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European Edition
27th March 2023
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THE HOT STORY
German union boss says strike over pay is a matter of survival
Frank Werneke, head of Germany’s Verdi labour union, has told Bild am Sonntag that massive strike action planned for today is a "matter of survival" for many thousands of people who are fighting for higher wages amid surging inflation. The strike, which had already commenced at Munich Airport on Sunday, is Germany's largest in decades and is expected to cause widespread disruption on railways and at airports in Europe's biggest economy. "The people are not only underpaid, they are hopelessly overworked," Werneke said, adding "The strike is necessary to make clear to employees that we will vehemently stand up for our demands . . . It is a matter of survival for many thousands of employees to get a considerable pay rise." Verdi is calling for a 10.5% wage increase, which would see pay rising by at least €500 ($538) per month.
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HIRING
UK firms struggle to fill gaps in the workforce
Analysis by ManpowerGroup shows that around 80% of UK companies have reported difficulty filling jobs. This is the highest percentage since 2006 and marks an increase on the 35% recorded in pre-pandemic 2019. Michael Stull, director at ManpowerGroup UK, said: “Talent shortages are always an area of concern for employers, but the real step change in our data can be seen post 2019.” He added that employers were "acutely aware of the growing scarcity of key skills, so they're holding on to and trying to stockpile business-critical talent. Just in time hiring does not work anymore, just in case hiring is more the mantra." Meanwhile, KPMG expects the UK unemployment rate to widen to 4.1% this year, from 3.7% in 2022. Yael Selfin, chief economist at KPMG, has flagged skills shortages and slowing workforce participation as two structural issues that “dominate the longer-term risks to the UK outlook.”
MANAGEMENT
Swiss regulator says Credit Suisse managers could face disciplinary action
The President of Swiss financial regulator FINMA has said it is considering whether to take disciplinary action against managers at Credit Suisse after the lender's rescue by UBS. Marlene Amstad told Swiss newspaper NZZ am Sonntag that the regulator was "still open" as to whether new proceedings would be started, but that its main focus was on "the transitional phase of integration" and "preserving financial stability." When asked whether FINMA is looking into holding current Credit Suisse managers accountable for the collapse of Switzerland's second-largest bank, Amstad said the regulator is "exploring the options," adding "CS had a cultural problem that translated into a lack of responsibilities . . . Numerous mistakes were made over several years."
WORKFORCE
UK employers keen on four-day week
A large number of UK employers would consider offering a four-day week if staff spent the whole time in the office, according to a survey by Hays. A poll of almost 12,000 employers and employees found almost two-thirds of workers would prefer to change to an office-based four-day week, while a third of employers would be more likely to make the switch if staff spent all four days in the workplace. The poll also saw just under two-thirds of employees say they would consider moving to another company if it was offering a shorter week. Gaelle Blake, of Hays UK and Ireland, said: “It’s clear from our research that the appetite for a four-day working week has increased from both professionals and employers . . . However, in reality, only 5% of respondents to our survey are working for an organisation where this is actually happening.”
STRATEGY
Salesforce COO warns of further job cuts
Brian Millham, chief operating officer at Salesforce, has warned that the software firm could cut more jobs, saying a "change and reshape" of the company may be needed to “drive efficiencies.” In January, the firm announced it would cut about 8,000 employees, or 10% of its headcount, and recently reduced an annual employee bonuses by 30%.
LEGAL
UBS and Credit Suisse among banks probed over sanctions busting
The US Justice Department is probing a number of banks, including Credit Suisse and UBS, for helping Russian oligarchs evade sanctions. Subpoenas demanding information from individual bankers were sent before the crisis that engulfed Credit Suisse and its takeover by UBS. It is noted that Credit Suisse looked after as much as $60bn for Russian clients at its peak, generating hundreds of millions of dollars in revenue each year. Separately, Switzerland’s finance minister has said that without the state-brokered takeover of Credit Suisse by rival UBS, there may have been a new global financial crisis. Finance minister Karin Keller-Stutter said Credit Suisse could not have survived without the £2.65bn deal, adding that the collapse of the lender “would have sent other banks into the abyss.” She added that it was “clear to everyone” that a restructuring or liquidation of Credit Suisse "would trigger an international upheaval in the financial markets.”
ECONOMY
IMF warns of increased financial stability risks
The head of the International Monetary Fund (IMF) has warned that the global economy faces increased financial stability risks amid turmoil in the banking industry. Kristalina Georgieva, managing director of the IMF, said: “The rapid transition from a prolonged period of low interest rates to much higher rates necessary to fight inflation inevitably generates stresses and vulnerabilities, as we have seen in recent developments in the banking sector.” Her comments come amid concern over the global banking industry following the failure of Silicon Valley Bank and UBS’ rescue of rival Credit Suisse. Ms Georgieva said policymakers have acted decisively in response to financial stability risks, adding that while actions by central banks “have eased market stresses to some extent . . . uncertainty is high and that underscores the need for vigilance.” Ms Georgieva also said that uncertainties in the world economy remained “exceptionally high,” adding that the outlook for the global economy over the medium-term is likely to “remain weak.”
INTERNATIONAL
China detains staff, raids office of US firm
The office of US corporate due diligence firm Mintz Group in Beijing has been raided by Chinese authorities. Five local staff were detained, the company said. Reuters says the incident stokes concern among foreign companies in China just as it hosts an international economic forum. Mintz Group's website says the company specialises in background checking, fact gathering and internal investigations. The company has 18 offices around the world and hundreds of employees. It said it was ready to work with Chinese authorities to "resolve any misunderstanding that may have led to these events" and that its top concern was the safety and wellbeing of colleagues in China. One US business community person has told Reuters the incident sent a "remarkable signal" that Beijing wants foreign money and technology but that it won't accept credible US firms conducting due diligence on Chinese partners or the business environment. "Red alerts should be going off in all boardrooms right now about risks in China," the source said.
Banks tell staff not to poach clients from stressed peers
Banking giants including JPMorgan, Citigroup and Bank of America have told their staff not to poach clients from stressed US lenders who were besieged by customers withdrawing their money earlier this month. JPMorgan, for example, told all employees in a memo that they "should never give the appearance of exploiting a situation of stress or uncertainty." A spokesperson for the largest US bank said: "We all have a vested interest in keeping America's financial system strong and thriving . . . It's the envy of the world with thousands of institutions of all sizes serving every corner of the country."
Former Citgo exec files $100m lawsuit over Venezuela jailing
Tomeu Vadell, a former Citgo Petroleum executive who was jailed in Venezuela for nearly five years, is seeking $100m in damages against his former employer. A lawsuit filed in a Texas state court claims Citgo sent Mr. Vadell to Caracas when it knew "there was an extremely high risk" of harm. He was tortured in jail and he and his family were abandoned by the company, the lawsuit claims. "We greatly sympathize with Mr. Vadell for everything he and his family have been through," a Citgo spokesperson said, adding "We disagree with this lawsuit, which irresponsibly equates CITGO, an American company based in Houston, with an authoritarian regime in Venezuela."
OTHER
H&M expands into Albania with opening of first store
H&M has opened its first outlet in Albania. The Tirana store covers an area of over 2,000 square metres and features H&M's full range of products for men, women, and children. The opening of the store is part of H&M's ongoing expansion strategy, which aims to reach new markets and customers around the world. Albania is seen as a promising market for H&M, with a growing middle class and a population of over three million people.
 


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