1UA TV

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.
…

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.”
…

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.
…

The World Bank has approved a $750 million loan guarantee for Ukraine, President Petro Poroshenko said on Twitter on Tuesday, calling it proof of his nation’s “tangible progress on the reform path.”

The World Bank, International Monetary Fund and other bodies support Ukraine with loan agreements conditional on Kiev passing reforms and tackling corruption. The IMF executive board was expected to meet later on Tuesday to approve a new stand-by loan deal for Ukraine worth $3.9 billion.
…

Saudi Arabia plans to increase state spending by 7 percent next year in an effort to spur economic growth that has been hurt by low oil prices, according to a 2019 state budget announced by King Salman on Tuesday. Spending is projected to rise to an all-time high of 1.106 trillion riyals ($295 billion), from an actual 1.030 trillion riyals this year.

“We are determined to go ahead with economic reform, achieving fiscal discipline, improving transparency and empowering the private sector,” the king said in a nationally televised speech.

The economy shrank last year and, although the government estimates it grew 2.3 percent in 2018, that is much slower than the boom years early this decade — and not enough to put much of a dent in a record jobless rate of 12.9 percent among Saudis.

“The budget focuses on boosting activity after years of fiscal consolidation and weak growth,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

Because of the ramp-up in spending, the 2019 budget also appears to mark a slowing of Saudi Arabia’s drive to cut a big state budget deficit caused by the oil price slump.

The deficit, which the government has pledged to eliminate by 2023, came in at 136 billion riyals this year, well below the 195 billion riyal gap originally projected for 2018.

That was partly because of higher oil export revenues; Brent oil has averaged about $73 a barrel so far this year, up from $54 in 2017. But Riyadh also boosted non-oil revenues with tough austerity steps such as the imposition of a 5 percent value-added-tax at the start of 2018.

Next year, the government projects only a minimal further shrinking of the deficit to 131 billion riyals. Malik said her assumptions for Saudi gross domestic product and oil revenue suggested the deficit might actually widen back in 2019, to over 7 percent of GDP from near 4 percent.

Saudi Arabia does not disclose the oil price assumptions on which its planning is based, but Malik and some other private economists estimated the 2019 budget implied Brent at $70-71 per barrel with oil production at 10.2 million barrels per day.

Jean-Paul Pigat, head of research at Lighthouse Research in Dubai, said the budget’s increase in spending was lower than he had expected.

“Government spending is what ultimately drives growth in Saudi, and the wider region, and without stronger stimulus, it is difficult to see where the spark for stronger demand will come from,” he said.

However, Pigat added that more stimulus might come in the form of off-budget spending by the Public Investment Fund, the kingdom’s main sovereign wealth fund, which is embarking on multi-billion-dollar projects to develop Saudi Arabia’s tourism, entertainment and real estate industries.
…

The European Union’s top diplomat called Tuesday on Kosovo to lift tariffs on goods from Serbia and Bosnia-Herzegovina as tensions rise between the former Serbian territory, and the EU and NATO.

Kosovo last month slapped a 100-percent tax on Serbian imports, apparently in retaliation after its bid to join the international police organization, Interpol, failed amid intense Serb lobbying.

EU foreign policy chief Federica Mogherini said that “it is in the interest of Kosovo to immediately revoke this decision.” She urged Pristina to settle its grievances through dialogue.

Kosovo broke away from Serbia in 2008 and unilaterally declared independence. Belgrade doesn’t recognize the move, nor do a small group of EU states, like Spain for example that fear that recognition might fuel breakaway tendencies in their own countries.

Mogherini’s appeal came as Kosovo’s prime minister accused her of mishandling EU-backed talks on normalizing ties with Serbia.

Ramush Haradinaj said the so-called Pristina-Belgrade dialogue led by Mogherini “has not given its expected products.”

He said that while Serbia is taking major steps toward the EU integration, Kosovo residents remain “in a ghetto,” not enjoying visa-free travel to EU countries even though it claims to have fulfilled the requirements.

A news conference planned between Mogherini and Haradinaj in Brussels on Monday was cancelled without reason. Mogherini said Tuesday it was because “we didn’t have any news to give,” and she noted that Haradinaj didn’t raise her handling of the talks with her.

Haradinaj has said his government will only lift the tariffs once Serbia recognizes Kosovo’s independence.

Mogherini, speaking alongside Serbian Prime Minister Ana Brnabic, expressed concerned about a return to conflict and warned that “the alternative to dialogue is very dangerous.”

NATO ambassadors, meanwhile, were weighing Tuesday Kosovo’s decision to transform its security force into an army.

Belgrade has warned that creating an army in a place it considers Serbian territory could result in an armed intervention.

But Kosovo’s parliament on Friday overwhelmingly approved the army’s formation in what President Hashim Thaci described as “an irreversible act.”

NATO and the EU have criticized the move, and NATO could reduce cooperation with Kosovo security services, although it seems unlikely to cut the number of troops in its own security force there, KFOR.

“There is a long-standing agreement that NATO will have to re-examine our level of engagement with the Kosovo Security Force, should its mandate evolve,” spokeswoman Oana Lungescu said in a statement.

She underlined that NATO’s KFOR will continue “to ensure a safe and secure environment.”
…

Another day of big losses knocked U.S. stocks to their lowest levels in more than a year Monday. Investors dumped high-growth technology and retail companies as well as steadier, high-dividend companies. Oil fell below $50 a barrel for the first time since October 2017.

Hospitals and health insurers slumped after a federal judge in Texas ruled that the 2010 Affordable Care Act is unconstitutional. Other stocks wobbled in morning trading, then plunged in the afternoon. The Dow Jones Industrial Average fell 507 points after a 496 point drop Friday.

Amazon led a rout among retailers and tech companies including Microsoft turned sharply lower. Some of the largest losses went to utilities and real estate companies, which have done better than the rest of the market during the turbulence of the last three months.

“That is basically retail investors panicking,’ said Mark Hackett, chief of investment research at Nationwide Investment Management. “Investors basically are confusing the idea of a slowdown with a recession.”

But investors dumped almost everything. Less than 40 of the 500 stocks comprising the S&P 500 finished the day higher.

The S&P 500 index, the benchmark for many investors and funds, finished at its lowest level since Oct. 9, 2017. It has fallen 13.1 percent since its last record close on Sept. 20. The Russell 2000, an index of smaller companies, has dropped more than 20 percent since the end of August, meaning that index is now in what Wall Street calls a “bear market.”

Germany’s main stock index also fell into a bear market Monday as companies like Siemens and SAP kept falling.

Smaller U.S. stocks have taken dramatic losses as investors have lost confidence in the U.S. economy’s growth prospects. Smaller companies are considered more vulnerable in a downturn than larger companies because they are more dependent on economic growth and tend to have higher levels of debt.

Hackett said the current drop is similar to the market’s big plunge in late 2015 and early 2016, which was also tied to fears that the global economy was weakening in a hurry. But even though the economy is slowing down after its surge in 2017 and 2018, it should continue to do fairly well.

“It’s a slowdown from extremely high levels to healthy levels,” he said. “The globe isn’t going into a recession.”

The S&P 500 skidded 54.01 points, or 2.1 percent, at 2,545.94. The Dow Jones Industrial Average lost 507.53 points, or 2.1 percent, to 23,592.98. The Nasdaq composite fell 156.93 points, or 2.3 percent, to 6,753.73. The Russell 2000 index dipped 32.97 points, or 2.3 percent, to 1,378.14.

Following the health care ruling, hospital operator HCA dropped 2.8 percent to $123.1 and health insurer UnitedHealth lost 2.6 percent to $258.07. Centene, a health insurer that focuses on Medicaid and the Affordable Care Act’s individual health insurance exchanges, fell 4.8 percent to $121.42 and Molina skidded 8.9 percent to $120.

Many experts expect the ruling will be overturned, but with the markets suffering steep declines in recent months, investors didn’t appear willing to wait and see.

Benchmark U.S. crude fell 2.6 percent to $49.88 a barrel in New York. Brent crude, used to price international oils, dipped 1.1 percent to $59.61 a barrel in London. Weaker economic growth would mean less demand for oil, and traders have been concerned there is too much crude supply on the market. That’s chopped oil prices by one-third since early October.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.86 percent from 2.89 percent.

The Federal Reserve is expected to raise interest rates again Wednesday, the fourth increase of this year. It’s been raising rates over the last three years, and investors will want to know if the Fed is scaling back its plans for further increases based on the turmoil in the stock market over the last few months and mounting evidence that world economic growth is slowing down.

Hackett, of Nationwide, said investors will be happy if the Fed adjusts its plans and projects fewer increases in interest rates next year. But he said investors might be startled if the Fed doesn’t raise rates this week, as has been widely expected.

British Prime Minister Theresa May said Parliament will vote Jan. 14 on her deal setting terms for Britain’s departure from the European Union. She canceled a vote on the deal last week because it was clear legislators were going to reject it. May insists she can save the deal, but pressure is mounting for either a vote by lawmakers or a new referendum on the issue.

Britain is scheduled to leave the EU in late March, and if it does so without a deal in place governing its trade and economic relationships with the bloc, it could bring huge disruptions to the British and European economies and financial markets.

Germany’s DAX lost 0.9 percent. That means the DAX, which represents Europe’s largest single economy, is also in a bear market. France’s CAC 40 and Britain’s FTSE 100 both fell 1.1 percent.

Japan’s Nikkei 225 index added 0.6 percent and the Kospi in South Korea gained 0.1 percent. Hong Kong’s Hang Seng was less than 0.1 percent lower. Both the Kospi and Hang Seng are in bear markets as well.

In other energy trading, wholesale gasoline shed 1.7 percent to $1.41 a gallon and heating oil slid 1 percent to $1.83 a gallon. Natural gas dropped 7.8 percent to $3.53 per 1,000 cubic feet.

Gold rose 0.8 percent to $1,251.80 an ounce. Silver added 0.8 percent to $14.76 an ounce. Copper dipped 0.3 percent to $2.75 a pound.

The dollar slipped to 112.75 yen from 113.29 yen. The euro rose to $1.1350 from $1.1303. The British pound rose to $1.2629 from $1.2579.
…

U.S. President Donald Trump said Monday he has authorized the second round of payments from a $12 billion aid package for farmers stung by the U.S. trade war with China, but did not specify an amount.

“Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations. I have authorized Secretary Perdue to implement the 2nd round of Market Facilitation Payments,” he said in a Twitter post.

The U.S. Department of Agriculture in July had authorized up to $12 billion in aid for farmers and ranchers hit by the fallout from Trump’s escalating trade war with China and the agency outlined the first round of payments.

An announcement on the second tranche had been expected in early December.

China had imposed a 25 percent tariff on American soybeans in July in retaliation for U.S. tariffs on Chinese goods.

Trump had promised the payments to farmers stung by the trade disputes.
…

Work four days a week, but get paid for five? It sounds too good to be true, but companies around the world that have cut their work week have found that it leads to higher productivity, more motivated staff and less burnout.

“It is much healthier and we do a better job if we’re not working crazy hours,” said Jan Schulz-Hofen, founder of Berlin-based project management software company Planio, who introduced a four-day week to the company’s 10-member staff earlier this year.

In New Zealand, insurance company Perpetual Guardian reported a fall in stress and a jump in staff engagement after it tested a 32-hour week earlier this year.

Even in Japan, the government is encouraging companies to allow Monday mornings off, although other schemes in the workaholic country to persuade employees to take it easy have had little effect.

Britain’s Trades Union Congress (TUC) is pushing for the whole country to move to a four-day week by the end of the century, a drive supported by the opposition Labour Party.

The TUC argues that a shorter week is a way for workers to share in the wealth generated by new technologies like machine learning and robotics, just as they won the right to the weekend off during the industrial revolution.

“It would reduce the stress of juggling working and family life and could improve gender equality. Companies that have already tried it say it’s better for productivity and staff well-being,” said TUC economic head Kate Bell.

Overworked

Lucie Greene, trends expert at consultancy J. Walter Thompson, said there was a growing backlash against overwork, underlined by a wave of criticism after Tesla boss Elon Musk tweeted that “nobody ever changed the world on 40 hours a week.”

“People are starting to take a step back from the 24-hour digital life we have now and realize the mental health issues from being constantly connected to work,” Greene said.

A recent survey of 3,000 employees in eight countries including the United States, Britain and Germany found that nearly half thought they could easily finish their tasks in five hours a day if they did not have interruptions, but many are exceeding 40 hours a week anyway — with the United States leading the way, where 49 percent said they worked overtime.

“There has been work creep. Because you always have the technology, you are always working, so people are getting burned out,” said Dan Schawbel, director of executive development firm Future Workplace, which conducted the survey with Kronos.

‘Quick, focused’

Schulz-Hofen, a 36-year-old software engineer, tested the four-day week on himself after realizing he needed to slow down following a decade of intense work launching Planio, whose tools allowed him to track his time in detail.

“I didn’t get less work done in four days than in five because in five days, you think you have more time, you take longer, you allow yourself to have more interruptions, you have your coffee a bit longer or chat with colleagues,” Schulz-Hofen said. “I realized with four days, I have to be quick, I have to be focused if I want to have my free Friday.”

Schulz-Hofen and his team discussed various options before settling on everybody working Monday to Thursday. They rejected the idea of flexible hours because it adds administrative complexity, and were against a five-day week with shorter hours as it is too easy for overwork to creep back in.

Clients who call on a Friday hear a recorded message explaining why nobody is at the office.

“We got an unexpected reaction from customers. Most of our clients did not complain. They were just jealous,” Schulz-Hofen said.

Grey New York, an ad agency owned by WPP, launched a program in April to allow staff to work a four-day week for 85 percent of their full-time salary.

Schawbel expects the idea to catch on in more companies and countries, but probably not his own: “I think America will be the last country to give us Monday mornings off because we’re so used to this way of working.”
…