Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Unconditionally compromised

Written by Javier Maquieira, senior associate 
Edited by Katie Stanton, associate partner
18 December 2020

Good morning,

If you’ve been wondering amid the media noise of Covid-19 and its associated impacts, whether protests against Europe’s longest-serving ruler, Alexander Lukashenko, were still ongoing in Belarus, the answer is yes.
 
And it’s all thanks to the country’s opposition, Co-ordination Council, which this week has been awarded with the European parliament’s top human rights prize for “their courage, resilience and determination” during recent unrest.
 
Belarus’ opposition leader Svetlana Tikhanovskaya, who was forced to leave the country after Lukashenko was declared the winner of the 9 August election, accepted the 2020 Sakharov Prize for Freedom of Thought at the European parliament building in Brussels on Wednesday.
 
In her acceptance speech, Tikhanovskaya said that despite statements of support and the imposition of sanctions on dozens of Belarusian officials, the European Union should “be braver” in supporting pro-democracy protesters and come up with “unconventional ways” to help push Lukashenko from power.
 
Belarusian protesters aren’t alone in their call for stronger action from EU leaders on human rights breaches in Europe. Earlier this week, Hungary’s parliament, where Viktor Orban’s socially conservative coalition enjoys a supermajority, passed new laws limiting the rights of homosexual couples to adopt children, changing electoral rules, and decreasing oversight of public funds.
 
These amendments to the Hungarian constitution came just after the European parliament passed its seven-year €1.8tn budget and coronavirus recovery package by an overwhelming majority. This “historic budget for a historic moment” was the result of the European Council reaching a compromise with Hungary and Poland to suspend the conditionality mechanism tying EU funding to adherence to the rule of law until the European Court of Justice judges the legality of the new tool.
 
In spite of the agreement, which some critics have branded as a cave-in to “extortion” from Budapest and Warsaw, European Commission vice president Věra Jourová told the Financial Times that she would be ready to use the conditionality mechanism in a “precise and transparent” way as a “very strong” deterrent to wrongdoing by member states.
 
Yet the headline remains one of a reached compromise and a passed budget, just in time for the EU’s announcement that coronavirus vaccinations are expected to start across the bloc on 27, 28 and 29 December. All that remains is for Brussels and London to agree a trade deal, then perhaps we can move on from this annus horribilis for good.

News

The US Food and Drug Administration (FDA) has said that the Moderna vaccine is a step closer to being authorised in the country, which would allow the pharmaceutical company to start shipping millions of doses. The FDA informed Moderna of the agency’s intention to work “rapidly” towards issuing emergency use authorisation after a panel of experts endorsed the vaccine, which was reported to be safe and 94% effective earlier this week.
 
The UK health secretary, Matt Hancock, announced in the House of Commons yesterday that almost all tier three areas in England would remain at their current level of restrictions from Saturday, with a wider area of east and southeast England moving up to the most severe measures. The decision will see some 38 million people – 68% of England’s population – living under tier three restrictions, which include the shutdown of pubs and restaurants except for takeaway, indoor entertainment, and tourist venues. 
 
A group of 344 Nigerian schoolboys kidnapped by Islamist militant group Boko Haram a week ago has been rescued and handed over to security agents, the Katsina state governor has confirmed. Nigeria’s president Muhammadu Buhari has welcomed the release of the students, whose return was described by his spokesperson as “a big relief to their families, the entire country and international community”.

Business and economy

Thirty-eight US attorneys-general are accusing Google of abusing its search monopoly, depriving consumers of the benefits of competitive choices, and undermining new entry or expansion. This is the tech giant’s third US government-related lawsuit in two months, following a landmark lawsuit by the Department of Justice over a similar issue in October. Google responded via a blog outlining that a redesign of its search engine would “deprive Americans of helpful information”.
 
The former chief executive of the Financial Conduct Authority (FCA), Andrew Bailey, has apologised after an independent report into the London Capital & Finance (LCF) collapse criticised the regulator’s work under his leadership. Bailey conceded reform to the way the FCA supervised firms “did not come in time for LC&F bondholders.” (£)
 
The prime minister, Boris Johnson, said it was “very likely” that a trade deal with the EU would not be reached after a stock-take call with European Commission president Ursula von der Leyen on Thursday night. A statement released by Downing Street claimed Johnson had insisted that the EU’s stance on access to British waters “needed to shift significantly”. Meanwhile, the EU’s chief negotiator, Michel Barnier, said earlier on Thursday that he believed an agreement could still be rapidly wrapped up.
  
The chancellor of the exchequer has extended the UK’s furlough and emergency schemes in light of the extension of pandemic restrictions and a potentially disruptive end to the Brexit transition at the end of the month. Rishi Sunak has also set 3 March 2021 for the next UK budget, which is projected to be one of the harshest in years with the introduction of extra spending cuts or tax increases to stabilise the public finances. (£)

Columns of note

John Gapper explains in the Financial Times how celebrities have turned to social media and podcasting to go direct to fans and become their own producers. He gives the example of the Duke and Duchess of Sussex, who this week unveiled production deals with Spotify and Netflix to make podcasts and shows, turning their “passion for meeting people and hearing their stories” into a franchise. In the case of the Sussexes, Gapper argues the couple have seized power over how they are portrayed, picking their role as celebrities over that of royals to become the narrators of their own story. (£)
 
In The Guardian, Andy Beckett opines that Labour leader Keir Starmer will need more than caution and centrist realism to change Britain. He argues that despite the opposition leader having more power over the party than his predecessor, a lack of vision will impede Starmer’s ability to face British and global problems that are “too large for the usual Labour caution in government”.

Cartoon source: The Telegraph

Markets

What happened yesterday?

London stocks finished in a mixed state on Thursday, with the FTSE 100 ending the session down 0.3% at 6,551.06, while the FTSE 250 was 0.99% higher at 20,296.04. Sterling was stronger against both the dollar by 0.64% at $1.36 and the euro by 0.2% at €1.11.
 
In the US, the S&P 500 closed the session up 0.6%, its third successive day of gains, while the tech-heavy Nasdaq Composite climbed 0.8%.
 
In company news:
 
WPP gained 4.19% as the advertising giant said it would increase its dividend each year starting in 2020 and pay out about 40% of headline earnings per share.
 
Watches of Switzerland rallied 6.32% as the watch retailer upgraded its full-year sales guidance after a stronger-than-expected first-half performance and solid start to the third quarter.
 
SSP Group was 2.76% lower after the travel food outlet operator said it expects an 80% fall in first quarter sales as the second wave of Covid-19 creates volatility in UK and European markets.
 
Avon Rubber tumbled 11.9% after the respiratory equipment manufacturer warned about a delay in approval processes related to several US contracts.

What’s happening today?

Interims
Redde Northgate

AGMs
Conygar Inv
Gfinity
Petroneft
Wey Education

UK economic announcements
(00:01) GFK Consumer Confidence
(07:00) Retail Sales
(07:00) Current Account

Int. economic announcements
(07:00) Producer Price Index (GER)
(07:00) Wholesale Price Index (GER)
(09:00) IFO Expectations (GER)
(09:00) Current Account (EU)
(09:00) IFO Business Climate (GER)
(09:00) IFO Current Assessment (GER)
(13:30) Current Account (US)

Source: Financial Times

did you know

The longest anyone is recorded to have stayed awake is 264 hours (11 days). Guinness no longer accepts attempts to beat this record due to the health risks. (@8fact)

Parliamentary highlights

House of Commons

No business scheduled.

House of Lords 

No business scheduled.

Scottish Parliament 

No business scheduled.

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