Connect with us

Business

U.S. Treasury’s Yellen sets ambitious Europe agenda: taxes, pandemics, climate

Published

on

October 28, 2021

By David Lawder and Andrea Shalal

WASHINGTON/ROME (Reuters) – U.S. Treasury Secretary Janet Yellen will use her third trip to Europe to push a slew of White House global economic priorities on corporate taxes, climate financing, preventing new pandemics and easing inflationary supply chain disruptions.

Over the next week, she will make the pitches at Group of 20 meetings in Rome and at the United Nations Climate Change Conference 26 (COP26) in Glasgow, with an interim stop in Ireland to thank the low-tax country for its hard-fought decision to support a deal for a 15% global minimum corporate tax.

Advertisement

U.S. President Joe Biden and other G20 leaders at a weekend summit are expected to endorse the tax deal agreed by 136 countries, cementing progress made this year under Yellen’s leadership.

NEXT PANDEMIC

Yellen arrived in Rome late on Wednesday — a day earlier than Biden — to hold bilateral meetings and attend a G20 joint finance and health ministers meeting on Friday, the day before the leaders summit this weekend.

She will urge the finance and health group to better prepare for the next pandemic through a new disease detection and coordination forum and a separate financing mechanism. She outlined the proposals in a letter to G20 colleagues along with Sri Mulyani Indrawati, the finance minister for Indonesia, which chairs the G20 in 2022.

One diplomatic source said other G20 countries had not fully embraced the financing mechanism amid a crush of other funding requests for climate, COVID-19 vaccinations and debt relief.

Advertisement

Treasury officials said Yellen will also push for faster progress in debt restructurings for highly indebted countries under a G20 framework.

The G20 is not expected to support a proposed extended freeze of poor countries’ bilateral debt payments after the end of this year, the official added.

TAX DEAL BENEFITS

On Sunday and Monday, Yellen will meet with government and business leaders in Dublin to discuss the tax deal, which will affect many U.S. technology companies that were drawn to invest there by Ireland’s low 12.5% tax rate.

Treasury officials say they are confident about the Biden administration’s ability to implement the global tax deal using a Democrats-only budget measure even as a deeply divided Congress struggles to agree on Biden’s massive spending bill.

Advertisement

U.S. Senate Democrats have proposed a new, across-the-board 15% corporate minimum tax to work alongside a proposed tax on the unrealized gains from billionaires’ assets.

At COP26 in Glasgow on Nov. 2-3, Yellen will emphasize using multilateral development banks to mobilize more private sector investments in carbon abatement and using tax and economic policy incentives to accelerate the transition a lower carbon economy, Treasury officials said.

She will also tout work done by the U.S. Financial Stability Board to incorporate climate risks as an “emerging threat” to financial stability in the regulatory agency’s every day work.

But here too, Yellen will have to contend with a less ambitious U.S. climate spending agenda as incentives to replace coal power plants with wind, solar and nuclear power were dropped from the package.

(Reporting by David Lawder and Andrea Shalal; Additional reporting by Trevor Hunnicutt; Editing by Heather Timmons and Aurora Ellis)

Advertisement

Continue Reading
Advertisement

Business

Bukele steps up El Salvador’s bet on sliding bitcoin; buys another 150 coins

Published

on

December 5, 2021

SAN SALVADOR (Reuters) – El Salvador President Nayib Bukele said the Central American country had acquired an additional 150 bitcoins after the digital currency’s value slumped again, enlarging his bet on the cryptocurrency despite criticism.

Bitcoin, the world’s biggest and best-known cryptocurrency, is down about 30% from the year’s high of $69,000 on Nov. 10. Bukele said last week that El Salvador had acquired 100 additional coins to take advantage of the currency weakening.

Late on Friday, Bukele announced the government had stepped into the market again.

Advertisement

“El Salvador just bought the dip! 150 coins at an average USD price of ~$48,670,” Bukele wrote on Twitter.

Until Nov. 26, El Salvador had 1,220 bitcoins.

In September El Salvador became the world’s first nation to adopt bitcoin as legal tender, a move that generated global media attention but also attracted criticism from the opposition and foreign financial institutions.

The International Monetary Fund (IMF) said on Monday that El Salvador should not use bitcoin as legal tender, considering risks related to the cryptocurrency.

(Reporting by Nelson Renteria; Writing by Drazen Jorgic; Editing by Daniel Wallis)

Advertisement

Continue Reading

Business

Bitcoin falls 9.2% to $48,782

Published

on

December 4, 2021

(Reuters) – Bitcoin dropped 9.29% to $48,752.15 at 22:01 GMT on Saturday, losing $4,991.54 from its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is down 29.3% from the year’s high of $69,000 on November 10.

Ether, the coin linked to the ethereum blockchain network, dropped 3.61% to $4,070.52 on Saturday, losing $152.28 from its previous close.

Advertisement

(Reporting by Juby Babu in Bengaluru; Editing by Daniel Wallis)

Continue Reading

Business

Trump’s social media venture says it has raised $1 billion

Published

on

December 4, 2021

By Krystal Hu and Juby Babu

(Reuters) – Donald Trump’s new social media venture said on Saturday it had entered into agreements to raise about $1 billion from a group of unidentified investors as it prepares to float in the U.S. stock market.

The capital raise, details of which were first reported by Reuters on Wednesday, underscored the former U.S. president’s ability to attract strong financial backing thanks to his personal and political brand. He is working to launch a social media app called TRUTH Social that is at least several weeks away.

Advertisement

Digital World Acquisition Corp, the blank-check acquisition firm that will take Trump Media & Technology Group Corp public by listing it in New York, said it will provide up to $293 million to the partnership with Trump’s media venture, taking the total proceeds to about $1.25 billion.

The $1 billion will be raised through a private investment in public equity (PIPE) transaction from “a diverse group of institutional investors,” Trump Media and Digital World said in a statement. They did not respond to requests to name the investors.

Trump Media inked its deal with Digital World to go public in October at a valuation of $875 million, including debt. The social media venture is now valued at almost $4 billion based on the price of Digital World shares at the end of trading on Friday. Trump supporters and day traders snapped up the stock.

Many Wall Street firms such as mutual funds and private equity firms snubbed the opportunity to invest in the PIPE. Among those investors who participated were hedge funds, family offices and high net-worth individuals, Reuters reported on Wednesday. Family offices manage the wealth of the very rich and their kin.

Some Wall Street investors are reluctant to associate with Trump. He was banned from top social media platforms after the Jan. 6 attack by his supporters on the U.S. Capitol amid concerns he would inspire further violence. The Capitol attack was based on unsubstantiated claims of widespread fraud in last year’s presidential election.

Advertisement

“As our balance sheet expands, Trump Media & Technology Group will be in a stronger position to fight back against the tyranny of Big Tech,” Trump said in a statement on Saturday.

The deal also faces regulatory risk. U.S. Senator Elizabeth Warren asked Securities and Exchange Commission Chairman Gary Gensler last month to investigsate the planned merger for potential violations of securities laws around disclosure. The SEC has declined to comment on whether it plans any action.

Trump Media and Digital World said the per-share conversion price of the convertible preferred stock PIPE transaction represents a 20% discount to Digital World’s volume-weighted average closing price for the five trading days to Dec. 1, when Reuters broke news of the capital raise.

If that price averages below $56 in the 10 days after the merger with Digital World has been completed, the discount will grow to 40% with a floor of $10, the companies added. Digital World shares ended trading on Friday $44.97.

Trump had 89 million followers on Twitter, 33 million on Facebook and 24.5 million on Instagram at the time he was blocked, according to a presentation on his company’s website.

Advertisement

Investors attending the confidential investor road shows were shown a demo from the planned social media app, which looked like a Twitter feed, Reuters reported.

FIRST-QUARTER ROLLOUT

Since Trump was voted out of office last year, he has repeatedly dropped hints that he might seek the presidency in 2024.

Special purpose acquisition companies such as Digital World had lost much of their luster with retail investors before the Trump media deal came along. Many of these investors were left with big losses after the companies that merged with SPACs failed to deliver on their ambitious financial projections.

TRUTH Social is scheduled for a full rollout in the first quarter of 2022. It is the first of three stages in the Trump Media plan, followed by a subscription video-on-demand service called TMTG+ that will feature entertainment, news and podcasts, according to the news release.

Advertisement

In a slide deck on its website, the company envisions eventually competing against Amazon.com’s AWS cloud service and Google Cloud.

(Reporting by Juby Babu in Bengaluru and Krystal Hu in New York; Editing by Daniel Wallis and Cynthia Osterman)

Continue Reading
Advertisement

Trending