Category: Business News

  • Fiat offices raided over diesel emissions fraud claims

    Fiat Chrysler flag

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    Authorities in Germany, Italy and Switzerland have raided the offices of car giant Fiat-Chrysler and truck maker CNH Industrial over claims some engines produced illegal levels of emissions.

    The action concerns alleged use of so-called “defeat devices” to mask vehicles’ diesel pollution output.

    Engines used by Fiat, Alfa Romeo and Jeep, as well as CNH’s Iveco trucks are the focus of the probe.

    UK authorities have also asked two firms in London to provide documents.

    Fiat-Chrysler Automobile (FCA) and CNH Industrial (CNH) are both controlled by Exor, the holding company of Italy’s Agnelli family.

    • Lawsuit alleges defeat devices in Nissan petrol cars
    • Volkswagen loses landmark German ‘dieselgate’ case

    A statement from Eurojust, a European Union agency for criminal cooperation across member states, said the probe is looking into a “number of people” who may have been involved in allegedly allowing use of the devices. It did not name them.

    The raids, initiated by German prosecutors investigating emissions fraud, involve claims that defeat devices were used in engine management software in 200,000 vehicles.

    Use of software to flatter emissions levels hit the headlines over the Volkswagen “diselegate” affair. Defeat devices allow engines to meet pollution levels under laboratory tests, but shut down the emissions control system in real-world driving conditions.

    UK documents

    Eurojust did not name the companies raided. However, FCA and CNH issued similar statements, acknowledging that investigators had turned up at several offices in Europe, and that they are cooperating fully with authorities.

    Eurojust also said that “UK authorities have ordered two companies in London to produce relevant documents”. Again, these companies were not named.

    The statement said: “Defeat devices are illegal according to the European Union regulations in place. Vehicles with defeat devices are not approved for road usage in the EU and consumers with such devices installed in their cars face possible driving bans.”

    Wednesday’s raids were at three offices in Germany, in Baden-Württemberg and Hesse, three locations in the Piedmont region of Italy, and one location in the Swiss canton of Thurgau.

  • Coronavirus: Restaurants struggle with overwhelming ‘no-shows’

    New social distancing regulations to make restaurants Covid-secure mean there are fewer tables for customers, which in turn means less income.

    However restaurateurs say many people who make reservations are simply not showing up, which is having a major impact on the company’s bottom line, and ultimately their survival in the industry.

    Journalist: Simon Browning

  • B&Q owner sees sales soar in lockdown DIY boom

    Woman painting a wall

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    Sales of paint, wallpaper, plants and compost have soared during lockdown, the owner of B&Q and Screwfix has said.

    Kingfisher said people had been doing more DIY than usual, as like-for-like sales jumped by 21.6% in the three months to 18 July.

    Store re-openings also boosted revenue, while online sales more than tripled.

    Kingfisher’s UK stores, as well as those in France, were closed in mid-March due to lockdown measures to stop the spread of coronavirus.

    Although B&Q’s UK stores only started reopening in late April, online sales continued to see a huge increase, it said.

    The retailer made click-and-collect and home delivery options available and the group saw online sales surge more than 200% in both May and June.

    • DPD and B&Q owner to hire 7,500 as demand surges
    • DIY spending splurge helps May sales recover

    According to the Office for National Statistics, retail sales across the UK partly recovered in May driven by DIY stores and garden centres reopening.

    Sales were boosted by a 42% rise at household goods stores, such as hardware, furniture and paint shops, it said.

    Kingfisher said that good weather had also helped demand – in addition to people having more time to spend on DIY improvements while they spent more time at home.

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    In June, the group said it would recruit 3,000 to 4,000 more workers to meet the rising demand, about half of them in the UK.

    Kingfisher boss Thierry Garnier said the firm’s new recruits would be “temporary” during the summer, depending on what happened to demand after coronavirus measures were eased.

    The DIY group is one of the few large retailers to add to its workforce instead of cutting jobs amid the pandemic.

    DIY is one area that has done well during lockdown. Other businesses that have seen buoyant sales include supermarkets and online-only fashion stores.

    Sainsbury’s, for example, saw grocery sales up 10.5% during the lockdown, fuelled by online orders. Online fashion firm Asos also reported an increase in group sales of 10% to £1bn in the four months to 30 June.

    Despite Kingfisher’s strong performance, the group said in a statement on Wednesday that it would not give guidance for the second half of the year due to “uncertainty around Covid-19 and the wider economic outlook”.

    It also said its sales over the six months to 18 July were down 3.7% compared with the same period last year.

  • Coronavirus: Airlines call for joint US-European testing scheme

    Passengers wearing face masks or covering due to the Covid-19 pandemic, have their temperature taken as they queue at a British Airways check-in desk at Heathrow airport.

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    Major airlines have asked for a joint coronavirus testing programme, so that travel may resume between the US and Europe.

    The owner of British Airways and United Airlines are among the carriers that have signed a letter to US and European Union leaders.

    Currently travel between Europe and the US is largely barred.

    Carriers are struggling to survive as the coronavirus pandemic has severely disrupted global travel.

    In a letter sent on Tuesday to US and European governments, major airline chief executives called for a US-EU testing programme for passengers making trans-Atlantic trips.

    Signees of the letter include bosses of International Airlines Group (IAG) – which owns British Airways – American Airlines, United Airlines and Lufthansa.

    “Given the unquestioned importance of trans-Atlantic air travel to the global economy as well as to the economic recovery of our businesses, we believe it is critical to find a way to re-open air services between the US and Europe,” the letter said.

    It was sent to US Vice President Mike Pence and Ylva Johansson, the European commissioner for home affairs.

    “We recognize that testing presents a number of challenges, however we believe that a pilot testing programme for the transatlantic market could be an excellent opportunity for government and industry to work together,” the letter added.

    The EU doesn’t currently allow visits from US residents, although it has relaxed rules for non-essential travel from 15 countries with lower coronavirus infection rates.

    The UK requires people arriving from the US to spend 14 days in self-imposed quarantine, while the US restricts travel by most passengers coming for Europe.

    Pilar Wolfsteller, Americas Air Transport Editor at FlightGlobal told the BBC that such measures are a crucial step towards restarting flights between America and Europe: “Until the US and EU open their borders to foreign visitors again, it will be very difficult to impossible for airlines to climb out of the crisis.”

    “For the major US carriers like United, American and Delta, European visitors are vital to their success and any progress towards re-opening transatlantic travel would be a great step forward towards normalcy for the airlines,” she added.

    China wants testing

    ​China has also come out in favour of testing kits and wants passengers of inbound flights to provide negative Covid-19 test results before boarding.

    The Civil Aviation Administration of China (CAAC) made the announcement on Tuesday as the government looks to further reduce the risk of imported coronavirus cases.

    The airline industry is facing a huge challenge amid a severe downturn in passengers. Most major airlines have announced job cuts and staff furloughs, while some smaller players have collapsed.

  • QAnon: Twitter bans accounts linked to conspiracy theory

    A Donald Trump supporter holding a QAnon flag visits Mount Rushmore National Monument on 01 July 2020

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    Followers of QAnon believe “deep-state” traitors are plotting against US President Donald Trump

    Twitter has announced sweeping measures aimed at cracking down on the QAnon conspiracy theory, including banning thousands of accounts.

    The social media giant said it would also stop recommending content linked to QAnon and block URLs associated with it from being shared on the platform.

    QAnon is a sprawling conspiracy theory whose followers support US President Donald Trump.

    Twitter said it hoped the action would help to prevent “offline harm”.

    In a statement shared on the platform, Twitter said it would permanently suspend accounts that violate its policies while tweeting about QAnon.

    The suspensions will be applied to accounts that are “engaged in violations of our multi-account policy, coordinating abuse around individual victims, or are attempting to evade a previous suspension – something we’ve seen more of in recent weeks,” it said.

    The suspensions are expected to impact about 150,000 accounts worldwide. More than 7,000 accounts have been removed in recent weeks for violations, Twitter said.

    Followers of QAnon believe “deep-state” traitors are plotting against Donald Trump. The conspiracy theory has jumped from fringe social media sites to mainstream attention.

    QAnon supporters have been linked to numerous other false claims that have spread online, including a bizarre conspiracy theory involving a US furniture company and allegations of child trafficking.

    The FBI last year issued a warning about “conspiracy theory-driven domestic extremists” and designated QAnon a potential domestic extremist threat.

    You might also be interested in watching:

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    Media captionHow to talk about conspiracy theories

  • Tokyo Olympics postponement leaves UK firms in limbo

    A passenger wearing a face mask stands next to a poster of Tokyo 2020 Olympic mascot Miraitowa on a train in Tokyo on April 20, 2020

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    With the Tokyo Olympics delayed to 2021 due to Covid-19, UK firms have seen their plans disrupted

    The world of sport has been severely disrupted by Covid-19, with headlines highlighting everything from cancelled events and empty stadiums, to athlete health and spectator safety.

    But the pandemic has also had a huge knock-on effect on businesses that support the sport industry – and nowhere is that more apparent than around the Tokyo 2020 Olympics.

    The Games, originally due to start on Friday, have been delayed until summer 2021, affecting UK firms who had been fortunate enough to win work.

    British companies were set to provide parts for water sport courses, ambulances for horses, power generators, and Olympic venue construction – not to mention softer services such as sponsorship expertise.

    ‘Logistics operation’

    Two of the bigger affected firms are ES Global and Aggreko Events Services.

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    Aggreko provided generators for London’s 2012 Games, including the cross-country cycling events

    Glasgow-based Aggreko is the only British firm among the 66 official Tokyo Olympic partners and sponsors, and has been part of the Games since Seoul 1988, providing generators.

    Its initial Tokyo contract value was around $200m (£158m) and Aggreko said earlier this year it expected that to increase to around $250m. It has received more than $100m in payments so far, as the Japanese hosts continue to deliver scheduled instalments.

    Robert Wells is the managing director of Aggreko Events Services.

    “A postponement is much better than a cancellation,” he says. “At the moment we are in detailed conversations with the Games’ organising committee. There is a huge logistics operation to reschedule things.”

    He said Aggreko was now removing generating equipment it had already installed in some Olympic venues.

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    On 30 March, Tokyo 2020 president Yoshiro Mori announced the Games would be postponed by a year

    They will go back to Aggreko’s facility in Tokyo, stored, and tested to make sure they are ready for next year.

    “Clearly there will be a cost of delay,” Mr Wells adds. “But we can’t quantify that at the moment. We are talking continuously with the organising committee about what it may be.”

    As well as generators, Aggreko is also supplying the likes of power cabling, plus electricity from existing Japanese power grids.

    The firm will be employing some 500 contractors in the run-up to the Games, and 300 during the event.

    ‘Level of uncertainty’

    Meanwhile, London-based ESG will build and dismantle temporary venues for six events: triathlon, shooting, golf, tennis, rowing and hockey.

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    ESG is providing the floor decking for the Olympic triathlon events to be held in central Tokyo

    “Although organisers have made statements that the Games are only postponed, there are contradictory statements coming out at a lower political level – there is a certain level of uncertainty,” says Olly Watts, joint chief executive of ESG.

    “It has been made clear there are circumstances under which the Games could be cancelled, depending on how the virus continues in Japan and worldwide.

    “Our existing contract has cover for any Games cancellation.”

    He says the firm is waiting to see if the Tokyo organisers are going to come up with new contracts, now the event is taking place in 2021.

    “Any changes will be slow to filter down,” he says. “With regard to our existing contracts, my feeling is they will be honoured.”

    ESG had started installing venues, for example, 99% of the shooting venue was in place when the Games were called off in March.

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    Workers install the cauldron from the 1964 Tokyo Olympic Games at the city’s National Stadium

    The others all had equipment on site and were ready to erect.

    Shooting is largely being left up. With the others, all equipment is being stored on site.

    Olympic Games organisers say they are renegotiating existing contracts “for example, with regards to fulfilment periods and delivery dates” and are also “newly procuring other items that will be required”.

    Shipment postponed

    It is not just big-name firms who have been affected by the postponement.

    Smaller UK firms are hoping to showcase their expertise to the Japanese and wider sporting world.

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    Bill Fellowes of Equisave is supplying a total of six horse ambulances for the Tokyo Games

    Newmarket-based Equisave designs and manufactures horse ambulances.

    For founder Bill Fellowes, who started the business in 2000, this will be his third Olympics after London 2012 and Rio 2016.

    His ambulances are manufactured in the UK and the firm provides them to 17 British racecourses and the Middle East.

    “For Tokyo these will be our first trailers to have air-conditioning because of the temperatures there,” he says.

    Equisave is providing six vehicles, with two non-air conditioned vehicles already shipped for test events in Japan last year, and the four high-tech ambulances set to follow.

    “My contract originally said to ship the remaining items in April but the Games were cancelled before then.

    “In my line of work it is financially feast or famine, and we couldn’t afford to sit on the ambulances for a year.

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    From fencing to cycling: Top Japanese fencer Ryo Miyake has temporarily swapped his mask and foil for a bike as an UberEats delivery rider

    “So we came to an arrangement. As long as the Games organisers would pay for the cost of the ambulances in full – which they have done – we will store them here in the UK free for them.”

    The remaining ambulances will now be shipped next year. Despite the uncertainty, one small UK firm is well ahead of the game on Olympic installations.

    ‘All paid for’

    Cumbria-based RapidBlocs makes large blocks to be used in the canoe slalom event. Its equipment has been installed into the concrete course in central Tokyo’s Kasai Rinkai Park.

    Company founder Andy Laird says large blocks – made from polyethylene and steel – are put onto the concrete base of a canoe course. The blocks then “sculpt” the direction and flow of water.

    Mr Laird says work was finished a year ago.

    “We are all paid for. We made it, shipped it, and then installed. The trial event has been held and the course was great.”

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    Andy Laird of RapidBlocs formerly raced in the men’s Premier Division of canoe slalom in the UK

    As well as Tokyo 2020, he has also already installed the canoe slalom course for the 2024 Games in Paris.

    “We completed that in May 2019,” he says. “We are done and dusted for the next two Olympics. That is four Olympics we have supplied now.”

    Silver lining?

    Away from infrastructure, Len Olender is from True Gold Communications, an agency that helps sponsors and sports bodies with their Olympic marketing programmes.

    He has previously worked with the likes of Samsung, Coca-Cola, Fujitsu and NTT.

    Now on his 14th winter and summer games, he has been helping the Oceania National Olympic Committees (ONOC).

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    Olympic kayaker Jo Brigden-Jones: Len Olender is advising the 17-member Oceania National Olympic Committees, which includes Australia

    “We had secured a wonderful plaza at Tokyo harbour for our showcase Oceania Village in partnership with the city of Tokyo,” he says.

    But the postponement means it is not known if the site will be available next year.

    It is hoped that the project will pick up again early next year, but Mr Olender does not know if there will be funding to restart it.

    However, he says there is a potential silver lining to the Olympics’ delay.

    Games partners will have the opportunity to activate their sponsor programmes in a different way, taking account of things like social distancing and AI technology – which could create opportunities.

    Also, Tokyo 2021 organisers might want to sell the Games as part of the global “rebirth” of the sporting world after coronavirus.

    “This could mean heightened interest to be on the Olympic bandwagon, and hence more opportunities for marketing agencies, and sponsorship experts.”

  • ‘We’re at a moment of real change in the world of work’

    RBS branch

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    Royal Bank of Scotland’s decision to allow 50,000 staff to work from home for the rest of 2020 underlines radical changes in the workplace, experts say.

    RBS said it was taking a “cautious approach” to keeping staff safe, a move echoed by similar decisions at the likes of Facebook, Google and Fujitsu.

    The pandemic has forced a change in attitude among employers, said personnel expert Peter Cheese.

    He called it “a moment of real change in the world of work”.

    And it is a change, added Mr Cheese, head of the Chartered Institute of Personnel and Development (CIPD), that puts staff more at the centre of operations.

    Originally, RBS had intended for its employees to work from home until the end of September, but it has now extended the period to early 2021.

    On 17 July, UK Prime Minister Boris Johnson said companies would have more discretion to bring staff back to workplaces if it is safe to do so, from 1 August onwards.

    A spokeswoman for RBS said: “Like we’ve done throughout the pandemic the decision has been made carefully, including considering the latest guidance from the UK government on Friday and our own health and safety standards and procedures.

    “It’s a cautious approach but we feel the right one to take currently. We’re in a fortunate position that so many of our colleagues can work from home and we feel it’s the right decision to continue doing so into 2021.”

    Since the coronavirus lockdown began, about 10,000 RBS employees have continued to work in branches and some offices to support customers, while another 450 employees whose jobs cannot be done at home returned to offices and call centres in June.

    • Coronavirus: No reason to change working from home advice – Vallance
    • Coronavirus: Fujitsu announces permanent work-from-home plan
    • Remote working: How cities might change if we worked from home more

    RBS says that it has been reconsidering how the bank works “in the longer term” and intends to tell staff about “future ways of working” later this year.

    According to Mr Cheese, the pandemic is “forcing different thinking” from employers about the viability of allowing employees to work flexibly.

    “We’re at a moment of real change in the world of work, driven by big existential crises. It’s a big paradigm shift, putting people much more at the centre of thinking,” he said.

    Not working, but shirking

    The CIPD, which represents HR professionals, says the UK has long lagged behind other nations in part-time work, due to a prevailing “culture of presenteeism”, where bosses judge staff performance based on how many hours they spend in the office.

    There is also a long-standing stigma around working from home, but the CIPD says the coronavirus lockdown has been an eye-opener for businesses.

    A recent survey of 1,046 employers by the CIPD found that 28% believe the increase in homeworking during lockdown has increased productivity or efficiency.

    More than half of workforces have been working from home continuously since March, and employers expect the proportion of staff who work from home all the time to rise to 22% post-pandemic, compared with 9% previously.

    “There’s a longstanding belief that if you’re working from home, you’re shirking from home – you’re doing other things that are not work,” said Mr Cheese.

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    “Bosses are starting to shift towards judging output, rather than the number of hours spent in front of the computer.”

    He said the pandemic had forced bosses to care more about the physical and mental wellbeing of their staff.

    “It’s the biggest experiment we’ve ever had in homeworking. A lot of individuals quite like this – they have better work-life balance and they don’t feel they’re being scrutinised, and they don’t have to commute,” said Mr Cheese.

    Not everyone wants to work from home, whether it’s because they live alone, or they have challenging personal circumstances, such as caring for young children or relatives.

    But the pandemic is making employers see staff as people, as opposed to “tools” of the business, he added.

    “Understanding those aspects of their wider lives and their mental wellbeing – it’s created a mindset shift of understanding how we can manage people better.”

    Flexible working

    Entrepreneurs, business strategists and HR experts have been discussing the anthropology of work and its social and economic impacts for at least a decade, and the notion of flexible working has kept coming up.

    Although the pandemic has accelerated thinking about how business processes could be changed to accommodate flexible working, the CIPD thinks it is unlikely that many firms will give up having physical office premises.

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    Instead, the industry body thinks that office spaces will become places where some staff work, or they work in the office at different times and on different days, and that the office space will be used more for face-to-face meetings.

    “In the end, businesses need to make money, but not at any cost,” said Mr Cheese.

    “What’s driven a lot of this thinking is the concept that the only person who matters is the financial stakeholder, but now we’re looking at multidisciplinary stakeholders – the business is responsible to their people, society and the environment.”

  • Home owners in England permitted to add two extra floors

    Example of blueprints for planning applications

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    Riverlim

    Home owners will soon be able to add an extra two floors to their houses without needing full planning permission.

    And developers will be able to knock down unused commercial premises and build residential units.

    The government said the new rules would prompt people to build more bedrooms or flats for elderly relatives, and create additional apartments.

    The changes will be allowed under what’s known as Permitted Development.

    This restricts the powers of local councils to prevent development going ahead.

    The councils are appalled, saying the deregulation does not allow local people a proper say in the way their area looks.

    But the government says it will mean redundant space can be quickly re-purposed to revive High Streets and town centres. It adds that if householders want to build upwards they’ll have to carefully consider the impact on neighbours and the appearance of the extension.

    Quality of life

    The move comes on the day of a damning report to ministers about a previous government scheme to allow commercial buildings to convert to residential.

    It said just a fifth of the resulting homes met national space standards. Some flats were just four metres by four metres, and 10 of the units surveyed appeared to have no window at all.

    Seven out of ten of the units couldn’t get adequate light or ventilation.

    It concluded the scheme has created worse homes – “affecting the health, wellbeing and quality of life of future occupiers”.

    • More ‘modular homes’ provided for city’s homeless
    • Plans for 4,000-job business park submitted

    Speaking about Tuesday’s further deregulation, Housing Secretary Robert Jenrick said: “We are cutting out unnecessary bureaucracy to give small business owners the freedom they need to adapt and evolve, and to renew our town centres with new enterprises and more housing.

    “These changes will help transform boarded-up buildings safely into high quality homes at the heart of their communities.

    “It will mean that families can provide much-needed additional space for children or elderly relatives as their household grows,” he said.

    Unsightly extensions

    The government believes the planning system is a block on economic growth, but some councils say their planning systems can’t cope because the government has stripped so much of their funding.

    Local Government Association housing spokesman David Renard, said: “The planning system is not a barrier to housebuilding with nine in 10 planning applications approved by councils. .

    Neighbours have the right to comment on a development and “should not be exposed to the potential of unsightly large-scale unsuitable extensions being built unchallenged and without scrutiny in their communities,” he said.

    Mr Renard added: “It risks giving developers the freedom to ride roughshod over local areas with communities having no way of ensuring they meet high quality standards, provide any affordable homes or ensure roads, schools and health services are in place.”

    Follow Roger on Twitter @rharrabin

  • Ryanair to close base after pilots reject pay cut

    Ryanair

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    EPA

    Ryanair is shutting its base at Frankfurt Hahn airport after German pilots voted to reject pay cuts.

    The firm said in a memo to pilots that its bases at Berlin Tegel and Dusseldorf airports were also at risk of closure by the end of the summer.

    Airlines have been struggling because of global travel restrictions aimed at halting the spread of the coronavirus.

    Ryanair’s UK pilots and cabin crew recently voted to accept pay cuts to reduce job losses.

    “We must move on with alternative measures to deliver savings, which regrettably will mean base closures and dismissals,” Ryanair said in a memo to its German pilots.

    • Ryanair cabin crew agree to temporary pay cut to keep jobs

    Ryanair announced in May it was set to cut 3,000 jobs across Europe.

    However, earlier this month, the company revealed that it had cut a deal with the Unite union so that UK cabin crew jobs would be safeguarded.

    Ryanair is yet to specify how many jobs will be impacted by the changes in Germany.

    ‘Bizarre’

    German airline union Vereinigung Cockpit said that “less than half of pilots were in favour of accepting” the pay deal.

    “We believe the agreement would have the potential to harm the entire pilot community across Germany,” it said.

    Ryanair said the proposed cuts are based on current schedule plans, and insisted that they could become “considerably worse” if there is a resurgence of coronavirus.

    “We made it clear throughout negotiations that if the vote was unsuccessful, then the next step would have to be dismissals,” it said.

    “It is bizarre that the union canvassed against the deal knowing full well that the result would be base closures and job losses.”

  • Coronavirus: EU leaders reach recovery deal after marathon summit

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    Media captionEuropean Council President Charles Michel said the deal was a “pivotal moment”

    EU leaders have struck a deal on a huge post-coronavirus recovery package following a fourth night of talks.

    It involves €750bn (£677bn; $859bn) in grants and loans to counter the impact of the pandemic in the 27-member bloc.

    The talks saw a split between nations hardest hit by the virus and so-called “frugal” members concerned about costs.

    It is the biggest joint borrowing ever agreed by the EU. Summit chairman Charles Michel said it was a “pivotal moment” for Europe.

    The deal centres on a €390bn programme of grants to member states hardest hit by the pandemic. Italy and Spain are expected to be the main recipients.

    A further €360bn in low-interest loans will be available to members of the bloc.

    The package will allow members to maintain spending in the aftermath of lockdowns that badly affected public finances.

    It includes checks that the funds will not be misused. Recipients will have to submit spending plans to the European Commission, and a majority of states will be able to block projects.

    The package will now face technical negotiations by members, and needs ratification by the European Parliament.

    How did we get here?

    The leaders reached agreement early on Tuesday after more than 90 hours of talks.

    Mr Michel, the president of the European Council, called it “the right deal for Europe right now”.

    Tempers were often frayed during the negotiations. The “frugal four”, Sweden, Denmark, Austria and the Netherlands, along with Finland had opposed extending €500bn in grants.

    The group originally set €375bn as the limit. Other members, such as Spain and Italy, did not want to go below €400bn.

    At one point French President Emmanuel Macron reportedly banged his fists on the table, as he told the “frugal four” they were putting the European project in danger.

    The €390bn figure was suggested as a compromise, and “frugal” nations were reportedly won over by the promise of rebates on their EU budget contributions.

    Another issue was over linking aid to the “rule of law”. Hungary and Poland both threatened to veto the package if it adopted a policy of withholding funds from nations deemed to fall short of democratic principles.

    How have EU European leaders reacted?

    President Macron said it was a “historic day for Europe”.

    Mr Michel said: “We showed collective responsibility and solidarity and we show also our belief in our common future.”

    European Commission President Ursula von der Leyen tweeted. “Today we’ve taken a historic step, we all can be proud of. But other important steps remain. First and most important: to gain the support of the European Parliament. Nobody should take our European Union for granted.”

    Dutch Prime Minister Mark Rutte, who led the “frugal group”, welcomed the agreement, but acknowledged the fractious nature of the talks. “We are all professionals, we can take a few punches,” he told reporters.

    Tough talks reflect power shifts

    The deal was reached after marathon of negotiations that almost became the longest in EU history. The “EU enlargement” summit in Nice 20 years ago lasted only 25 minutes longer.

    For leaders who had pushed for a far-reaching package, the deep frustration, including table-thumping anger from the French president, appears to have dissipated.

    I asked Mr Macron whether he still felt that the “frugal four” had damaged the European project by their hard bargaining. He said, as had been reported: “It’s legitimate that we have different sensibilities… If we don’t take into account the realities, we’d put these leaders in a difficult spot and it would favour the populists.”

    The “Club Med” countries, Spain, Italy and Portugal, appear content with the smaller size of grants available. Portuguese PM Antonio Costa told us: “While it’s true that it could have had a slightly bigger dimension, the recovery plan is robust enough to respond to the current estimates of the coronavirus crisis.”

    As for Europe’s most powerful leader, German Chancellor Angela Merkel, I asked her about the new power balance in the EU. She said: “During the last negotiations [then UK Prime Minister] David Cameron’s view loomed large. Now he is no longer with us, others have come to the fore.”

    How will the deal be funded?

    The European Commission will borrow the €750bn on international markets and distribute the aid.

    The deal was reached alongside agreement on the bloc’s next seven-year budget, worth about €1.1tn.

    The UK, which has recorded more coronavirus deaths than any other European country, left the EU in January and is not involved in the deal.

    Europe’s papers see mixed success

    “The EU is still alive. For a change, that’s good news,” says Germany’s Spiegel correspondent Ronald Nelles, capturing a sense of relief expressed by many.

    Spain’s El País calls the deal “a milestone in the budgetary evolution of the club that has never been so far on the path towards a possible fiscal union”.

    But several commentators note its many compromises. Charles Michel “will have to justify to the EU parliament the fact that the finished paper does not include expenditure on many research and climate projects”, agrees Austria’s Der Standard.

    The Polish prime minister also “boasted that Poland had successfully resisted linking the portion of the money with a commitment to the fight against global warming”, notes a correspondent in Gazeta Wyborcza, quoting Mateusz Morawiecki saying: “We won better rules than the European Commission proposed.”

    “This undeniable victory for Paris and Berlin… will leave a bitter aftertaste,” says France’s Les Echos. “Even hand in hand and without having to confront British roadblocks, this couple is no longer almighty in Europe.”