Joint borrowing by EU countries is a highly controversial topic

International News via Reuters:

The European Union should jointly borrow to pay for European public goods like defence, research and development and energy, Alfred Kammer, the head of the International Monetary Fund’s European Department, told Reuters on Friday.

Joint borrowing by EU countries is a highly controversial topic. The bloc’s biggest economy, Germany, is especially sensitive to joint debt, but a number of other northern European countries are also sharply opposed.

The EU broke the taboo in 2020 when it jointly borrowed 800 billion euros to re-launch the European economy after the COVID-19 pandemic, and the option of more joint borrowing, while still very difficult, has been in the public debate since then.

EU URGED TO FINANCE RISE IN PUBLIC GOODS SPENDING WITH DEBT

The threat of Russian aggression in Europe has dramatically increased the need for defense spending, and competition from China and the U.S. has added to pressure to boost European innovation and lower energy prices.

“We are suggesting concretely to more than double the European Union spending on these public goods, going up from 0.4% of GNI (gross national income) to 0.9% of GNI,” Kammer said in an interview. That increase would be roughly equivalent to 100 billion euros ($117 billion).

“We have one more recommendation, and that is to finance this increase in the EU budget with common debt in order to pay for these European goods, because they are a must, they need to be done, the benefits accrue to everybody, and you want to make sure that they start accruing now,” he said. 

“And with that, of course, you are going to service that debt over time. For that, you need to have an increase in own resources (revenues to EU budget) to do that service. So don’t shy away from thinking about common debt for common interests,” Kammer said.

Common EU defense projects, paid for jointly by the EU, are already happening through the EU programme of 150 billion euros of cheap EU loans, though probably more money would be needed given the huge scale of necessary defence investment. 

Joint financing to create a European energy market would be new – the EU needs not only to switch away from burning fossil fuels to zero-emission energy sources but also build networks across borders to transport the electricity all over the bloc.

Investing in research and development and innovation would also benefit all 27 EU countries and the bloc’s 450 million citizens.

“Those public goods are going to support many other reform efforts, so they are key in terms of moving up,” Kammer said, adding that a coordination mechanism at the EU level is needed and doing so would save money. 

“More coordination at the European level on the energy electricity market saves 7% of the costs of the clean transition,” Kammer said.

“Other studies have said that, on defense spending, when you move to common procurement and have a more coordinated effort, you would actually save 30% compared to national-level efforts,” Kammer said. “It’s cheaper to do them at the European level.”

The EU has been discussing the idea of public goods as part of the debate about the bloc’s next seven-year budget starting from 2028, but no conclusions have been agreed.

($1 = 0.8554 euros)

Reporting by Jan Strupczewski; Editing by Paul Simao

Earlier this week, the company said its AI experiences for teens will be guided by the PG-13 movie rating system, as it looks to prevent minors from accessing inappropriate content

International News via Reuters:

Meta said on Friday it will let parents disable their teens’ private chats with AI characters, adding another measure to make its social media platforms safe for minors after fierce criticism over the behavior of its flirty chatbots.

Earlier this week, the company said its AI experiences for teens will be guided by the PG-13 movie rating system, as it looks to prevent minors from accessing inappropriate content.

U.S. regulators have stepped up scrutiny of AI companies over the potential negative impacts of chatbots. In August, Reuters reported how Meta’s AI rules allowed provocative conversations with minors.

The new tools, detailed by Instagram head Adam Mosseri and Chief AI Officer Alexandr Wang, will debut on Instagram early next year, in the U.S., United Kingdom, Canada and Australia, according to a blog post.

Meta said parents will also be able to block specific AI characters and see broad topics their teens discuss with chatbots and Meta’s AI assistant, without turning off AI access entirely.

Its AI assistant will remain available with age-appropriate defaults even if parents disable teens’ one‑on‑one chats with AI characters, Meta said.

The supervision features are built on protections already applied to teen accounts, the company said, adding that it uses AI signals to place suspected teens into protection even if they say they are adults.

A report in September showed that many safety features Meta has implemented on Instagram over the years do not work well or exist.

Meta said its AI characters are designed not to engage in age-inappropriate discussions about self-harm, suicide or disordered eating with teens.

Last month, OpenAI rolled out parental controls for ChatGPT on the web and mobile, following a lawsuit by the parents of a teen who died by suicide after the startup’s chatbot allegedly coached him on methods of self-harm.

Reporting by Jaspreet Singh in Bengaluru; Editing by Shinjini Ganguli

Ex-leader Andry Rajoelina, whom lawmakers impeached after he fled abroad at the weekend, has condemned the takeover and refused to step down while in exile

International News via Reuters:

Madagascar’s coup leader Colonel Michael Randrianirina was sworn in as president on Friday to cheers, blaring trumpets and raised swords, days after taking control of the island nation in the wake of youth-led protests that forced out his predecessor.

Ex-leader Andry Rajoelina, whom lawmakers impeached after he fled abroad at the weekend, has condemned the takeover and refused to step down while in exile, despite widespread defections in the security forces and the High Constitutional Court ratifying the army takeover within hours of it happening.

The African Union and the United Nations Secretary-General Antonio Guterres have condemned the coup, which came after weeks of “Gen Z” protests initially triggered by severe, chronic power and water shortages.

MILITARY-LED COMMITTEE TO RULE FOR UP TO TWO YEARS

“I will fully, completely, and justly fulfil the high responsibilities of my position as President of the Republic of Madagascar,” Randrianirina said in a ceremony at the High Constitutional Court, a colonial-era red-brick building of French windows, segmental arches and stone balustrades.

“I swear that I will exercise the power entrusted to me and dedicate all my strength to defending and strengthening national unity and human rights,” he added, before military officers raised swords and blew trumpets to mark the handover.

While many of the youths cheered the demise of Rajoelina, who came to office in a 2009 coup, some are already expressing misgivings about the swiftness with which the army stepped in to fill the power vacuum.

Even Gen Z protesters who turned up to celebrate the new military leader’s inauguration did not consider their work done.

“Not yet,” 18-year-old student Mioty Andrianambinintsoa said outside the court, as dignitaries draped in the red, green and white of the Malagasy flag walked past her to waiting jeeps. “This is a stage. Our aims haven’t been achieved.”

Asked what those aims were, fellow protester Francko Ramananvarivo, 23, said: “Our objective is to be led by a government that is close to the people. We are not there yet.”

Randrianirina has said that a committee led by the military will rule for up to two years alongside a transitional government before organising new elections.

ELITE ARMY UNIT

Randrianirina is a commander in the elite CAPSAT army unit that played a role in the 2009 coup that brought Rajoelina to power, although he was not involved in that putsch himself. He broke ranks with the president during the protests, urging soldiers not to fire on protesters and offering to protect them.

Underlying Madagascar’s periodic upheavals is a young population – the average age is under 20 – and some of the world’s worst poverty, which blights the lives of three-quarters of its roughly 30 million people.

Despite exports of prized commodities such as vanilla, nickel, sapphires and the white pigment ilmenite, the Indian Ocean island’s average income is barely $600 a year, while prices of basic goods such as the staple rice have spiralled.

Between its independence in 1960 and 2020, GDP per capita plunged by nearly half, according to the World Bank, making it one of the few nations to have become worse off over that period.

Reporting by Tim Cocks and Lovasoa Rabary; Editing by Ammu Kannampilly and Alex Richardson

Blume took the helm at Porsche 10 years ago but for the past three years has also been CEO of parent Volkswagen

International News via Reuters:

-Porsche named Michael Leiters, former CEO of McLaren, as a potential successor to CEO Oliver Blume on Friday, in a move to end Blume’s dual leadership role after criticism from investors.

Blume took the helm at Porsche 10 years ago but for the past three years has also been CEO of parent Volkswagen. Both automakers are undergoing restructuring that some investors have said requires a CEO’s undivided attention.

“Negotiations with Dr. Leiters will be initiated,” Porsche said in a statement on Friday, adding that leading members of the supervisory board had authorised the body to begin talks with Blume on ending his CEO contract at Porsche.

There is no plan for Blume to step down from Volkswagen. Porsche and VW face major challenges from tariffs, weak Chinese demand and a costly shift to electric vehicles.

Several German media reported earlier Friday that Porsche’s supervisory board had agreed to part with Blume so that he could focus on Volkswagen, with the Bild newspaper citing six sources as saying he would leave next year.

Volkswagen did not immediately respond to requests for comment.

During the three years of Blume’s dual role shares in Volkswagen have fallen by more than a third, while Porsche’s stock is down more than half.

Punished for the stock market decline since its listing three years ago, Porsche exited the blue-chip DAX last month.

Porsche has struggled particularly in its key market China and Blume recently announced a costly strategy reversal, away from EVs and back towards combustion engine models.

Reporting by Rachel More. Writing by Friederike Heine; Editing by Mark Potter and Elaine Hardcastle