LONDON — What faint hopes remained that Europe was recovering from the economic catastrophe delivered by the pandemic have disappeared as the lethal virus has resumed spreading rapidly across much of the continent.
After sharply expanding in the early part of the summer, Britain’s economy grew far less than anticipated in August — just 2.1 percent compared with July, the government reported on Friday, adding to worries that further weakness lies ahead.
Earlier in the week, France, Europe’s second-largest economy, downgraded its forecast for the pace of expansion for the last three months of the year from an already minimal 1 percent to zero. Over all, the national statistics agency predicted the economy would contract by 9 percent this year.
The diminished expectations are a direct outgrowth of alarm over the revival of the virus. France reported nearly 19,000 new cases on Wednesday — a one-day record, and almost double the number the day before. The surge prompted President Emmanuel Macron to announce new restrictions, including a two-month shutdown of cafes and bars in Paris and surrounding areas.
In Spain, the central bank governor warned this week that the accelerating spread of the virus could force the government to impose restrictions that would produce an economic contraction of as much as 12.6 percent this year.
The European Central Bank’s chief economist cautioned on Tuesday that the 19 countries that share the euro currency might not recover from the disaster until 2022, with those that are dependent on tourism especially vulnerable.
Summer increasingly feels like a long time ago.
In July, with infection rates down, lockdowns lifted and many Europeans indulging in the sacred ritual of the summer holiday, signs of revival appeared abundant. Many European economies expanded strongly as people returned to shops, restaurants and vacation destinations. The most optimistic economists began celebrating a so-called V-shaped recovery, featuring a bounce-back just as steep as the plunge that had preceded it.
Hopes had also been buoyed by a landmark agreement forged by the European Union to raise a 750 billion euro ($883 billion) relief fund through the sale of bonds backed collectively by all members. That move transcended years of resistance from debt-averse northern European countries, while signaling that the European bloc — not generally known for cooperation in the face of crisis — had achieved a new state of solidarity.
But most economists assumed that better days would last only so long as the virus could be contained. Restrictions imposed by governments appeared less important than the willingness of consumers to interact with other people, returning to workplaces and shopping areas.
In a report this week, Oxford Economics, a research institution in London, analyzed data across the eurozone, noting that much of the improvement in the late summer was the result of factories springing back to life after shutdowns. For expansion to continue, people have to buy the products the factories are making. The willingness to spend is influenced by confidence — whether people feel safe enough to move about; whether they fear they could lose their jobs.
By September, as coronavirus cases climbed anew, consumption was falling off.
“With the health situation unlikely to improve in the near term, we expect the recovery to slow again over the next few weeks,” concluded the report, which was written by Moritz Degler, an Oxford Economics senior economist.
The economic slowdown is unfolding just as some European economies begin to taper off the extraordinary sums they have expended to protect workers from joblessness, prompting worries about a seemingly inevitable increase in unemployment.
In Britain, the government, led by Prime Minister Boris Johnson, has been aggressively subsidizing wages at businesses hurt by the pandemic so long as employers do not fire their workers. The public covered 80 percent of wages when the program began in the spring. Even after a gradual easing, the government is picking up 60 percent of the cost this month.
But the furlough program, which has cost the Treasury 39 billion pounds (about $50 billion), is set to expire at the end of the month. The overseer of the public finances, Rishi Sunak, has been expressing worries about the size of Britain’s debts, while pledging to square the books. Under a slimmed-down replacement program he announced last month, the government would cover only 22 percent of wages going forward.
But the rapidly deteriorating economic outlook has forced Mr. Sunak to go back to the well. On Friday, in anticipation of tighter limits on businesses, he announced a new furlough program that would cover two-thirds of wages at businesses that are required to shut down as virus cases increase rapidly, and that would also increase grants. The measures could be particularly significant in industrial areas in the north of England, where a surge of electoral support for the Conservative Party in last year’s elections helped keep Mr. Johnson in office.
Fears of diminishing fortunes in Britain have been amplified by the possibility that the nation could crash out of the European Union at the end of the year — completing the tortuous process of Brexit — absent a deal governing future trade. That would risk job-killing chaos, especially at ports.
On the other side of the English Channel, the fall has brought a realization that complex hurdles remain before the European Union’s relief fund can be administered, limiting prospects in the worst-hit countries like Spain and Italy.
The Spanish prime minister, Pedro Sánchez, on Wednesday announced a stimulus spending plan worth €72 billion ($85 billion), with four-fifths of the money planned to come from the European fund.
Spain may have to wait for that money. The fund is supposed to be operational by January, yet almost certainly will confront delays as European Union members debate conditions on its distribution — especially rules aimed at forcing Hungary and Poland to abide by the democratic norms of the bloc.
The continent’s prospects for recovery are further restrained by rules that limit debts by members of the European Union and curb spending. Those strictures have been suspended, but they will return eventually, limiting growth prospects.
Italy is counting on receiving €209 billion ($246 billion) from the European relief fund, but the government is also pledging to bring down its public debt, which exceeded 134 percent of annual economic output at the end of last year. Such austerity, just as the pandemic increases costs for medical care, will almost certainly plunge Italy into a longer and deeper recession.
Ant Challenged Beijing and Prospered. Now It Toes the Line.
As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.
“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.
“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”
The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.
The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.
More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.
These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.
The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.
Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”
“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.
Ant declined to comment, citing the quiet period demanded by regulators before its share sale.
The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.
After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.
China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.
Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.
“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”
China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.
Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.
A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.
People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.
The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”
Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.
“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”
But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.
“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”
The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.
Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.
The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.
“Living beyond my means forced me to work harder,” Ms. Huang said.
First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.
Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.
Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.
China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.
Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.
Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.
In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.
More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.
Ant does not talk much anymore about expanding in the United States.
Ana Swanson contributed reporting.
Good Is the New Cool When It Comes to a Successful Brand
October 27, 2020 5 min read
Opinions expressed by Entrepreneur contributors are their own.
Afdhel Aziz is a thought leader, writer, speaker, consultant and board advisor with 20 years of experience working as a visionary marketer at companies like Procter & Gamble, Nokia, Heineken and Absolut Vodka. Despite creating world-class pop culture partnerships with everyone from Lady Gaga to the TED Conferences, he felt there was more he could be contributing to society.
This search inspired him to co-write Good is the New Cool: Market Like You A Give a Damn. The book’s success led Aziz to quit his job and follow his own purpose. Now he is on a mission to help companies and individuals find purpose and meaning in their work and in their lives.
An internationally acclaimed keynote speaker, Aziz is also the co-founder and Chief Purpose Officer of Conspiracy of Love. The purpose consultancy supports a long roster of clients, including iconic brands like Adidas, Red Bull, Oreo and Microsoft, to Fortune 500 companies like Unilever, AB Inbev, Mondelez and Diageo.
“Goodisthenewcool.org is now a global movement of good, with events and podcasts in association with Soho House, conferences in LA, Sydney and Melbourne, and an online community of 20,000 purpose-driven leaders in business and culture,” Aziz says.
Aziz spoke with Jessica Abo to discuss Conspiracy of Love, why businesses should take the “good is the new cool” approach and why it’s not too late for companies to do better.
Jessica Abo: Tell us about your book Good is the New Cool: Market Like You A Give a Damn.
Afdhel Aziz: It’s an exploration of the whole world of purpose driven marketing. Today, brands more than ever are asked to take stands. When you think about Nike with Colin Kaepernick, for example, consumers are asking brands to take positions in social issues. We wanted to explore that in this book that I co-wrote with Bobby Jones. The expectation for brands to help solve societal problems has never been more sky high.
In the wake of Covid-19 and Black Lives Matter, consumers are demanding that the brands in their lives stand up for their values. Consumers are voting with their wallets, we like to say, and making sure that if they’re going to invest in a brand‘s products and services, that brand better be helping solve issues, whether they’re environmental issues or social issues. There is an incredibly high level of scrutiny at the moment that brands are under and expectations keep growing as well.
What are some of the biggest mistakes brands make?
Aziz: One of the biggest mistakes brands make when they venture into this territory of social impact is positioning themselves as the hero, riding in on a white horse to solve the problem. We like to preach to our clients the maxim “be the helper not the hero.” Brands who do this find a way to make the consumers the hero of the journey to give them platforms to help society at large. And this way you can avoid the trap of coming across as too egotistical when talking about how you’re going to attack this problem.
Do brands have to be perfect to start doing good?
Aziz: Brands do not have to be perfect to do some good. In fact, I would say that no brand is perfect, just like no human being is perfect. It’s important not to be paralyzed by the lack of perfection. Every brand has its problem, has its issues. As long as they’re transparent about it and say, “Listen, here’s the plan that we’re putting into place to solve this problem, bear with us while we do it. But in the meantime, here’s another problem that we really want to solve in society, will you help us?” Taking that humble posture really helps people understand the genuineness of your intentions and that really makes a difference when asking people to participate.
What advice do you have for brands that want to do some good in the world?
Aziz: The advice that we have for brands who want to do some good in the world is, first of all, listen. Listen to your employees, listen to your consumers, look at the culture in the world today and try and find a way of thinking of people as citizens, not just consumers. Think about the broad range of issues that they care about, and then figure out a way that you, as a brand can get involved in helping to solve some of those problems as well. We like to say brands should solve problems from the everyday to the epic. It doesn’t all have to be about climate change and racial inequality. Maybe there are everyday problems as well that you as a brand can get involved in to make people’s lives a little bit better.
What Counts as Race Discrimination? A Suit Against JPMorgan Is a Test
Over 18 years of working as a secretary at JPMorgan Chase, Wanda Wilson had learned to brush aside remarks directed at her race.
“Wanda, do you mind if I tell a Black joke?” a colleague once asked her. Another co-worker told her that she disliked Black people in general but made an exception for Ms. Wilson.
Ms. Wilson saw no reason to complain. JPMorgan had been a good employer, giving her opportunities to rise through the secretarial ranks and providing assistance during a fraught time in her personal life. She felt proud defending her career to her family, which included several prominent civil rights activists. (Her mother is the poet Amina Baraka, and her stepfather was Amiri Baraka, the playwright and poet. Her younger brother is Ras Baraka, the mayor of Newark.)
But things soured in 2016 after a new colleague began to bully Ms. Wilson and order her around, according to a lawsuit Ms. Wilson filed against JPMorgan and its chief executive, Jamie Dimon. For the first time, Ms. Wilson felt that she was not on equal footing with her white colleagues, according to the suit. She complained to JPMorgan officials, but the bank’s response shattered her faith in her employer, she said. After she was unable to find a different job within JPMorgan, the bank fired her. She then sued, alleging race discrimination and retaliation and seeking an unspecified amount in damages.
JPMorgan said its officials had done everything in their power to make things right for Ms. Wilson. “The firm denies that it engaged in any race discrimination or harassment or retaliation with respect to Ms. Wilson’s employment,” said Joe Evangelisti, a JPMorgan spokesman.
The bank tried to have the lawsuit, filed in 2018, dismissed. This month, a judge ruled that the two sides should engage in mediation instead.
Wall Street has come under growing scrutiny for how it treats people of color, and Black employees in particular. Last year, The New York Times detailed allegations of racism at Phoenix-area branches of JPMorgan. Recently, a former head of global diversity at Morgan Stanley, a Black woman, sued the bank for discrimination.
But while such cases claim broad and systemic discrimination involving banks, Ms. Wilson’s lawsuit tells the complicated story of interactions between co-workers that can carry racist undertones. It shows how allegations of racism in a workplace can be difficult to verify, even when a company conducts an investigation. That’s especially so in the absence of explicit language or actions — such as a racial slur or blackface — that are easily identifiable as racist.
“This isn’t the ’60s or the ’50s,” said David Carlor, a financial adviser who is Black. “No one’s going to tell you: ‘Because you’re Black, go get us coffee.’ You’re just going to find that you’re the one that’s being treated most disrespectfully in the office.”
At JPMorgan, Ms. Wilson was often the first to arrive and the last to leave, according to three of her former colleagues, who spoke on the condition of anonymity. She got lunch and coffee for her superiors and ran errands that seemed well outside her job description, like buying a mirror for her boss’s office.
In March 2016, Ms. Wilson joined the audit department as an executive administrative assistant — a coveted position among secretaries because it involved handling duties for one senior executive in that department.
Around the same time, Janet Jarnagin was also assigned to Ms. Wilson’s boss as a team leader. A midlevel executive, Ms. Jarnagin’s duties included helping the audit department prepare presentations and reports, according to a publicly available résumé.
Over the next few months, Ms. Jarnagin began ordering Ms. Wilson to hang coats, get coffee and lunch, or carry out requests — such as making photocopies — by visitors to the department, according to the lawsuit.
Once, Ms. Jarnagin stood up from her desk and announced that she was “sending Wanda out for coffee,” asking if anyone else wanted to place an order with her. Other Black secretaries who had overheard Ms. Jarnagin later teased Ms. Wilson about being treated like Kizzy, an enslaved character in the book and television mini-series “Roots.”
Ms. Wilson said that she asked Ms. Jarnagin not to use the term “sending” any more, but that Ms. Jarnagin ignored her. Ms. Wilson described the incident in a 2017 interview with a JPMorgan official, a recording of which she provided to The Times.
In her lawsuit, Ms. Wilson described how Ms. Jarnagin had been making these demands only of her — the lone Black secretary in the vicinity. She tried to distance herself. When she rearranged her desk so that the two women no longer had an unobstructed view of each other, Ms. Jarnagin mocked her for trying to build a “Mexican wall” out of a stack of folders on her desk, according to the lawsuit.
Ms. Wilson complained about Ms. Jarnagin to their boss, who told her to work things out on her own, according to the complaint. She then told a human resources representative that Ms. Jarnagin was ordering her around and bad-mouthing her work. JPMorgan’s Mr. Evangelisti said the bank had begun investigating Ms. Wilson’s complaints immediately.
Henry Klingeman, a lawyer for Ms. Jarnagin, dismissed the allegations. “In the high-intensity, high-stress world of New York banking, Janet was no more rude than a male employee who is assertive,” he said in an email. “That she asked an administrative assistant to get coffee for senior management is one of the criticisms made against her. There is nothing to this, much less implied racism.”
Ms. Wilson eventually emailed Mr. Dimon: “I have followed the chain of command and have not received any assistance.” Mr. Dimon did not personally respond, but her complaint was promptly shared with senior bank officials who stepped up their investigation.
Bank officials interviewed people in the immediate vicinity of Ms. Wilson and Ms. Jarnagin, two people familiar with the investigation said. The investigators determined that Ms. Jarnagin had behaved rudely toward Ms. Wilson. However, since Ms. Jarnagin had been rude in the past to other employees who were not Black, they concluded that her behavior was not racially motivated, the people said.
Mr. Evangelisti said the officials’ conclusions had been “based on information provided by Ms. Wilson at the time.”
Ms. Jarnagin was given two “coaching” sessions, including one by her boss, the people said. She was never formally disciplined, but was advised to treat Ms. Wilson more gently, they said. Ms. Jarnagin left JPMorgan in November 2017.
JPMorgan officials also did a broader “climate study” of the area where Ms. Wilson worked, the people familiar with the matter said. The study concluded that there did not appear to be a problem with racism.
However, two Black employees interviewed for the study, who did not want to be identified for fear of retaliation, told The Times that race was a constant undertone in their interactions with non-Black employees. One said Black secretaries felt it was harder for them to get promotions, and they believed they were underpaid. But the Black employees said they downplayed the racism they witnessed to bank officials, partly because it wasn’t directed at them.
JPMorgan officials have recently acknowledged that some employees still do not feel safe speaking up. In March, the bank announced that it had reviewed its anti-discrimination practices and identified several areas for improvement.
Things didn’t improve for Ms. Wilson after her complaint.
Mr. Evangelisti said JPMorgan gave her nearly a year to search for a new job inside the bank as well as a raise and bonus during that time. Ms. Wilson said the only job the bank offered her was a role working for a man who had become enraged at her over a disagreement with her boss when she worked in the audit department.
Mr. Evangelisti said the role would have come with the same title, grade and compensation as her prior job, “but Ms. Wilson declined the role and refused to provide any context about an ‘unpleasant exchange’ she claims to have had.”
Buy the AirPods Pro for $200 Before This Rare Offer Disappears
The 10 Best Deals of October 29, 2020
Through the End of the Week, Get an Extra Plan Free When You Sign up for 2 Years of NordVPN
Check out some wonderful Playdate game demos, including a low-fi Doom
Puerto Rican Piñon
Still no first stimulus check? How to track it and report your absent payment to the IRS – CNET
Tech3 months ago
Check out some wonderful Playdate game demos, including a low-fi Doom
Food4 weeks ago
Puerto Rican Piñon
Tech3 months ago
Still no first stimulus check? How to track it and report your absent payment to the IRS – CNET
Science2 months ago
Elon Musk promises demo of a working Neuralink device on Friday
Tech3 months ago
Spotify Duo vs. Family vs. Individual: Which Premium Spotify plan is best? – CNET
Tech1 month ago
Fitbit Sense review: enough bugs to raise your heart rate
Sports3 weeks ago
Astros bash way past Athletics to reach ALCS
Entertainment2 months ago
Kim Kardashian Appears To Give Birth To Kylie Jenner In Leaked Kanye West & Tyga Video — Watch