Manuel Lopez Obrador’s 2019 draft budget, auguring speedy passage in the legislature his party controls.

Lopez Obrador’s leftist government only unveiled the budget proposal on Saturday night. It met with a positive initial response from financial markets, with investors warming to his commitment to keep a lid on spending.

The president’s National Regeneration Movement (MORENA) and its allies dominate Congress, having won the first outright majority in more than two decades.

Having been approved by the finance committee without changes, the revenue section is expected to go to the floor of the lower house on Tuesday afternoon. Once approved, the revenue budget proposal moves to the Senate.

The budget is a major test of Lopez Obrador’s credibility, which was shaken when he said on Oct. 29 he was scrapping a partly built $13 billion new Mexico City airport on the basis of a referendum that was widely panned as illegitimate.

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With Click of Button, Britain’s Homeless Crowdfund Their Way to Work

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When Hana fled to Britain with her son from East Africa, she was grateful to have found safety from persecution and a roof over her head in her sister’s tiny London apartment.

It should have been a stop-gap, but a year on, the four still live together in cramped conditions, with Hana sharing a bed with her young son, and her sister doing the same with her toddler.

“When I came to Britain, I struggled with everything. It’s very hard to be a single mum and homeless,” said Hana, who did not share her full name for fear of repercussions.

With no job prospects, she had no chance of finding her own home in London, where rents are among the highest in the world.

Homelessness has been rising in England for nearly a decade, with over 82,000 families in temporary accommodation, including more than 123,000 children, government data shows.

But 32-year-old Hana is hoping to buck that trend, after a crowdfunding campaign by social enterprise Beam paid for her to study beauty therapy.

“It’s been a dramatic change, now I will be a professional beauty therapist. Straight away I want to start a job, the day I finish my studies,” Hana said in a phone interview.

She is one of about 50 homeless people who secured employment training through Beam, which it says is the world’s first purpose-built platform that helps homeless people crowdfund donations through their online profile.

The participants, who are referred to Beam by homelessness charities, are also supported by caseworkers throughout their studies and job hunt.

“We really want to return people to a stage of independence. They should never be defined by their homelessness,” said Beam founder Alex Stephany, who launched the platform last year.

He said each crowdfunding campaign is fully funded before a new one is launched to ensure each person has the chance to take a training course of their choice, be it accounting, dental nursing or carpentry.

“There are lots of people who need help, and also lots of people who want to help, and technology has a really important part to play in making it safe and easy for people to do that,” Stephany said in an interview.

‘Housing emergency’

Homelessness charity Shelter, which partners with Beam, blames rising private rents, a freeze on benefits and a shortage of social housing for the sharp increase in homelessness.

“We see destitution every day and desperation from people. People who are being priced out of the rental market. We’re calling it a housing emergency, it’s atrocious,” said Alison Mohammed, Shelter’s director of services.

Discrimination against homeless people has also made it difficult for them to secure rental properties, she said.

A hotel in the northern English city of Hull was criticized this week after it canceled paid bookings made by a local charity to give rough sleepers a bed for Christmas Eve and Christmas Day.

‘Message from heaven’

Mohammed said initiatives like Beam can harness the public’s goodwill to help homeless people, but it is just “one piece of the puzzle.”

“Anything that can tap into the public’s wish to do something about homelessness is a good idea,” she said in a phone interview.

“It’s not going to solve the lack of social housing, but it is going to help people who have got to a position in their life where they can take that step,” Mohammed said.

Beam said a dozen people had so far gained employment and the group hopes to expand beyond London and roll out the initiative across the country.

For Hana, who will finish her beauty therapy studies next year, knowing that hundreds of strangers care about her well-being and future in Britain has been a source of comfort.

She is confident she will find her own place to live too.

“I don’t know these people and I don’t even see their faces, but they encourage me very much. It’s like a message from heaven,” she said.

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Grocery Store Using Unmanned Vehicles for Delivery

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U.S. supermarket chain Kroger Co said on Tuesday it has started using unmanned autonomous vehicles to deliver groceries Scottsdale, Arizona in partnership with Silicon Valley startup Nuro.

The delivery service follows a pilot program started by the companies in Scottsdale in August and involved Nuro’s R1, a custom unmanned vehicle.

The R1 uses public roads and has no driver and is used to only transport goods.

Kroger’s deal with Nuro underscores the stiff competition in the U.S. grocery delivery market with supermarket chains angling for a bigger share of consumer spending.

Peers Walmart Inc and Amazon.com Inc have also invested heavily in their delivery operations by expanding their offerings and shortening delivery times.

Walmart, Ford Motor Co and delivery service Postmates Inc said last month they would collaborate to deliver groceries and other goods to Walmart customers and that could someday use autonomous vehicles.

Kroger said the service would be available in Scottsdale at its unit Fry’s Food Stores for $5.95 with no minimum order requirement for same-day or next-day deliveries.

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China’s Xi Calls for Reform Implementation, Offers No New Measures

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Chinese President Xi Jinping on Tuesday called for the implementation of reforms but offered no new specific measures in a highly anticipated speech that marked the 40th anniversary of China’s move towards market liberalization.

In a speech lasting nearly an hour-and-a-half, Xi called for support of the state economy while also guiding the development of the private sector, and said China will expand efforts at opening up and ensure the implementation of major reforms.

“We must, unswervingly, reinforce the development of the state economy while, unswervingly, encouraging, supporting and guiding the development of the non-state economy,” Xi said during a speech at Beijing’s Great Hall of the People.

Xi was speaking on the day China marked as the 40th anniversary of the start of late leader Deng Xiaoping’s campaign of “reform and opening up,” which led to explosive industrial growth that made China’s economy the world’s second-largest.

“Opening brings progress while closure leads to backwardness,” he added.

“Every step of reform and opening up is not easy. In the future, we will be inevitably faced with all sorts of risks and challenges, and even unimaginable tempestuous storms,” said Xi, stressing the role the ruling Communist Party.

Xi was speaking amid mounting pressure to accelerate reforms and improve market access for foreign companies as a bitter trade war with the United States weighs on the Chinese economy.

China’s heavy support of its sprawling state sector has been a point of contention with the United States.

The trade war has spurred some Chinese entrepreneurs, government advisers and think tanks to call for faster economic reforms and the freeing up of a private sector stifled by state controls and struggling to gain access to credit.

Xi and U.S. President Donald Trump agreed early this month to a 90-day truce in the trade dispute, which halted the threatened escalation of punitive tariffs while the two sides continue negotiations.

In his speech, Xi enumerated the accomplishments of China’s development.

“Grain coupons, cloth coupons, meat coupons, fish coupons, oil coupons, tofu coupons, food ticket books, product coups and other documents people once could not be without have now been consigned to the museum of history,” he said. “The torments of hunger, lack of food and clothing, and the hardships which have plagued our people for thousands of years have generally gone and won’t come back.”

Numerous luminaries in attendance were cited for their contributions to China’s economic reforms including the heads of online giants Alibaba, Tencent Holdings and Baidu and car maker Geely Automobile Holdings.

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China Hopes for ‘Orderly’ Brexit, Calls for More Open EU Economy

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China hopes Britain’s exit from the European Union can happen in an orderly way and that the bloc will reduce hurdles to Chinese investment and keep its markets open, China’s foreign ministry said on Tuesday.

China, the world’s second-largest economy, has watched Brexit nervously, worried not only about potential market turmoil from a disorderly departure but about losing Britain’s supportive voice for free trade within the EU.

“China hopes to see Brexit proceed in an orderly fashion and stands ready to advance China-EU and China-UK relations in parallel,” the ministry said in a lengthy policy document on EU ties.

The EU and China are often at loggerheads over trade and other issues, with the EU sharing many of the same concerns as the United States about market access, trade imbalances and intellectual property rights protection.

The bloc is China’s largest trading partner while China is its biggest trading partner after the United States.

The EU has been pressing for better access to the Chinese market for its companies, while China has complained about what it sees as unfair restrictions on Chinese investments in the EU.

Despite events such as Brexit, China said the EU has remained committed to integration, pressed on with reforms and played a major role in regional and international affairs.

Beijing has promised to look at the possibility of reaching a “top notch” free trade deal with Britain post-Brexit.

The Brexit process is currently deadlocked with just over 100 days until Britain is due to leave the EU.

On trade, China’s white paper said the EU should ease high-tech export controls on China and facilitate mutual investment.

The government will significantly ease market access and endeavor to foster a “stable, fair, transparent, law-based and predictable business environment that protects the legitimate rights and interests of foreign investment and treats Chinese and foreign firms registered in China as equals,” it said.

“China hopes that the EU will keep its investment market open, reduce and eliminate investment hurdles and discriminatory barriers, and provide Chinese companies investing in Europe a fair, transparent and predictable policy environment and protect their legitimate rights and interests.”

The EU last month provisionally agreed on rules for a far-reaching system to coordinate scrutiny of foreign investments into Europe, notably from China in the wake of a surge in Chinese investments, to end what a negotiator called “European naivety.”

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Mexico to Raise Base Wage, New Leader Pledges to Lift Buying Power

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Mexico’s wage commission said on Monday it planned to hike the country’s minimum wage by 16 percent to around $5 per day and leftist President Andres Manuel Lopez Obrador pledged further increases to keep salaries apace with inflation.

The salary commission, made up of government, business and labor representatives, said the daily minimum wage would rise to 102.68 pesos from 88.36 pesos on Jan. 1, the biggest such hike since 1996.

“During many years the minimum wage has lost its purchasing power. Some say it has lost 70 percent of its purchasing power over the last 30 years,” said Lopez Obrador.

“We’re never going to have wage (increases) below inflation,” said Lopez Obrador, who took office on Dec. 1.

Low wages have helped to attract foreign companies to Mexico and create jobs, but also encourage migration to the United States. U.S. President Donald Trump argues that low wages south of the border kill U.S. jobs.

Lopez Obrador has called for doubling the minimum wage in northern states that border the United States in a bid to reduce inequality with neighboring U.S. areas.

In the area within 25 kilometers (16 miles) from the U.S. border, the minimum wage will be increased to 176.72 pesos per day, Mexican employers’ confederation Coparmex said in a statement.

Lopez Obrador’s maiden budget, delivered on Saturday, was welcomed by markets for pledging to stick to fiscal discipline, but the wage policy raised concerns that it could hit inflation and spark higher interest rates.

Benito Berber, chief economist for Latin America at Natixis, said Lopez Obrador’s new take on wages, including the commitment to keep pace with inflation, could push Mexico’s central bank to raise interest rates on Thursday.

“It seems the government is willing to accept higher inflation and perhaps stickier inflation,” Berber said. “Banxico has been clear that wage increases above productivity would entail tight monetary policy.”

($1 = 20.1160 Mexican pesos)

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Google to Spend $1 Billion on New Campus in New York

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Alphabet’s Google is investing more than $1 billion on a new campus in New York, becoming the second major technology company after Amazon to pick America’s financial capital to expand and create thousands of jobs.

The 1.7 million-square-foot campus, called Google Hudson Square, will include leased properties at Hudson Street and Washington Street, the company said in a blog post Monday. The new campus will be the main location for Google’s advertising sales division, the Global Business Organization.

Google hopes to start moving into two Hudson Street buildings by 2020, followed by a Washington Street in 2022 and will have the capacity to more than double its New York headcount, currently more than 7,000, in the next 10 years.

The company’s plans to invest outside its home base mirror those of other U.S. tech giants such as Apple Inc, which said last week it would spend $1 billion to build a new 133-acre campus in Austin, Texas.

Last month, Amazon.com Inc said it would open offices in New York and the Washington, D.C. area, creating more than 25,000 jobs.

Mountain View, California-based Google’s move to invest in prime real estate on the lower west side of Manhattan also underscores the growing importance of New York as a hub for innovation and an incubator for technology companies.

With a plethora of white-collar workers and good infrastructure, the city provides a better option to other places that would require more investment.

“We’re growing faster outside the Bay Area than within it,” said Ruth Porat, chief financial officer of Alphabet and Google.

It is a “fairly sensible” move for Google given the amount of available talent pool, Atlantic Equities analyst James Cordwell said.

It also makes sense for Google as New York has been the center for their core advertising business, Cordwell added.

U.S. corporations are also under pressure from the Trump administration to create more jobs domestically. Companies that have moved jobs overseas or closed factories have drawn sharp rebukes from President Donald Trump.

The Wall Street Journal reported last month that Google was nearing a deal to buy or lease an office building in New York City that could add space for more than 12,000 new workers.

Google’s first New York office at 111 Eighth Avenue is one of the city’s largest buildings that it bought in 2010 for $1.77 billion.

Earlier this year, the company announced a $2.4 billion purchase of the Manhattan Chelsea Market. It also has leased space on Pier 57 jutting into the Hudson, which will create a four-block campus.

Google shares were down 1.7 percent at $1,032.84 amid a broader market sell-off.

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