China, the world’s largest bilateral creditor, has historically played a key role in financing infrastructure projects across the Global South

International News via Reuters:

Developing nations are now paying more to service debt owed to China than they receive in new loans, a shift that risks deepening economic strain and slowing climate investment, a report released on Friday by Boston University’s Global Development Policy Center found.

The study, titled Reviving Chinese Development Finance in the Global South, revealed that net debt transfers—calculated as new loan disbursements minus principal and interest repayments—turned negative in 2022 and 2023, with developing nations repaying $3.9 billion more annually than they borrowed.

China, the world’s largest bilateral creditor, has historically played a key role in financing infrastructure projects across the Global South, committing over $472 billion through its policy banks—the China Development Bank and Export-Import Bank—between 2008 and 2024.

These funds supported more than 900 projects worth $316 billion in transport, energy, information technology, and water infrastructure, which “significantly contributed to public asset building, economic growth and poverty alleviation in the Global South,” authors Rebecca Ray, Kevin Gallagher, Zheng Zhai, Marina Zucker-Marques, and Yan Liang wrote in the study.

A revival by Beijing to overseas development finance could avoid derailing growth and climate investment across poorer nations.

“Countries across the Global South are in urgent need of a stepwise increase in financing to invest in low-carbon, socially inclusive and resilient economic growth,” the authors said.

The paper proposed five steps which would be mutually beneficial for China and the Global South: refinancing loans in distress, issuing RMB-denominated bonds, expanding green lending, supporting cooperative foreign investment and boosting South–South trade.

“Restarting growth-enhancing development finance in the Global South will help spur demand for Chinese exports,” they said.

Some of this is already happening. In June, China said it was making progress on removing all tariffs on the African states with which it has diplomatic ties.

Afreximbank launched its debut yuan denominated panda bond in April. In South Africa, the China-Africa Development Fund is preparing to bid for independent energy transition projects in Africa’s most industrialized economy.

And in Kenya, Finance Minister John Mbadi said this week that three Chinese railway construction loans have been converted from dollars to yuan to save on interest costs.

Reporting by Colleen Goko, Editing by Nick Zieminski

Italy is among the EU countries that have made extensive use of golden power legislation to protect interests in sectors such as banking, defence and telecommunications

International News via Reuters:

The Italian government will defend its golden powers aimed at shielding strategic assets, its economy minister said on Friday, as Brussels prepares to challenge the legislation.

Italy is among the EU countries that have made extensive use of golden power legislation to protect interests in sectors such as banking, defence and telecommunications.

Minister Giancarlo Giorgetti told reporters in Luxembourg national security was not for European institutions to judge.

“National security is the exclusive responsibility of the national government, and we intend to defend it in some way,” he said at the end of a meeting among European finance ministers.

Reuters reported on Thursday the European Commission was set to act against Rome as part of a push against EU countries hampering bank consolidation in Europe, citing sources close to the matter.

Brussels will launch two separate legal proceedings under single market and merger rules respectively, the sources said.

The EU executive, which had already warned Italy that it could be breaching EU rules by vetting bank mergers through golden powers, declined to comment on the Reuters story but said it had received Italy’s replies in both cases.

“The Commission is currently assessing Italy’s response and will consider next steps,” a Commission spokesperson said.

The EU move was prompted by Italy’s intervention in a proposed bank merger involving the country’s second-biggest lender UniCredit, which withdrew its offer for smaller rival Banco BPM on July 22, blaming government interference.

Among several conditions for the deal to proceed, Italy had told UniCredit to halt activities in Russia by early 2026 in order to prevent savings collected by Banco BPM from funding Moscow’s war against Ukraine. Rome kept this decree in place despite the collapse of the deal.

The EU will order Italy to withdraw the decree that set terms for UniCredit’s failed bid, the sources said, while challenging the overall golden power legislation through a separate infringment procedure.

“When the EU’s remarks arrive, we will evaluate them. I am simply saying that the government is applying an effective law. If you want to change the law, it is up to parliament to do so,” Giorgetti said when asked about the Reuters report.

The EU Commission plans to send two letters to Italy by mid-November to launch its move, the sources added.

If the EU rules that the conditions imposed on UniCredit are unlawful, the bank will be able to assess whether to seek damages from Italy.

Giorgetti, however, signalled the government was ready to challenge the proceedings in an EU court.

Reporting by Giuseppe Fonte; Editing by Elaine Hardcastle, Louise Heavens and Gavin Jones

Protesters have blocked roads with rocks and in some cases hurled stones at security forces who have responded with rounds of teargas

International News via Reuters:

Madagascar’s newly appointed prime minister, General Ruphin Fortunat Zafisambo, condemned on Friday what he said was “excessive use of force” by both security personnel and protesters, after three weeks of anti-government demonstrations around the island nation.

Protesters have blocked roads with rocks and in some cases hurled stones at security forces who have responded with rounds of teargas. One woman whose husband was shot dead on September 25 when he went to close his shop, told Reuters this week that his death had been “entirely preventable”.

The demonstrations were initially sparked by water and electricity shortages but later expanded to include calls for President Andry Rajoelina to step down, apologise to the nation and dissolve the senate and election commission.

The United Nations says at least 22 people were killed and more than 100 injured in the initial days of the protests – figures the government has rejected. Rajoelina put the number of those killed at 12 and said they were mostly looters.

On Friday, hundreds of protesters took to the streets in the capital Antananarivo again calling for Rajoelina to go.

“We firmly condemn all excesses, and we totally condemn the excessive use of force among Malagasy people. Malagasy values, our sense of solidarity and brotherhood, must prevail, whether within the military or among the protesters,” Zafisambo told reporters when asked to respond to criticism of the use of force by security forces.

Also on Friday, the United Nations Office on Human Rights urged security forces to refrain from using unnecessary force against demonstrators.

“We’re receiving troubling reports of continued violence against protesters by the gendarmerie, particularly in #Antananarivo,” it said on its X account.

Rajoelina appointed Zafisambo and a new defence and security minister after dissolving the previous government last week. 

On Wednesday, he told a meeting in his office he was ready to resign if he failed to fix Madagascar’s power problems within a year.

The unrest comes at a vulnerable time for Madagascar’s export-reliant economy. While the country is best known for producing most of the world’s vanilla, other exports including nickel, cobalt, textiles and shrimp are also vital to foreign earnings and employment.

Protesters’ call for a nationwide strike on Thursday went largely unheeded.

One business executive who did not wish to be named told Reuters the disruptions from the protest and an ensuing curfew had exacerbated the already dire economic situation in the country.

Writing by George Obulutsa; Editing by Ammu Kannampilly

Macron, 47, is searching for his sixth prime minister in under two years and will need to find a figure whose appeal spans the centre-right to centre-left

International News via Reuters:

President Emmanuel Macron welcomed mainstream political leaders to a crunch meeting at the Elysee ahead of a self-imposed late-Friday deadline to name a new prime minister, as the country’s central bank chief warned political turmoil was sapping growth.

Macron, 47, is searching for his sixth prime minister in under two years and will need to find a figure whose appeal spans the centre-right to centre-left in order to steer the budget for 2026 through a fragmented and fractious parliament.

Ahead of the meeting, the president’s Elysee office said the gathering needed to be a “moment of collective responsibility,” which political pundits quickly interpreted as a signal he could call snap parliamentary elections if no consensus candidate was found.

Party leaders from the left, right and centre arrived at the Elysee, but the far-right National Rally (RN) and hard-left France Unbowed (LFI) – two of the largest political parties in the National Assembly – were excluded.

It was unclear how long Friday’s talks would last. Macron’s 48-hour deadline to name a new premier is due to expire later on Friday night.

WHO MIGHT MACRON APPOINT AS PRIME MINISTER?

The daily Le Parisien newspaper reported that Macron intended to reappoint Sebastien Lecornu, who resigned as prime minister on Monday after just 27 days in the post, and that the president did not rule out a snap vote if other party leaders reject the proposal. Lecornu was not due to attend the meeting at the Elysee, which did not respond to a request for comment.

Other names that have been floated in political circles include veteran centrist Jean-Louis Borloo, the head of the public auditor Pierre Moscovici, and Nicolas Revel, a technocrat who leads the Paris hospitals administration.

Reappointing Lecornu would risk alienating the political leaders whose backing Macron needs to form a broad-based government that can get a budget over the line. 

COMPLEX BUDGET TALKS

Wrangling over a budget that can both rein in the country’s deficit while meeting the conflicting demands of both the left and conservatives has been going on for weeks, with Socialist demands for a repeal of a 2023 pensions reform and for heavier taxation of the rich proving big stumbling blocks.

“People tell me: ‘He’s going to test the Lecornu 2 hypothesis on you.’ If that’s the case, I wish him good luck,” Green party chief Marine Tondelier told TF1 television.

Gabriel Attal, a former Macron prime minister and head of the president’s Renaissance party, cautioned against naming the next premier without wider support.

“I fear that trying the same method … of naming a prime minister before there has been a compromise will produce the same effects,” Attal told France 2 television.

SNAP ELECTION WOULD POSE RISKS FOR MAINSTREAM PARTIES

France’s mainstream parties are keen to avoid a snap election. Opinion polls forecast the RN would be the main beneficiary and that another hung parliament would be the most likely result. 

The crisis is the deepest that France, the euro zone’s second-largest economy, has seen for decades. The turmoil was precipitated in part by the president’s failed gamble on a snap election last year that further weakened his minority in parliament.

The central bank chief, Francois Villeroy de Galhau, forecast the political uncertainty would cost the economy 0.2 percentage points of gross domestic product. Business sentiment was suffering but the economy was broadly fine, he said.

“Uncertainty is … the number one enemy of growth,” Villeroy told RTL radio.

Villeroy said it would be preferable if the deficit did not exceed 4.8% of GDP in 2026. The deficit is forecast to hit 5.4% this year, nearly double the European Union’s cap. 

Macron’s second-to-last prime minister, Francois Bayrou, was ousted by the National Assembly over his plans for 44 billion euros in savings to bring the deficit down to 4.6%.

Rating agencies issued a fresh round of warnings about France’s sovereign credit score this week after Lecornu said on Monday his government was resigning, just 14 hours after he had announced his cabinet line-up.

Reporting by Dominique Vidalon and Benjamin MalletWriting by Richard LoughEditing by Alison Williams, Frances Kerry and Toby Chopra

BHV owner Société des Grands Magasins (SGM) has faced a wave of criticism in France

International News via Reuters:

Workers staged a demonstration at Parisian department store BHV on Friday to protest against management and its deal with Shein granting the fast-fashion retailer a permanent space on the seventh floor.

BHV owner Société des Grands Magasins (SGM) has faced a wave of criticism in France, including from the mayor of Paris, since last week’s announcement of the partnership with Shein, which ships cheap clothes straight from factories in China to shoppers in more than 160 countries.

Dozens of workers gathered, waving labour union flags, outside the department store at 3:30 p.m. local time (1330 GMT) where union representatives and city hall officials made speeches.

Late payments to brands at the department store, which has struggled for years, had already led to shortages of products, hurting sales and leaving workers concerned for their jobs, according to a union statement read out at the protest.

UNIONS OPPOSE DEAL, SGM SAYS IT WILL ATTRACT YOUNG SHOPPERS

The announced departure of several French brands from BHV following the Shein deal is now compounding those concerns, the union members said.

“Our customers have already left because they can’t find what they want, but they’re also concerned and don’t approve of Shein’s arrival,” Florine Biais, a BHV worker and union representative, told Reuters at the protest.

Asked about the late payments, SGM said the issue was caused by a shift to new payment systems since it acquired BHV in November 2023 and would be resolved within a few weeks.

SGM has said the Shein store would attract younger shoppers and was part of its plan to modernise BHV.

“We are convinced this partnership is beneficial for the group and its employees,” SGM said in an emailed statement on Friday.

Shein spokesperson Quentin Ruffat said the planned store would help increase the number of visitors to BHV and benefit other retailers.

Shein, founded in China in 2012, has grown rapidly to become the world’s biggest fast-fashion retailer. It has been criticised by politicians, regulators and other retailers around the world over working conditions at its factories, high carbon emissions, and a lack of public information about its management and finances.

Hit by fines of 191 million euros ($221 million) in total from French and Italian regulators since July, the company is trying to tighten its internal controls to better comply with rules and improve its reputation with consumers.

($1 = 0.8636 euros)

Reporting by Helen Reid and Dominique Patton; Editing by Kirsten Donovan and Joe Bavier