Daily Brief – Ukraine Loan

Ukraine Loan

Russia has FX reserves of EUR 270 billion of which EUR 210 billion sits in Euroclear Brussels. The EU has stopped short of seizing those reserves which would be illegal but has come up with EUR 35 billion of the EUR 50 billion pledged to help Ukraine internationally. How? By borrowing EUR 35 billion secured against Russia’s reserves. Repayments and debt service will be from the income on those reserves neatly avoiding any liability from the EU and making Russia pay. The funds can be deployed in any way that Ukraine sees fit including the purchase of weapons.

EUR/GBP 0.8379.

Potsdam Politics

This weekend has seen the Brandenburg state election and while the outcome of yet another Far Right victory is expected by many, even if that fails to materialise, the SPD will be weakened even if it clings on to power. All eyes on the state capital Potsdam as the SPD candidate has refused to appear on an electioneering platform alongside party chief Chancellor Olaf Scholz. Dietmar Woidke has also said that he will resign if the SPD fails to see off the right wing AfD. The sub plot of course is that in Germany’s murky politics this looks awfully like a confidence vote in Chancellor Scholz rather than just a state election.

EUR/USD 1.1162.

Own Goal

A classic by the UK’s HMRC which offers tax breaks to companies to invest in equipment and machinery. The latest estimate is that in 2023 those breaks reduced the tax take by £30 billion but generated only £10.5 billion of new expenditure on machinery and equipment scoring a net £19.5 billion cost for the UK tax payer.

GBP/USD 1.3321.

Spanish Steps, Rome

Despite the name there is a fierce dispute between France and Italy as to which country owns the Spanish Steps. It all goes back to a French diplomat who commissioned and paid for the construction which took place between 1723-1726; the Spanish Steps were part of the portfolio of overseas properties coming under Les Pieux Etablissements. The row will doubtless cause more than a frisson at the G7 Culture Ministers’ meeting this weekend in Naples.

USD/JPY 143.85.

Heroes

This is one of David Bowie’s very best songs and it was released this day in 1977 written by DB and Brian Eno formerly of Roxy Music. David Bowie was big at that time but his fame grew throughout his life and in a non musical context, he was one of the very first artistes to sell the future royalties of his song catalogue to realize a significant sum which more than kept him in luxury for the rest of his life.

I, I will be king
And you, you will be queen
Though nothing will drive them away
We can beat them, just for one day
We can be heroes, just for one day

And you, you can be mean
And I, I’ll drink all the time
‘Cause we’re lovers, and that is a fact
Yes we’re lovers, and that is that
Though nothing will keep us together
We could steal time just for one day
We can be heroes for ever and ever
What d’you say?

I, I wish you could swim
Like the dolphins, like dolphins can swim
Though nothing, nothing will keep us together
We can beat them, for ever and ever
Oh we can be Heroes, just for one day

I, I will be king
And you, you will be queen
Though nothing will drive them away
We can be Heroes, just for one day
We can be us, just for one day

I, I can remember (I remember)
Standing, by the wall (by the wall)
And the guns, shot above our heads (over our heads)
And we kissed, as though nothing could fall (nothing could fall)
And the shame, was on the other side
Oh we can beat them, for ever and ever
Then we could be Heroes, just for one day

We can be Heroes

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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