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FirstFT: Hawkish EU states push for harsher sanctions against Russia

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Good morning. Hawkish EU members pushing for tougher measures against Russia, including evicting more banks from the Swift messaging network and banning diamond imports, as the bloc drafts a series of sanctions over the war in Ukraine.

The countries demanding the measures — which would also target luxury goods and Russia’s IT, cybersecurity and software industries — include Poland and the Baltic States. The move came in response to Vladimir Putin’s military escalation this week.

But officials said it would be difficult to find consensus among the 27 member states. Hungary has said it does not want new sanctions.

The European Commission’s goal is to push through a hard-fought G7 agreement to limit the price of Russian oil after months of US-led negotiations.

A possible new round of sanctions, which would be the eighth, is expected to be formally introduced after meetings between officials of the commission and representatives of member states started today.

  • At the UN: Russian Foreign Minister Sergei Lavrov defended the invasion of Moscow yesterday when he traded barbs with Western powers at the UN Security Council.

  • And on Russian streets: The Financial Times spoke to people who had been drafted into the Russian army, feared they might soon become conscripts or have close relatives. “My son would go to war against my cousin,” one of them said.

Do you support more harsh measures against Russia? Why? Share your opinion on firstft@ft.com and maybe I’ll mention them in a future issue of the newsletter. Thanks for reading FirstFT Europe/Africa — Jennifer

1. Kwasi Kwarteng’s plan to boost UK economic growth The chancellor will try to revive the UK economy today with a 30-point growth package to “turn the vicious circle of stagnation into a virtuous cycle of growth”. The mini-budget comes a day after the Bank of England raised interest rates by 0.5 percentage points, a more moderate move than the US Federal Reserve.

Bank rate line chart (%) showing BoE's decision to hike half a point rate

2. IEA boss: Energy crisis threatens to destroy EU unity Fatih Birol, the executive director of the International Energy Agency, said he dreaded “a wild west scenario” if European countries were to restrict their own trade or cut off cooperation with their neighbors for fear of fuel shortages this winter.

  • In derivatives markets: European authorities have ability to intervene in derivatives markets to help power companies after privately admitting that price volatility was not due to the “market malfunction”.

  • And on the toilet: A major German toilet paper manufacturer has gone bankrupt, while others are cutting production, raising prices or switching to alternative energy sources.

3. Boeing pays $200 million fine for 737 Max The aerospace manufacturer and its former CEO Dennis Muilenburg agreed to pay millions of dollars to settle the US Securities and Exchange Commission’s allegations of misleading investors about two fatal crashes of its 737 Max plane.

4. Concerns over UK’s plans to review ‘preserved’ EU law Prime Minister Liz Truss’ drive to “repeal or reform” all EU laws still in force in the UK after Brexit risks a potential bonfire of workers’ rights and environmental regulations, unions and the Scottish government have warned.

5. Twelve dead as Iran cracks down on protests Of the 12 dead, at least five were members of the security forces, officials said, after the death of 22-year-old Mahsa Amini in police custody sparked the largest anti-regime protests since 2019. questioned the need to enforce Islamic dress codes.

Have you been following the news this week? Take our quiz.

The next few days

Russian-occupied referendums in Ukraine In the Donetsk and Luhansk People’s Republics — ruled by Moscow-backed separatists since 2014 — as well as in Kherson and parts of Zaporizhzhya province, votes begin today and Tuesday in what NATO has labeled as “mock referendums” on whether or not to join Russia.

Economic data Composite Manufacturing and Services Purchasing Managers’ Indices were released in September for the Eurozone, France, Germany, the UK and the US. August surveys indicated: a sharp slowdown in economic growth. The UK consumer confidence survey GfK is also out, as are the second quarter gross domestic product figures for Spain. (FT, WSJ)

Workers’ Party Conference The British opposition party kicks off its four-day annual conference in Liverpool on Sunday, where expected topics include workers’ strikes, the cost of living crisis and the government’s mini-budget.

General elections Italy Voters will go to the polls on Sunday after one of the shortest campaigns in the country’s history, following the resignation of Prime Minister Mario Draghi. Italians are expected to give a decisive mandate to a right-wing coalition whose rivals have failed to forge a united opposition.

Join our Monday Tech & Politics Forum in partnership with ETNO to hear industry CEOs, policy makers and investors in Brussels map out future policies and regulations in the EU’s digital markets. Register here to join the conversation in person or online.

What else do we read

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A montage by Mark Zuckerberg, Elon Musk and Jeff Bezos

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How much money makes you happy? We all have fantasies about how much we would need to satisfy ourselves – but it doesn’t have to be a fortune. The real problem is that being a multi-billionaire would change your relationship with every other human being. Tim Harford considers how much someone really needs.

Why Trade Couldn’t Buy Peace? In recent decades, policy makers and business leaders had come to agree that peace was the natural state of the developed world and that globalization was immune to geopolitical risks. But as the war in Ukraine and tensions over Taiwan have shown, John Plender writes, they were wrong.

Economy can take us to net zero on its own For most of the past 200 years, one rule has been around the world: as a country’s economic activity expanded, so did its carbon emissions. But starting in the 1980s, with the advent of nuclear energy, countries could increasingly reduce emissions while increasing GDP, notes John Burn-Murdoch.

The five things the tech bubble has done right As tech entrepreneur Paul Graham wrote in the wake of the first dotcom crash, stock investors were right about the direction of travel, even if they were wrong about the speed of travel. John Thornhill revisits that idea as investors examine the wreckage of special-purpose acquisition companies.

Books

The six titles for FT’s 2022 Business Book of the Year Award address “some of the most difficult and important issues facing global capitalism,” said Roula Khalaf, FT editor and jury chair. See which titles made the shortlist.

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