Week in Review

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What We're Reading:

Lack of info on China’s COVID-19 surge stirs global concern. Moves by several countries to mandate COVID-19 tests for passengers arriving from China reflect global concern that new variants could emerge in its ongoing explosive outbreak—and that the government may not inform the rest of the world quickly enough. (AP

Benjamin Netanyahu returns as PM of Israel’s most far-right gov’t. Netanyahu takes charge of a far-right cabinet that seeks to expand settlements in occupied West Bank and pursue other anti-Palestinian policies. (Aljazeera

Russia bans oil sales to countries using price cap. Russia has banned oil sales to countries and companies that comply with a price cap agreed by Western nations earlier this month. (BBC

Applications for US unemployment aid rose slightly last week. The number of people seeking unemployment benefits rose only slightly last week with the labor market remaining strong despite the Federal Reserve’s efforts to cool the economy and hiring. (AP

Taiwan increases its compulsory military service as it faces pressure from China. Taiwan will extend its compulsory military service from four months to a year starting in 2024, President Tsai Ing-wen said Tuesday, as the self-ruled island faces China's military, diplomatic and trade pressure. (NPR

From China to inflation, 5 economic trends to watch in 2023. The global economy is facing risks and opportunities next year from rising interest rates to China’s reopening. (Aljazeera

Higher interest rates unlikely to dent warehouse demand next year. The Federal Reserve’s rate hikes have made themselves felt in a big way among big money that invests in U.S. logistics real estate. But the aggressive monetary policy has, and is expected, to do little to change the cadence of robust leasing activity, low vacancy rates and soaring rents into 2023, according to various experts. (Freightwaves

Spain announces €10bn help to fight rising prices. Spanish Prime Minister Pedro Sánchez has announced another €10bn (£8.8bn) in support to address rising prices following Russia's invasion of Ukraine. (BBC

Russia's economy is still working but sanctions are starting to have an effect. In the past year, the United States and many of its allies have slapped a massive level of sanctions on Russia over its invasion of Ukraine. (NPR

China ends Covid quarantine for travelers in January. China will scrap quarantine for travelers from 8 January, officials said, marking the last major shift from the country's zero-COVID policy. (BBC

Philippines’ Marcos seeks agreements in China amid tensions. The Philippines says President Ferdinand Marcos Jr. hopes to sign a number of agreements during a visit to Beijing next week that comes amid ongoing territorial disputes in the South China Sea. (AP

Warehouse receipt fraud: Singapore firm can’t trim US$282mn damages ruling. A U.K. appeals court has dismissed an attempt by financial services group Straits Singapore to shave off part of a US$282mn damages order arising from a fake warehouse receipt scandal. (Global Trade Review

 
 

France and Germany Critical in Europe in 2023

Alexander Privitera, fellow at UniMarconi, Rome

One of the most difficult years in recent European history draws to a close, leaving a legacy of unresolved geopolitical and geo-economic challenges. Barring a black swan event that could completely upend the new year, European leaders are likely going to face a similar mix of concerns as in 2022.

Ukraine Still Top of the List

The conflict in Ukraine still tops the list, and it is unclear whether the evolving military situation on the ground will make a diplomatic solution more or less likely in 2023. We must assume that the conflict will not be resolved. If that is the case, Europe’s economy will continue to suffer. However, the continent is now slightly better equipped to withstand the fallout of the conflict.

It reduced its gas consumption by around 10% in 2022 and has diversified its supply sources, reducing its reliance on Russian gas, and increasing imports from other countries, such as Algeria, Norway, Qatar and in particular the U.S.—demand for liquified natural gas (LNG) was up by a whopping 65% in the first eight months of the year.

According to the International Energy Agency the global competition for supplies will cause global markets to remain tight well into 2023. However, the fact that EU countries have largely managed to wean themselves off Russia’s gas, reduces President Vladimir Putin’s capacity to blackmail them. With every passing winter month, Europe regains some resilience, at the very least until the following winter.

Watch the ECB Closely

But, securing a more robust energy supply does not eliminate economic hardship. So far, the economic price for companies and households caused by the impact of the conflict has been cushioned by extraordinary fiscal support. Think of the multiyear 200-billion-euro ($212 billion) German program, or other, less dramatic, but still significant public interventions in most EU countries.

The fiscal largesse has contributed to fuel inflation, especially since measures have not been particularly targeted. Central banks, including the European Central Bank, are responding by tightening financial conditions with a series of interest rates increases. While the ECB still expects inflation rates to start falling from recent heights toward its goal of 2%, the timeline has shifted forward.

The central bank is, therefore, likely to continue to tighten monetary policies well into 2023. The good news for the ECB is that government support should start fading in 2023, as the limited fiscal space in most EU member states is finally exhausted. This should help to contain price dynamics. The bad news is that reduced fiscal support dampens demand and growth. If the expected winter recession turns out to be deep, voices arguing for more financial support from the EU will grow louder. Among them, the newly elected government in Italy.

Return of Fiscal Discipline From 2024?

This would make the ongoing discussion of the fiscal governance of the EU even more difficult, as member states are already engaged in a heated debate on the future of the Stability and Growth Pact. The pact aims to limit fiscal spending to allow member countries to converge toward a common debt target. It was put on ice because of the COVID pandemic so that EU countries could spend more freely. The pact should be re-enforced, in its current, or indeed, in a very different form, from the beginning of 2024. So far, finding a consensus on what shape the SGP should take has been impossible. The danger of a reemergence of old North-South fault lines, between more and less fiscally conservative member states, is very real.

That is why a reset of the currently difficult relationship between France and Germany in 2023 could be pivotal. Fortunately, the two partners recently seem to have shown renewed awareness of what is at stake.

The French-German Relationship Is Pivotal

A better common Franco-German understanding is also needed to define what the EU intends by pursuing its own strategic autonomy. While Europe is still far off from developing autonomous military capabilities able to deal with challenges, such as the conflict in Ukraine, the coming year is going to at least require Paris and Berlin to push for common responses in the geo-economic sphere.

Now that the German version of globalization, based on cheap Russian gas and dependence from the Chinese market, has turned into rubble, Berlin is seeking to refocus on Europe and the US. This also means that the bloc needs to develop a new coherent China policy. While EU member states are increasingly wary of China’s global posture, so far, some European countries have shown reluctance to fully accept the need for a more robust approach toward Beijing.

Add to that the question of how to best deal with the U.S.’s industrial policies designed to support the American green transition, and it becomes clear why institutions in Brussels plan to review and amend the EU’s own competition and industrial policies as early as the beginning of 2023 to better support the bloc’s own investments in the green transition.

Whatever the EU Commission proposes will need buy-in from Paris and Berlin. If the two EU heavyweights can’t agree on a common approach and merely decide to kick the can down the road, the EU risks stumbling from crisis to crisis, with common frameworks, on fiscal and economic governance, becoming increasingly leakier and weaker as a result. Thus, 2023 is shaping up as another year of transition, offering yet another chance for member states to understand that short-term challenges are often best dealt with when the direction of the common journey is better defined.

This article originally appeared on Brink News.

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Ireland: Structural Reforms Are Needed to Ease Long-term Pressures on Public Finances

OECD

Ireland’s economy weathered the COVID-19 pandemic well, emerging with solid GDP growth and a strong fiscal position. Yet rising inflation and global economic uncertainty over Russia’s war of aggression against Ukraine will dent the pace of the recovery, according to a new OECD report.

The latest OECD Economic Survey of Ireland says Ireland’s budget position is expected to return to balance in 2022, thanks mainly to extraordinary corporate tax receipts. However, the government will need to address long-term fiscal risks arising from the health and pension costs of an ageing population. Moreover, major investments will be required to ensure an adequate supply of affordable housing and meet greenhouse gas emission reduction targets.

“Ireland has made impressive progress in developing its economy and raising living standards,” OECD Secretary-General Mathias Cormann said. “Structural reform efforts should now be stepped up so that Ireland can maintain these socio-economic gains in the face of long-term fiscal risks from rising costs related to ageing and the need to increase resilience to future shocks.”

The Survey recommends accompanying investments to boost housing supply and speed up the low-carbon transition with reforms to reduce regulatory and legal hurdles, as a way to reduce uncertainty and transaction costs in both areas. It welcomes a decision to place EUR 6 billion of 2022-23 windfall tax receipts in the National Reserve Fund and suggests this policy could be continued. The country’s new spending rule, limiting permanent spending increases to 5% per year, will improve resilience to future shocks, and Ireland could consider strengthening the rule by giving it legislative status.

Ireland’s real GDP growth was 13.4% in 2021, boosted by exports from multinationals based in Ireland, and is projected to be around 10% in 2022. Modified domestic demand, a national indicator that excludes volatile components of investment spending by multinational firms, fell by 4.8% in 2020 but returned to pre-pandemic levels in the third quarter of 2021.

While Ireland has limited direct trade exposure to Russia and Ukraine, disruption in global commodity markets is driving up food and energy prices. Headline inflation reached 9% in November, driven mainly by a 43% rise in energy prices. With price pressures broadening, the Survey projects that falling real incomes and low consumer confidence will slow modified domestic demand growth to 0.9% in 2023, which should rebound to 3.1% in 2024. As exports in multinational-dominated sectors, though moderating, will remain supportive, GDP is projected to grow by 3.8% in 2023 and 3.3% in 2024. With inflationary pressures putting price stability at risk, it is important that any additional fiscal support be temporary and targeted.

The resilience of Ireland’s economy to the dual shock of COVID-19 and Russia’s war of aggression against Ukraine is the fruit of the country’s progress of recent decades in developing its economy and raising living standards. A highly redistributive tax and transfer system means poverty rates and the gap between highest and lowest incomes are among the smallest in the OECD. Life expectancy at birth has risen dramatically to among the highest in the OECD. A high-quality education system has built a well-educated workforce that is a magnet for foreign investment.

The Survey’s recommended focus on structural reforms and preparing for future fiscal pressures is a way to ensure these gains are sustained for a society grappling with an undersupply of affordable housing and expected to age more rapidly than in most other OECD countries. To improve housing supply, which is constrained by high construction costs, skills shortages and burdensome regulations, the Survey formulates several recommendations. These include the importance of streamlining planning and review processes, making sure local planning authorities have sufficient resources, and prioritizing supply-side policies in Housing for All, the government’s ambitious 2021 initiative to improve planning, land availability, zoning and social housing provision.

The government has also launched a major reform of the health sector, which suffers from legacy issues such as past underinvestment, centralized decision-making and long waiting lists that will be difficult to resolve quickly. Health spending has increased and is now high relative to other OECD countries at around 20% of government spending. Moving from a largely hospital-based system, which does not offer universal coverage of primary care, to one that better integrates primary, community and long-term care could help to enhance access and efficiency. So could improving data availability, financial reporting and management.

See an Overview of the Survey with key findings and charts.

Where Does Executive Presence Matter Most at Work?

Joel Garfinkle, coach and author

Early in your career, you may have, like many of my executive coaching clients, been given evaluation reports that read like a checklist—accomplish these tasks, master this skill and gain this level of efficiency. Rudimentary, but it probably felt more attainable than trying to succeed in the harder-to-categorize aspects of becoming a leader and expressing executive presence. When you’re working in or aspiring to gain a leadership position, very little is about the tasks you do. Quite a lot is about the image you project.  

In my presentation, “Executive Presence: Four Ways to Convey Confidence and Command Respect as a Leader,” I explain how to build a reputation as someone whom both employees and senior management can rely. If you’re looking to take your career to the next level, have a look below at my thoughts on where you can (and must) convey executive presence at work. Spoiler: It’s almost everywhere and in every situation. 

  1. Everyday meetings

Whether they are with team members, vendors or clients your everyday meetings are going to be where you build others’ perceptions of you. Maybe the executive giving your performance review won’t be in the room, but the image you project will always filter back. It matters as much as anything you do or say. Use these opportunities to polish your ability to convey confidence, build your trustworthiness and practice a crisp and concise speaking style. Speak succinctly, and follow through on what you say, no matter who you’re working with.  

  1. Giving presentations

Whenever you are invited to give any presentation, remember that your credibility has landed you here. Don’t act like you have to justify your presence or explain at length why you’re speaking on the topic at hand. Own your executive presence in your presentation and know you’re the best person to speak on it. If you’re rushing through your presentation, you’re diminishing your gravitas and signaling that your topic isn’t worthy of your audience’s time and attention. Know deep down that you’re giving them the information they need. People are listening, and they need to hear decisiveness in your voice. They want you to communicate your ideas clearly so they can benefit from them.  

  1. All-hands meetings

Company gatherings like all-hands or town hall meetings can be tricky—on one hand it would be ideal to be noticed or recognized in such a large group setting. On the other hand, no one wants to be known as someone who always “speaks just to be seen” or whose contributions elicit eye rolling around the room. I always encourage my clients to speak up, but timing and context are key. Often your question or idea would be better heard elsewhere, especially if you’re already at a level where you have access and opportunity to discuss it with a smaller audience. Don’t forget, however, that there are still eyes on you, even if you don’t speak. If you’re looking to lead, act like it. Now is the time to set an example for those around you.  

  1. Trade shows, industry events and vendor showcases

So many of my clients who have told me that they’d rather work late for a month than attend any sort of community event for even an afternoon. Often, they shine in the day-to-day business of getting the job done but loathe the unstructured nature and relationship management requirements of trade shows, industry events and vendor showcases. Whether it’s the small talk or just the lack of clear, attainable goals, many struggle with feeling comfortable in these open-ended events. I challenge them—and you—to see these occasions as opportunities to work on conveying confidence, charisma and command. Think of your goal as strengthening relationships with those around you, networking and making impressions.  

  1. Crisis or high-tension situations

A mentor once pointed out to me that most of us can make good impressions under ideal circumstances, but stress and chaos will bring out our default behaviors unless we are very disciplined and careful. How you handle yourself and others when problems arise will heavily influence how others think of you and how willing they are to work with you in the future. Present the best, most poised and insightful version of yourself when crises arise. These times, as much or more than any other, will be your chance to shine and set yourself apart from the crowd. When others are falling apart, seize the opportunity to be calm and decisive. 

Hopefully, the context and situations where executive presence are key in your job don’t feel too overwhelming. It can be a lot to realize that your tone, words and behavior always matter. You can also think of these situations as dozens of micro-opportunities to tweak your reputation and others’ perception of you. Don’t stress over every situation so much as remember that the big picture always offers chances to improve your executive presence. 

This article originally appeared on SmartBrief.  

Want to activate the executive presence of your employees? As an executive presence coach, Joel Garfinkle will up level the confidence, command and conviction of your employees. Joel is recognized as one of the top 50 coaches in the U.S., and the author of 11 motivational books, includingExecutive Presence: Step into Your Power, Convey Confidence, & Lead with Conviction.  Subscribe to his Fulfillment at Work Newsletter and receive the FREE e-book, 41 Proven Strategies to Get Promoted Now! You can also view over 200 of Joel’s 2-minute inspirational video clips at his YouTube channel. 

 

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Week in Review Editorial Team:

David C. Anderson, Director, FCIB Member Relations

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate