A pedestrian looks towards the European Central Bank (ECB) skyscraper headquarters in Frankfurt, Germany, on Wednesday, May 23, 2018. Frankfurt has emerged as the biggest winner in the fight for thousands of London-based jobs that will have to be relocated to new hubs inside the European Union after Brexit. Photographer: Krisztian Bocsi/Bloomberg
A pedestrian looks towards the European Central Bank skyscraper headquarters in Frankfurt.  Bank of America will initially move about 200 sales and trading staff to Paris and Frankfurt, it said late lShow more

Investors ask again what can ECB do to save euro from Italian crisis



Investors are again speculating what the European Central Bank could do to solve the problem of a surge in Italy’s debt yields that is causing stress for Italian banks and reviving questions about a euro break up.

The stakes will be huge if a repeat election in the euro zone’s third-largest economy become a de facto referendum on Italy’s membership of the euro and its role in the European Union.

Italy’s economy is at least 10 times bigger than that of Greece, which needed 250 billion euros ($289bn) of euro zone and International Monetary Fund money to bail it out. If Italy needed a similar level of support, the numbers involved would be eye-watering.

Total IMF firepower would only add up to around 500bn euros and even with the 400bn euros that the European Stability Mechanism could conceivably get together, it still wouldn’t completely cover Italy.

Perhaps it’s no wonder then that Italy’s bond markets saw their worst sell-off in 26 years on Tuesday and investors are starting to look inquisitively at the ECB.

“If this continues for another couple of sessions, I think you will have to see some official [European] response,” said Saxo Bank’s head of foreign exchange strategy John Hardy.

“It becomes a ‘whatever it takes’ kind of moment,” he added, recalling the promise made in 2012 by ECB President Mario Draghi to keep the euro intact.

Italian investors are equally anxious to see Frankfurt’s response.

“If the situation doesn’t calm down in the next 36 hours, the ECB will have to weigh in some way,” said Giuseppe Sersale, fund manager at Anthilia Capital Partners in Milan.

Pressure on the government yield curve could clog the central banks’ money transmission mechanism and that alone would give the ECB cover to step in on monetary policy grounds, he said.

So what can the ECB do? After all it’s almost impossible to imagine it would stand by and allow a domestic political crisis in Italy, Mr Draghi’s homeland, descend into another existential crisis for the euro zone.

It is still buying Italian debt as part of its 30bn euro-a-month quantitative easing (QE) program but it doesn’t seem to have limited the damage.

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Italy needs to refinance about 200bn euros a year, analysts estimate, and the ECB’s QE plan had been tipped to end in December.

That could be delayed of course, but it looks like it is the tool that evolved from the 2012 “whatever it takes” pledge - the yet-unused Outright Monetary Transactions (OMT) program - that is being brandished again.

OMT’s benefit is that it is technically unlimited and can be targeted directly at the heat in Rome.

The drawback though is that it would be politically toxic.

Italy’s leading 5-Star Movement and the far-right League parties have shown a dislike for the euro, and in Germany there has long been concerns that use of OMT would be akin to propping up a government which goes well beyond its mandate.

“It raises a lot of issues again, but if we get into a situation where Italy starts to slip into a crisis this is potentially a very big deal,” said one European-based monetary official, who requested anonymity due to the issue’s sensitivity.

“The size of the problem is bigger than anything we have had to deal with,” he added.

Rules laid out by the ECB for OMT usage are strict and effective conditionality attached to an appropriate European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) program.

Such programs can take the form of a full EFSF/ESM macroeconomic adjustment program or a precautionary program (Enhanced Conditions Credit Line), provided that they include the possibility of EFSF/ESM primary market purchases.

Such demands would take time and could cause fireworks in Italy. Much of 5-Star and League’s political popularity has been built on a perception, among parts of the Italian population, that Rome has lost control of Italy’s fate to Brussels.

"Italy knows the rules." Vitor Constancio, the ECB's soon-to-retire Vice President said in a Spiegel magazine on Tuesday about the conditionality for the ECB using its OMT tool. "They might want to read them again."

For nervous financial markets, it looks like another game of euro zone chicken where they wait to see who swerves first.

The risk of a euro break-up forced the ECB’s hand six years ago and its OMT and the cheap LTRO funding programs before that shows it can be creative when the politics gets ugly.

But the difference today is whether Italy wants that help or will instead choose scrap the euro or quit the European Union, or “Quitaly”, which is a different proposition for the ECB and euro policymakers entirely.

Francesco Papadia, the former ECB head of market operations who helped construct the OMT plan thinks that unless there is a credible reassurance in Italy that an exit from the euro is out the question, markets won’t calm down.

“The way the ECB could help is OMT, but the OMT requires a (ESM) program and a program requires a government and Italy does not have that.”

Without that reassurance on Italy’ future in the euro, the ECB would be trying to save “a country that doesn’t want to be saved,” Mr Papadia said. “I would find it very difficult for the Governing Council to approve that.”

Everton Fixtures

April 15 - Chelsea (A)
April 21 - N. Forest (H)
April 24 - Liverpool (H)
April 27 - Brentford (H)
May 3 - Luton Town (A)
May 11 - Sheff Utd (H)
May 19 - Arsenal (A)

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

The Boy and the Heron

Director: Hayao Miyazaki

Starring: Soma Santoki, Masaki Suda, Ko Shibasaki

Rating: 5/5

SPECS

Engine: 1.5-litre 4-cylinder
Power: 101hp
Torque: 135Nm
Transmission: Six-speed auto
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The specs

Engine: 1.5-litre 4-cylinder
Transmission: CVT
Power: 119bhp
Torque: 145Nm
Price: Dh,89,900 ($24,230)
On sale: now

TWISTERS

Director:+Lee+Isaac+Chung

Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos

Rating:+2.5/5

The years Ramadan fell in May

1987

1954

1921

1888

UAE athletes heading to Paris 2024

Equestrian
Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).


Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).


Cycling
Safia Al Sayegh (women's road race).

Swimming
Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics
Maryam Mohammed Al Farsi (women's 100 metres).

States of Passion by Nihad Sirees,
Pushkin Press

The specs: 2019 Audi A7 Sportback

Price, base: Dh315,000

Engine: 3.0-litre V6

Transmission: Seven-speed automatic

Power: 335hp @ 5,000rpm

Torque: 500Nm @ 1,370rpm

Fuel economy 5.9L / 100km

Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
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The biog

Name: Dhabia Khalifa AlQubaisi

Age: 23

How she spends spare time: Playing with cats at the clinic and feeding them

Inspiration: My father. He’s a hard working man who has been through a lot to provide us with everything we need

Favourite book: Attitude, emotions and the psychology of cats by Dr Nicholes Dodman

Favourit film: 101 Dalmatians - it remind me of my childhood and began my love of dogs 

Word of advice: By being patient, good things will come and by staying positive you’ll have the will to continue to love what you're doing

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

Herc's Adventures

Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5

ALRAWABI SCHOOL FOR GIRLS

Creator: Tima Shomali

Starring: Tara Abboud, Kira Yaghnam, Tara Atalla

Rating: 4/5

Sri Lanka-India Test series schedule

1st Test July 26-30 in Galle

2nd Test August 3-7 in Colombo

3rd Test August 12-16 in Pallekele

UAE athletes heading to Paris 2024

Equestrian

Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).

Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).

Cycling
Safia Al Sayegh (women's road race).

Swimming

Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics

Maryam Mohammed Al Farsi (women's 100 metres).

Slow loris biog

From: Lonely Loris is a Sunda slow loris, one of nine species of the animal native to Indonesia, Malaysia, Thailand and Singapore

Status: Critically endangered, and listed as vulnerable on the International Union for Conservation of Nature red list due to growing demand in the global exotic pet trade. It is one of the most popular primate species found at Indonesian pet markets

Likes: Sleeping, which they do for up to 18 hours a day. When they are awake, they like to eat fruit, insects, small birds and reptiles and some types of vegetation

Dislikes: Sunlight. Being a nocturnal animal, the slow loris wakes around sunset and is active throughout the night

Superpowers: His dangerous elbows. The slow loris’s doe eyes may make it look cute, but it is also deadly. The only known venomous primate, it hisses and clasps its paws and can produce a venom from its elbow that can cause anaphylactic shock and even death in humans

Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

Company profile: buybackbazaar.com

Name: buybackbazaar.com

Started: January 2018

Founder(s): Pishu Ganglani and Ricky Husaini

Based: Dubai

Sector: FinTech, micro finance

Initial investment: $1 million

Company Profile

Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000

SPECS

Engine: Dual electric motors with 102kW battery pack

Power: 570hp

Torque: 890Nm

Range: Up to 428km

On sale: Now

Price: From Dh1,700,000

Tax authority targets shisha levy evasion

The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.

Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".

The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.

He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.

"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.

As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.

Tips for newlyweds to better manage finances

All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.

Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.

Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.

Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.

Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.

Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.

Miss Granny

Director: Joyce Bernal

Starring: Sarah Geronimo, James Reid, Xian Lim, Nova Villa

3/5

(Tagalog with Eng/Ar subtitles)

Tips for taking the metro

- set out well ahead of time

- make sure you have at least Dh15 on you Nol card, as there could be big queues for top-up machines

- enter the right cabin. The train may be too busy to move between carriages once you're on

- don't carry too much luggage and tuck it under a seat to make room for fellow passengers

The lowdown

Badla

Rating: 2.5/5

Produced by: Red Chillies, Azure Entertainment 

Director: Sujoy Ghosh

Cast: Amitabh Bachchan, Taapsee Pannu, Amrita Singh, Tony Luke

COMPANY PROFILE

Company name: Nomad Homes
Started: 2020
Founders: Helen Chen, Damien Drap, and Dan Piehler
Based: UAE and Europe
Industry: PropTech
Funds raised so far: $44m
Investors: Acrew Capital, 01 Advisors, HighSage Ventures, Abstract Ventures, Partech, Precursor Ventures, Potluck Ventures, Knollwood and several undisclosed hedge funds


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