Category: 3. Business

France is already urging the EU to deploy its “anti-coercion instrument,” which can target foreign direct investment and finance as well as trade. That’s after Trump announced new U.S. tariffs on NATO countries that sent troops to Greenland amid his plans to take over the semi-autonomous Danish territory.

At face value, a 10% tariff rising to 25% would have minimal economic consequences, Capital Economics chief economist Neil Shearing said in a note Sunday, estimating they would reduce GDP in the targeted NATO economies by 0.1-0.3 percentage points and add 0.1-0.2 points to U.S. inflation.

“The political ramifications would be far greater than the economic ones,” he warned, with any attempt by the U.S. to seize Greenland by force or coercion potentially leading to irreparable harm to NATO. 

So far, European officials have signaled Greenland’s sovereignty is a red line that’s not up for compromise, while the Trump administration isn’t budging either on its stance.

But the U.S. has a key vulnerability the EU can exploit, according to George Saravelos, head of FX research at Deutsche Bank.

“Europe owns Greenland, it also owns a lot of Treasuries,” he wrote in a note on Sunday.

Holding those bonds helps balance America’s massive external deficits, and Europe is the world’s biggest lender to the U.S.

For example, offsetting the U.S. trade imbalance requires heavy inflows of capital from abroad. Meanwhile, the Treasury Department must also finance budget gaps by issuing more debt, often to foreign investors.

“European countries own $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined,” Saravelos pointed out. “In an environment where the geoeconomic stability of the western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part.”

As Trump threatened to upend global trade and finance last year, Danish pension funds led the charge in reducing their dollar exposure and repatriating money back home, he said.

Such moves represented the “sell America” trade that saw investors dump dollar-denominated assets amid doubts that they would continue serving as safe havens or still deliver attractive returns.

“With USD exposure still very elevated across Europe, developments over the last few days have potential to further encourage dollar rebalancing,” Saravelos added.

At the same time, the euro and Danish krone may see minimal impact from the fallout of Trump’s tariffs on NATO and any subsequent retaliation, he predicted.

That’s as European political cohesion stands to solidify in the face of Trump’s threats, with even right-wing officials previously sympathetic to him now rejecting his heavy-handed approach.

Saravelos sees additional leverage for Europe ahead of U.S. midterm elections with the Trump administration focused on affordability issues. On that front, the EU could influence inflation and Treasury yields, which affect borrowing costs.

“With the US net international investment position at record negative extremes, the mutual inter-dependence of European-US financial markets has never been higher,” he said. “It is a weaponization of capital rather than trade flows that would by far be the most disruptive to markets.”

A company selling fake diplomas for people to give massages to horses was one of six firms caught by the Welsh government for using their dragon logo without permission.

Those who received the fraudulent certificates from the “equine massage service” were instructed to destroy them, and government officials sent cease and desist letters to the firm’s owners.

The government in Cardiff found 10 cases of their logo being used without permission since 2020, which the BBC obtained using a Freedom of Information request.

A government spokesperson said it took the integrity of its brand “very seriously” and took “robust action against any improper use”.

The Welsh government refused to tell the BBC the names of the six companies that were sent cease and desist letters to stop the misuse, nor would they say whether police were contacted.

But the one teaching people to give therapy to horses was found to be issuing fraudulent diplomas which displayed the logo in 2022.

A cease and desist letter was issued by the Welsh government, the genuine awarding body for equine massage therapy took up the matter with the service, and all learners were instructed to destroy their certificates.

Elsewhere, three companies were found to be selling fake diplomas displaying the logo in 2020, and three fake accounts were set up on Instagram carrying the logo in 2022 – which Instagram removed once contacted.

The same year, an applicant for a job with a catering firm had submitted a fake certificate demonstrating pool supervision skills which displayed the logo – but he was ordered to destroy it by the awarding body after the government was alerted.

In 2023, a company offering energy efficiency services used the logo without permission in Facebook adverts, and in 2024 another company selling fake diplomas was sent a cease and desist letter and the website was taken down.

A government spokesperson said: “It is important that citizens can trust information provided by the government under its branding.

“We continuously monitor this and where necessary take robust action against any improper use by third parties.”

The Welsh government expects its logo, created in May 2011, to be used on publications and materials where it is a significant contributor to schemes.

Its guidance says: “Our achievements matter to us, and we are proud to add our logo to all projects we are involved in, for example whether it’s improving a community centre, building a new school, a hospital wing, improving roads or the surroundings of train stations.”

It also says “our logo is a dragon and bilingual title, separated by a horizontal line.

“These elements are in a fixed relationship to each other, which must not be altered in any way.

“Our logo colour is either black or white. No other colour is permitted.”

There were eight cases of the logo being used without permission over the previous five years, including a company offering embroidered images of the ministerial dragon for sale.

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A new Australian carbon offset company has been accused of potentially misleading customers by offering to generate thousands of credits for their solar panels and electric vehicles in a scheme that climate campaigners have labelled as junk.

Not-for-profit group Climate Integrity has written to the corporate watchdog asking for an investigation into Aetium, a company which is asking consumers and organisations to register their rooftop solar, EVs and forests in return for carbon credits.

One expert told Guardian Australia that Aetium’s online scheme had “jettisoned” a core principle in the world of carbon offsets – that projects can only generate credits if they would not have happened without the financial incentive.

More than 4,000 projects have been registered with Aetium since February last year, including more than 150 by the Cassowary Coast regional council in Queensland and more than 30 EVs owned by the Europcar rental car service, according to the scheme’s website.

The company defended its scheme and said it aimed to challenge the current system of how people and organisations could be rewarded for actions they had taken to cut emissions.

In its complaint to the Australian Competition and Consumer Commission, climate advocacy organisation Climate Integrity alleges Aetium is misleading consumers about the carbon offset scheme’s potential environmental benefits.

A key concern was the scheme allegedly failed the “additionality” standard – a safeguard in carbon offset schemes that tests whether emissions reductions would have occurred without the scheme.

This aims to ensure credits bought represent additional emissions reductions, rather than business-as-usual activities.

“Aetium’s credits fail to meet an additionality test because consumers signing up to the scheme would have bought and used their EVs or solar panels whether Aetium existed or not,” Climate Integrity’s executive director, Claire Snyder, said.

On its website, the company says that: “At Aetium, ‘additionality’ means the CO2 reduction would not have occurred if the solar system, EV or forestry did not exist”.

Snyder said Aetium’s definition was “out of step with virtually all established carbon credit schemes and the evidence-backed view of climate scientists”.

“Failing to satisfy the additionality test runs the risk that consumers become misled about their contributions to reducing emissions, and could ultimately undermine efforts to tackle the climate crisis,” she said.

‘Divergent’ from accepted practice

Aetium says it is not currently generating money from the scheme. According to its website, it would make money through registration fees it plans to begin charging from 1 March and by collecting a 7% share of the carbon credits it issues.

According to Aetium’s project registry, the Cassowary Coast regional council in far north Queensland has registered 131 forest projects and 23 solar PV installations, representing about 4,500 tonnes of CO2 credits, with the company.

It also shows more than 30 electric vehicles owned by the international rental car company Europcar are registered with Aetium.

Aetium’s managing director, Christopher Ride, said that, to date, “no carbon reductions have been certified by Aetium, no fees have been taken, no credits have been sold or retired, and no payments have been made” due to a minimum 12-month certification period for projects that the company has set.

He said the company had not been made aware of any formal complaint to the ACCC. The ACCC confirmed to Guardian Australia it had received a complaint.

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The international Integrity Council for the Voluntary Carbon Market’s set of principles says emissions reductions “shall be additional, i.e., they would not have occurred in the absence of the incentive created by carbon credit revenues”.

Prof Andrew Macintosh, an environmental law professor at the Australian National University and the former head of the federal government’s emissions reduction assurance committee, said: “Of all the registries I have reviewed globally, Aetium stands out as one of the most divergent from accepted practice.”

He said the cornerstone of this was the concept of additionality.

“Aetium have jettisoned this principle and instead try to redefine additionality, with the consequence that they will issue credits for standard activities where the emissions reductions have nothing to do with the incentive provided by the scheme,” he said.

“From the information available, there also don’t appear to be third-party verification processes and the scheme seems to fall incredibly short of standard practice regarding transparency.

“I feel badly for anybody who buys credits from Aetium in the belief they are helping ‘fight climate change’.”

In response to questions from Guardian Australia, Ride said: “We believe the current system should be challenged, and genuine change is needed.

“We need divergence from the accepted practices.”

He said the company wanted to reward broad participation in driving down emissions. Ride said that it remained “unknown” whether Aetium would could ultimately generate sales from the credits it issued but “our hope is this will encourage more awareness and more investment”.

Aetium also promotes its membership of the Smart Energy Council, Electric Vehicle Council and Carbon Market Institute and its status as a signatory to the Australian Carbon Industry Code of Conduct.

A Smart Energy Council spokesperson said membership was open to any organisation in the renewable energy sector, and an Electric Vehicle Council spokesperson said it was not a regulator and it was common for members to use its branding.

A Cassowary Coast council spokesperson said the council had registered its solar installations and bushland reserves with Aetium as a trial and any credits would be used to reinvest in “like-minded projects”.

Dr Sasha Courville, chief executive of the Carbon Market Institute, said membership of the institute “does not include independent checks of business activities” but Aetium was bound by the Australian Carbon Industry code of conduct.

But she said the code “does not regulate or assess the technical quality of carbon credits”.

She said the institute supported maturing standards in the voluntary carbon market and pointed to the “important work” of the Integrity Council for the Voluntary Carbon Market that “has developed a global benchmark for high-integrity carbon credits”.

The Guardian requested comment from Europcar.

Global stock markets are bracing for falls when trading resumes on Monday after Donald Trump threatened eight European countries with fresh tariffs until they support his ambition to acquire Greenland.

The US president’s plan to impose new trade levies of 10% on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland from 1 February, rising to 25% on 1 June, is creating fear in the markets, and among European businesses.

Trading on the brokerage IG’s weekend markets suggest there will be losses on the London stock exchange, and on Wall Street, when they reopen on Monday, while rising geopolitical fears could drive precious metal prices towards new record highs.

“This latest flashpoint has heightened concerns over a potential unravelling of Nato alliances and the disruption of last year’s trade agreements with several European nations, driving risk-off sentiment in stocks and boosting safe-haven demand for gold and silver,” said Tony Sycamore, market analyst at IG.

Britain’s FTSE 100 index was on track to fall by 0.9% on Monday, IG’s weekend market suggested, while its Weekend Wall Street market indicated a 0.5% fall on the Dow Jones industrial average, which tracks 30 large US companies.

Gold was trading 0.6% higher at $4,625 an ounce on IG’s weekend bullion market, nudging the record high of $4,642 an ounce hit last week, while spot silver was trading 0.5% higher at $90.41/oz.

European leaders, including UK prime minister Sir Keir Starmer and European Commission president Ursula von der Leyen, criticised Trump’s move on Saturday, which threatens to undermine the Nato defence alliance.

Trump’s new policy has “whipped up fresh economic chaos” and is a setback for the UK economy, warned Susannah Streeter, chief investment strategist at Wealth Club.

“This is a migraine-inducing development for politicians who have already had to go through tortuous negotiations to reach the first tranche of tariff deals, winning exemptions for certain sectors. For companies selling into the United States, and their customers, this move creates another layer of difficult decision making.

“Already they have had to try to absorb the current tariffs – there will be little room to soak up any more – so this new tranche of duties is likely to end up being passed on to American customers,” Streeter warned.

There were signs on Sunday that European business groups were pushing the EU to flex its muscles in response. Germany’s engineering association, the VDMA, called on the Commission to consider using its “anti-coercion instrument” against the US.

“If the EU gives in here, it will only encourage the US president to make the next ludicrous demand and threaten further tariffs,” the VDMA president, Bertram Kawlath, said in a statement on Sunday.

Hildegard Müller, the president of the German auto industry association warned that the costs of these additional tariffs would be “enormous” for German and European industry.

William Bain, head of trade policy at the British Chambers of Commerce, predicted that new tariffs on goods exported to the US will be “more bad news for UK exporters”, and he urged the UK government to push for last year’s trade deal with the US – which was frozen last month – to be implemented.

“We know trade is one way to boost the economy, and the success of transatlantic trade depends on reducing, not raising, tariffs. The government must prioritise the implementation of the [UK-US] economic prosperity deal and negotiate calmly to remove the threat of these new tariffs,” Bain said.

Some people think of the stock market as a place to buy shares low and sell high, banking a profit from the share price difference. This is one way that the market works. Yet another way is to use dividend shares and banking income to generate a generous second income. Here’s how.

To generate a monthly passive income, an investor would need to hold a diversified portfolio of stocks. It’s incredibly rare to own a single company and expect to receive dividends every month. Further, it’s a high-risk play to own a single company and hope the dividend keeps getting paid and don’t get cut. If this happens in the future, the overall strategy falls apart. Rather, if someone owns a dozen or more stocks, the impact can be minimised.

A lot of focus will be on making the capital work hard. As such, I don’t see much value in buying stocks with a divdend yield at or below the index average. For example, the FTSE 100 average yield is currently 2.92%. So the strategy would be to target FTSE shares with a yield well in excess of this. Based on what other stocks offer, I think a sustainable portfolio can be built with shares yielding around 7%.

In theory, let’s assume someone invested £600 a month in a portfolio yielding 7% and reinvested the proceeds. By year 15, this could be paying out an average of £1,055 a month. Of course, it’s impossible to say for certain that the goal will be reached at this point. Planning this far into the future isn’t an exact science, and many factors could mean it takes longer (or shorter) to achieve.

One idea to include in this portfolio could be ZIGUP (LSE:ZIG). It’s a FTSE 250-listed mobility services group, with the share price up 28% over the past year. It currently has a dividend yield bang on 7%.

The business primarily makes money from charging clients to use commercial vehicles. Rental revenue has been a major driver of growth, especially with higher demand in Spain and the UK. Half-year results from December showed revenue up 16.3% for Spain. In comparison, UK and Ireland revenue was up 6.5%.

At the same time, it generates recurring income from maintenance, repair, and fleet-management contracts. This is the part of the business that provides steady revenue and helps to ensure the dividend is covered from earnings. In fact, the latest dividend cover ratio is 2.9, which means the earnings can cover the latest dividend almost three times over.

In terms of risks, business demand tends to follow the broader economic cycle. If we saw a downturn in the UK and Europe, people might decide to cut back on vehicle hire. Or the company might have to cut profit margins to sustain demand.

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Fowl and Fury

Fowl and Fury

Rajendra Vikram Kupperi