“Our base case for sterling remains unchanged: that some type of a compromise on state aid and fisheries will enable a barebones free trade agreement covering goods, and that the pound will enjoy a moderate 3-5% rally as a result. Assigning a percentage probability to the chance of talks collapsing is a mug’s game: everyone knows this remains a realistic probability.”
Historically, a large portion of the US wealth is concentrated in the hands of a few people. According to data from the Tax Policy Center, about 80% of the capital gains go to the wealthiest 5% of taxpayers. 69% go to the top 1% of taxpayers. Biden’s current proposal calls for those earning more than $1mln to have long term cap gains and qualified dividends be taxed as ordinary income. This would mean a tax increase from 0% -20% (depending on taxpayer’s income) to 39.6% – the current proposal for the top bracket under Biden’s outline. How impactful will this be?
In an opinion article published this Monday in The Times, the main executives of both groups, José María Álvarez-Pallete, president of Telefónica, and Mike Fries, executive director and vice-president of Liberty Global, flag that problems on the regulatory front, as well in the approval of infrastructure plans, means that the UK has fallen behind other countries like Spain, France, Portugal, San Marino or Madagascar in terms of coverage and broadband speed.
In February, Liberbank and Unicaja concluded possible merger contacts after failing to reach an agreement about the likely distribution of the shares of the new entity, but now the integration of both banks would give rise to the fifth lender in Spain in terms of asset volume, with €98.6 Bn (€56.7 Bn Unicaja and 41.95 Bn Liberbank). Net profit would reach €102 M in H1’20 (€61 M UNI and €41 M LBK). The new bank would have a network of 1,607 branches (1,028 UNI and 579 LBK) and 9,942 employees (6,274 UNI and 3,668 respectively).
Getting 65 heads of state to agree to anything is remarkable. But when the topic is “meaningful action” on biodiversity, the “Leaders’ Pledge for Nature” is a big deal. This week, the UN held a virtual biodiversity summit, aiming to reach a new agreement when the “UN Convention on Biological Diversity” convenes in China in May 2021. DWS talks about the economic consequences of biodiversity loss and the role of financial regulators.
ACS is in talks with French infrastructure group Vinci over the sale of its industrial division, Cobra, valued at approximately 5.2 billion euros. Vinci’s offer is purely indicative and non-binding. Of the total 5.2 billion euros, a minimum of 2.8 billion would be paid in cash. The rest of the amount could be paid in cash or in Vinci shares. If this was the case, then ACS would hold a 5.86% stake in the French firm. This would make it the second largest shareholder after the employees (8.2%).
The ECB is focusing on the proactive management of NPLs, linking the dividend policy to the impact of Covid19 on credit quality. Estimates suggest an increase in delinquency rates of up to €1.4 Tr in an adverse macro scenario, equivalent to 5.7% of the capital ratio. At a round table organized last week by the Bundesbank, Banco Santander chairman Ana Patricia Botín argued that the dividend veto is one reason why the banking sector is not sufficiently resilient “in terms of its ability to attract capital.”
According to the annual review of the Spanish economy, known as ‘Article IV’, the IMF believes the impact of the European funds will increase the GDP growth forecast for 2021 to 7.2%. This compares with the previous estimate of 6.3% made in June. The final forecasts will be made known in October, when the institution will publish its biannual ‘World Economic Outlook’.
Macropolis | A video talk featuring Juan Pablo Riesgo, a partner of Ernst & Young and former Secretary of State for Employment in Spain, and Nick Malkoutzis, editor of MacroPolis, discussing how Spain and Greece should best use the Recovery Fund package proposed by the European Commission.
Ian McCredie | True to himself, US President Donald Trump completely failed to address any of the issues confronting the global community in his keynote speech to the 74th General Assembly of the United Nations. Instead, he used the platform to criticize China, to excoriate Iran, to boast of how big and dangerous the US military has become, and to urge every nation to close its borders to even the most hungry or persecuted migrants.