FirstFT: Hawkish EU states push for harsher sanctions against Russia

Good morning. Hawkish EU members pushing for harsher measures against Russia, including ejecting more banks from the Swift messaging network and banning diamond imports, as the bloc drafts a round of sanctions over the Ukraine war.

The countries demanding the measures — which would also target luxury goods and Russia’s IT, cyber security and software industries — include Poland and the Baltic states. The move came in response to Vladimir Putin’s military escalation this week.

But officials said it would be difficult to find consensus among the 27 member states. Hungary has said it does not want new sanctions.

The European Commission’s goal is to push through a hard-fought G7 agreement to cap the price of Russian oil following months of US-led negotiations.

A potential new round of sanctions, which would be the eighth, is expected to be formally tabled after meetings between commission officials and member state representatives begin today.

• At the UN: Russia’s foreign minister Sergei Lavrov defended Moscow’s invasion yesterday as he traded barbs with western powers at the UN Security Council.

• And on Russian streets: The Financial Times spoke with people who had been called up to the Russian army, feared they soon would be or had close relatives facing conscription. “My son is supposed to go to war against my nephew,” one said.

Do you support more hard-hitting measures against Russia? Why? Share your thoughts at firstft@ft.com and I might feature them in an upcoming edition of the newsletter. Thank you for reading FirstFT Europe/Africa — Jennifer

Five more stories in the news

1. Kwasi Kwarteng’s plan to kick-start UK economic growth The chancellor will attempt to revive Britain’s economy today with a 30-point growth package to turn “the vicious cycle of stagnation into a virtuous cycle of growth”. The mini-Budget will come a day after the Bank of England raised interest rates by 0.5 percentage points, a more moderate move than the US Federal Reserve.

2. IEA boss: Energy crunch risks shattering EU unity Fatih Birol, the International Energy Agency’s executive director, said he feared “a wild west scenario” if European countries restricted their own trade or stopped collaborating with neighbours over fears of fuel shortages this winter.

• In derivatives markets: European authorities have played down their ability to intervene in derivatives markets to help energy companies after privately admitting that price volatility was not due to the “market malfunctioning”.

• And in the toilet: A major German toilet paper maker has gone bust, while others are cutting production, raising prices or switching to alternative energy sources.

3. Boeing to pay $200mn penalty over 737 Max The aerospace manufacturer and its former chief executive Dennis Muilenburg agreed to pay millions of dollars to settle charges from the US Securities and Exchange Commission of misleading investors about two deadly crashes of its 737 Max aircraft.

4. Concerns over UK plans to review ‘retained’ EU law Prime Minister Liz Truss’s drive to “revoke or reform” all EU laws still in effect in the UK after Brexit risks a potential bonfire of workers’ rights and environmental regulation, labour unions and the Scottish government have warned.

5. Twelve die as Iran cracks down on protests Of the 12 people killed, at least five were members of the security forces, officials said, after the death of 22-year-old Mahsa Amini in police custody triggered the biggest anti-regime protests since 2019. Even staunch supporters of the regime are questioning the need to enforce Islamic dress code.

Did you keep up with the news this week? Take our quiz.

The days ahead

Russian-occupied Ukraine referendums Voting in what Nato has decried as “sham referendums” on whether to join Russia begins today and runs through Tuesday in the Donetsk and Luhansk People’s Republics — ruled by Moscow-backed separatists since 2014 — as well as Kherson and parts of Zaporizhzhia province.

Economic data Composite purchasing managers’ indices of manufacturing and services in September are out for the eurozone, France, Germany, the UK and the US. August surveys pointed to a sharp slowdown in economic growth. The UK’s GfK consumer confidence survey is also out, as are second-quarter gross domestic product figures for Spain. (FT, WSJ)

Labour party conference The UK opposition party begins its four-day annual conference on Sunday in Liverpool, where expected topics include workers’ strikes, the cost of living crisis and the government’s mini-Budget.

Italy general election Voters head to the polls on Sunday after one of the shortest campaigns in the country’s history, arising from prime minister Mario Draghi’s resignation. Italians are expected to deliver a decisive mandate to a rightwing coalition whose rivals have failed to forge a united opposition.

On Monday, join our Tech & Politics Forum in partnership with ETNO to hear industry CEOs, policymakers and investors in Brussels map future policies and rulemaking in EU digital markets. Register here to join the conversation in person or online.

What else we’re reading

Why business leaders should not become cult figures We are fascinated by corporate leadership. But does that obsession come at the expense of corporate governance, ensuring checks on any individual’s power and different opinions around the boardroom table? Adulated chief executives risk getting caught up in money, fame and power.

How much money will make you happy? We all have fantasies about how much we would need to make ourselves satisfied — but it doesn’t have to be a fortune. The real problem is that being a multibillionaire would change your relationship with every other human being. Tim Harford considers how much anyone truly needs.

Why trade couldn’t buy peace In recent decades, the near-consensus of policymakers and business leaders has been that peace was the natural condition of the developed world and that globalisation was immune from geopolitical risk. But as the war in Ukraine and tensions over Taiwan have shown, John Plender writes, they were wrong.

Economics may take us to net zero on its own For the best part of the past 200 years, one rule held across the world: if a country’s economic activity expanded, so did its carbon emissions. But starting in the 1980s with the advent of nuclear power, countries could increasingly cut emissions while growing GDP, notes John Burn-Murdoch.

The five things the tech bubble got right As the tech entrepreneur Paul Graham wrote in the aftermath of the first dotcom crash, stock market investors were right about the direction of travel even if they were wrong about the speed of the journey. John Thornhill revisits that idea as investors survey the wreckage of special purpose acquisition companies.

Books

The six titles up for FT’s 2022 Business Book of the Year Award tackle “some of the toughest and most important issues facing global capitalism”, said Roula Khalaf, FT editor and chair of judges. See which titles made the shortlist.