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When the money runs dry

Balance of Power
Bloomberg

When the pandemic hit, governments threw out the rule book on spending to save their economies from collapse.

Now a debate is looming over how long they can — or should — keep the cash flowing.

Canada represents one end of the spectrum, piling further funds yesterday into its Covid-19 response. That's on top of spending forecast to drive this year's fiscal deficit to 17.5% of gross domestic output, a bigger swing than any other major industrialized economy, according to the International Monetary Fund.

On the other side is Germany, which has has long prided itself on balanced budgets. Its economy minister suggested yesterday that the $18 billion or more a month the government is paying businesses to cover lockdown losses can't continue beyond December in its current form.

The program has helped tide over companies in Europe's biggest economy. Similarly China, which has tamed Covid-19 domestically, is also talking about winding down its stimulus.

Then there's the U.S., where Republicans and Democrats have widely different views on how much more money is needed. Democrats have accused Donald Trump's Treasury of trying to hobble President-elect Joe Biden's fledgling administration by restricting its access to unspent stimulus funds.

Federal Reserve Chair Jerome Powell has warned the economy remains in a damaged and uncertain state, despite progress made toward coronavirus vaccines.

And those vaccines may take a long time to reach workers and consumers across the globe. While people wait, they face increased uncertainty over their livelihoods as well as their health. — Michael Winfrey

A worker sits with to-go bags in the window of a bar in Toronto, which is under a coronavirus lockdown, on Nov. 23.

Photographer: Cole Burston/Bloomberg

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Global Headlines

Partisan sparring | Biden is setting up his first confirmation fight with Senate Republicans by choosing Neera Tanden — a sometimes-acerbic Democratic policy wonk with an often-partisan Twitter feed — as White House budget chief.

  • Arizona and Wisconsin confirmed that Biden won those states, the latest blow to Trump's bid to overturn his defeat.

  • Biden spoke by phone yesterday with Argentine President Alberto Fernandez, the start of a relationship key to Argentina's debt negotiations with the IMF.

Domestic goals | Beijing fired back at Australia's outrage over a provocative tweet depicting a soldier holding a bloody knife to an Afghan child's throat, with the barrage from its diplomats and Foreign Ministry drawing praise on Chinese social media. It shows how China's rhetoric is increasingly driven by concerns at home, where President Xi Jinping's promise of national rejuvenation and a torrent of overseas criticism are fanning nationalistic sentiment.

Foreign Ministry spokeswoman Hua Chunying won plaudits on social media for exuding the "style of a great power" when she hit back at Australian criticism.

Photographer: Artyom Ivanov/TASS/Getty Images

About face | President Emmanuel Macron's government is on the defensive after three officers were filmed attacking a Black man last month. A Senate committee will question the national police chief, a day after Macron's party retreated from plans to criminalize the filming of officers. It's a U-turn from the president's push for tougher legislation to improve security and crack down on crime following the Oct. 16 beheading of a teacher by an Islamist militant.

Crude clash | OPEC+ talks were put off to give ministers more time to reach a deal after a long and tense meeting on oil production broke down without agreement. The two-day delay is the most dramatic sign yet of the division inside the cartel, which is trying to clinch a deal to avoid undermining crude prices after Covid-19 helped trigger a crash earlier this year.

Nuclear signals | Iran moved to potentially weaken its commitment to an already fragile nuclear deal when its parliament gave preliminary passage to draft legislation that could end inspections of its sites by early next year. The Guardian Council still has to give its assent to the bill, which would restrict the activities of international monitors if U.S. oil and banking sanctions aren't lifted within three months of its final approval.

What to Watch

  • Hungary and Poland are headed for the gravest clash with their peers since they joined the European Union in 2004, after reiterating they won't agree to tying disbursements from the bloc's budget and virus-recovery fund to upholding the rule of law.
  • British Prime Minister Boris Johnson is battling to win support for his virus strategy from lawmakers in his Conservative Party who are threatening to vote against the plan today in the House of Commons.

  • Euro-area finance ministers have struck a deal on a long-planned overhaul of the region's bailout fund, moving a step closer to shoring up the euro's architecture.

  • Vice President Mike Pence told governors that distribution of a coronavirus vaccine could begin by the third week of December, signaling that U.S. regulators will swiftly approve an emergency authorization for the first shots.

And finally ... A decade from now, the bars and clubs on Spain's east coast may no longer exist. In a new series of images from French photographer Francois Prost, the faded facades of the nightspots that saw their regular crowds vanish during the pandemic don't suggest a bright future, even after the virus recedes. Take a look at how venues normally thronged by revelers appear when thumping rave music gives way to silence.

Spanish clubs' promise of easily accessible shameless fun and indulgence feels poignant now that the paint is peeling and the crowds have vanished.

Photographer: Francois Prost



 

 

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