Archives for November 2021

Why global supply crisis is here to stay

The insolvency proceedings will be initiated in the regional court in Salzburg on Tuesday. The company’s management expressed hopes it could manage to get through such a difficult period.

Salzburg Schokolade suffered significant losses as a result of the coronavirus pandemic. A sharp decline in the number of tourists – as well as in the celebration of birthdays and weddings – has led to a drop in the company’s revenue.

The stores in Vienna and Salzburg remained closed for weeks during the pandemic. The candy maker did not pay its employees’ November salaries or their Christmas bonuses.

Salzburg Schokolade’s history extends back to the 19th century. The company was founded in Salzburg in 1897 under the name Rajsigl. In 1956, it moved its production to Grödig.

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Article source: https://www.rt.com/business/541747-chocolate-maker-goes-bust/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The so-called “pingdemic,” derived from the words “pandemic” and “ping,” refers to being notified, or pinged, by an app which tracks and registers close contact with the infected, and recommends self-isolation for a certain amount of time.

The first one – imposed during the previous coronavirus wave – had an enormous negative impact on a wide range of economic sectors, heavily hitting the supply chains and creating severe labor shortages across the country. The measures were dropped in August for fully vaccinated citizens.

Shelves stripped bare across UK as Brits rush to panic-buy ahead of Christmas

Over the weekend, British authorities introduced the targeted measures to tackle the new coronavirus variant. They take effect at 4:00 am on November 30, and include compulsory mask-wearing in shops and on public transport, PCR tests and self-isolation until getting a negative result if arriving from abroad, as well as 10 days of self-isolation for those who were in contact with suspected Omicron cases.

The renewed rules oblige the fully-vaccinated to stay home if they are identified as a close contact of someone who tests positive for Omicron.

According to the Institute of Economic Affairs, the measures are expected to lead to another ruinous pingdemic-prompted shortage of goods and labor in the run-up to Christmas, as businesses become crippled by the growing number of staff being forced to self-isolate.

“The impact of a repeat could now be greater, because the rules are being tightened in school term time and when labor shortages are a bigger problem. The new self-isolation rules could knock as much as 1% off GDP in December, costing the economy at least £2 billion,” Julian Jessop of the IEA told the Daily Mail.

According to Stephen Phipson, the head of the manufacturers’ group Make UK, the risk that the self-isolation rules will worsen the already tough staffing issues is huge.

“We don’t want to go back to the pingdemic,” he told the Financial Times.

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Article source: https://www.rt.com/business/541742-uk-pingdemic-costs-covid/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The highest price was recorded on November 29, at €422 per MWh (including taxes). That’s about five times higher than a year ago.

Finland is energy-dependent, with about 10% of its electricity supplied by Russia. Experts attribute the increased price to high energy costs in Central Europe, where a large amount of electricity is generated from natural gas, the price of which has increased significantly. They say electricity in Finland is likely to remain expensive until next summer, when the Olkiluoto 3 nuclear power plant is expected to become operational.

Winter is coming: European natural gas prices continue to rise as EU grapples with energy crisis

Natural gas costs have been rising for European consumers with the winter season approaching. On Tuesday, the price of January futures on the TTF exchange in the Netherlands exceeded $1,170 per thousand cubic meters, or €100 per MWh in household terms.

“According to our forecast, the price of electricity will remain high in winter but will start to decline in spring. It is likely that it will not be as high as it is today, but the overall level remains elevated,” a spokesman for Finnish electricity company Fingrid, Mikko Heikkila, told journalists.

READ MORE: Wind power becoming too cheap to support itself

He added that “Finland is very dependent on imports. In winter we need energy from neighboring countries but if the electricity market and domestic electricity production work normally, then next winter there will be enough electricity.”

According to Fingrid, the share of electricity imports from Russia amounted to 10% of consumption in Finland in the first nine months of 2021.

The average price of Russian electricity was €57.98 per MWh. Russian energy company Inter RAO said last week that most of its electricity export volume goes to Finland (37%), the Baltic countries (23%), and China (18%).

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Article source: https://www.rt.com/business/541723-finland-electricity-price-spike/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The country’s third biggest bank will pay $81 million (AU$113 million) in penalties, and hand over $57 million in compensation to its customers in addition to the fine.

UK’s state-backed NatWest bank to face ‘very large fine’ after failing to prevent alleged money laundering of nearly £400 million

According to the Australian Securities and Investments Commission (ASIC), Westpac charged around $7.2 million in fees within a 10-year period to nearly 11,000 of its “deceased customers for financial advice services that were not provided due to their death,” and distributed duplicate insurance policies to more than 7,000 clients.

The banking giant was also charged for failing to ensure that financial services were provided efficiently, honestly, and fairly in all of the cases except for that of super insurance and debt on-sale. The regulator estimated that at least 25,000 customers were charged more than $5 million in fees that had not been disclosed adequately.

The Australian regulator simultaneously launched six lawsuits against the bank over “systemic failures” across Westpac’s banking, super and wealth management division, as well as the insurance business, which was sold off in August.

“The conduct and breaches alleged in these proceedings caused widespread consumer harm and ranged across Westpac’s everyday banking, financial advice, superannuation and insurance businesses,” ASIC Deputy Chair Sarah Court said.

According to ASIC, it is unprecedented for the regulator “to file multiple proceedings against the same respondent at the same time.”

Westpac CEO Peter King has vowed to tackle widespread compliance problems by pushing ahead with a cultural overhaul at the institution.

“In each of these matters, Westpac has fallen short of our standards and the standards our customers expect of us,” King said in a statement.

“The issues raised in these matters should not have occurred, and our processes, systems and monitoring should have been better. We are putting things right and unreservedly apologise to our customers.”

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Article source: https://www.rt.com/business/541713-australia-westpac-charging-dead-fine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The mega-project, completed in September after numerous roadblocks, is still far from supplying European customers, due to approval hurdles in the EU.

What is Nord Stream 2?

The 1,230-kilometer-long route is a new export gas pipeline running from Russia across the Baltic Sea to Germany. It runs parallel to the existing Nord Stream pipeline which became operational in 2012. Pipelaying operations for Nord Stream 2 commenced in September 2018. The total capacity of the pipeline’s two strings is 55 billion cubic meters of gas per year, which will ensure a highly reliable and cheap supply of Russian gas to Europe.

Who owns the pipeline?

Besides Russian energy major Gazprom, which has a majority stake in the project, the international consortium involved in the pipeline includes European firms such as Germany’s Wintershall and Uniper groups, the Dutch-British giant Shell, France’s Engie and Austria’s OMV. Gazprom is a 51% shareholder in the Swiss-based company Nord Stream AG, which manages the pipeline’s construction.

Germany comments on Nord Stream 2 delays

Who is against Nord Stream 2?

The construction of Nord Stream 2 has been strongly criticized by the US and some Eastern European countries, particularly Poland and Ukraine, who claim the project will increase Europe’s reliance on Russia for its energy needs. Opponents also voiced concerns that the new pipeline bypasses Ukraine, thus enabling Russia to cut down on gas transit through the country via its Soviet-era pipeline network.

READ MORE: Germany’s future Vice-Chancellor slams Nord Stream 2 as ‘project to pressure Ukraine’

The US administration has been one of the most vocal critics, attempting to derail the project and at the same time, boost sales of American liquefied natural gas (LNG) to the continent.  The project has been criticized by US think tanks and has been dubbed by the Atlantic Council as “Vladimir Putin’s pipeline weapon.”

Who is in favor of the project?

Besides Russia, Europe’s biggest economy – Germany – remains firm as Nord Stream 2’s strongest backer, insisting that the pipeline will ensure the continent’s energy security. Berlin has rejected all concerns, saying that Nord Stream 2 is a commercial project. Outgoing Chancellor Angela Merkel has repeatedly reminded her European neighbors that Germany and Europe bought gas from Russia even at the height of the Cold War. Most Central and Western European countries are in favor of the project as well.

What steps did US take to stop Nord Stream 2?

In a bid to halt the construction of Nord Stream 2, Washington has levied a number of sanctions against its construction, and threatened foreign firms working on the project. As a result, a number of insurers and high-tech Western vessels laying pipes pulled out of the project, delaying the completion of the pipeline.

Story of 5 major pipelines explains Europe’s love-hate relationship with Russian energy

Have the delay tactics worked?

Work on the $10-billion pipeline had been suspended for nearly a year because of the US sanctions, which threatened asset freezes and visa restrictions for companies involved in the construction. In late 2019, after months of delays, Denmark gave the green light for the pipeline to pass through its waters. Copenhagen’s delay in granting permission was another hurdle to completing the project on time.

What were the consequences of the delay in Nord Stream 2’s construction?

The delays allowed time for EU to include the Nord Stream 2 project in its gas directive, which forbids the same company from delivering and selling gas within the Union. Inclusion in the law forces the project operator to sell parts of its business after making massive investments. The project would have been given an exemption had it been completed on time.

The consequences for Europe include less reliable deliveries of cheaper pipeline gas from Russia as traditional supplies from Norway are drying up. It also means greater reliance on imports of more expensive liquefied natural gas from the US and the Middle East. Gas prices across the continent have spiked to record highs in recent months due to a shortage of reserves in European underground storage facilities. The result is higher energy costs for the European consumer.

Why is the pipeline still not pumping gas?

The Nord Stream 2 is complete and filled with gas but not operational, as German officials have blocked its certification process. Germany’s network regulator suspended its ongoing process to certify the pipeline after ruling that the operator must only be registered as a German entity, while Nord Stream 2 AG is based in Switzerland.

The regulator said this month the certification will be paused until the company behind it reorganizes in accordance with German law. The regulator will be able to resume its examination “in the remainder of the four-month period set out in law,” it said. Therefore, the previous January 8, 2022 deadline for the certification of Nord Stream 2 has been delayed once again.

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Article source: https://www.rt.com/business/541614-nord-stream2-gas-pipeline-delay/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Musk acknowledged supply chain issues in a Twitter post on Monday after being asked for an update on the Cybertruck, which was unveiled in November 2019 just before the Covid-19 pandemic.

“Oh man, this year has been such a supply chain nightmare it’s not over!” Musk declared, promising to “provide an updated product roadmap” on the company’s next earnings call.

READ MORE: ‘Like the toilet paper shortage’: Elon Musk compares microchip panic-buying to early pandemic rush to stock up on essentials

The Tesla CEO also teased Cybertruck on Monday, calling it an intentionally “insane technology bandwagon” and claiming that the vehicle would “reach far into a post-apocalyptic future bring that technology to now.”

Musk previously warned of Tesla’s supply chain issues in June, comparing technology shortages to cases of toilet paper hoarding and panic buying during the pandemic.

“Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it,” he said at the time, explaining that the “fear of running out” had caused “every company to overorder – like the toilet paper shortage, but at epic scale.”

In June, however, Musk predicted that it would not be a “long-term issue.”

Since the beginning of the pandemic, a global computer chip shortage has left many industries short on supplies, with car, computer, and video game console companies taking some of the heaviest hits. Though much of the problem stemmed from factories closing down due to outbreaks and restrictions, supply shortages were worsened by a heavy rise in demand over lockdown and company hoarding, resulting in lengthy delays for in-demand products.

Currently set to enter production in 2022 after a delay halted its 2021 rollout, the Tesla Cybertruck has experienced a rocky start. Tesla stocks famously dropped in 2019 after the Cybertruck’s windows were smashed during a demonstration of its supposedly armored glass.

Article source: https://www.rt.com/business/541699-musk-pins-production-issues-shortage/?utm_source=rss&utm_medium=rss&utm_campaign=RSS