EU weighs rolling over €350bn in Covid-era bonds to avert spending crunch

Good morning. We’ve got a number of unique tales right this moment, together with on an elite US Navy unit planning for a possible Chinese language invasion of Taiwan and Spain blocking the Hungarian takeover of a Madrid-based practice group over Ukraine-related considerations. Extra particulars under.

However first, we flip to Brussels, the place EU officers are inspecting methods to roll over lots of of billions of euros of Covid-era bonds with a purpose to keep away from the bloc’s frequent finances being overwhelmed by compensation prices.

Such a transfer, backed as an possibility by former Italian premier Mario Draghi, would lengthen as a lot as €350bn of unprecedented pandemic-era EU borrowing, in line with folks acquainted with the difficulty. Discussions are at an early stage over the right way to design an answer that will overcome staunch opposition from capitals comparable to Berlin and important authorized constraints, in addition to win over buyers.

However officers in Brussels worry the compensation prices, if unaddressed, might hobble the EU’s spending energy in coming years. Draghi warned in a report this week that the looming obligations — and the unwillingness of EU states to present Brussels revenue-raising powers or more cash — left the EU dealing with a debilitating finances crunch. We have more on the option to roll over debt, presented by Draghi in his 400-page report this week.

Right here’s what else I’m holding tabs on right this moment:

• ECB price choice: Traders anticipate the European Central Financial institution to lower borrowing costs right this moment and can be searching for hints of one other lower in October.

• Oil costs: The Worldwide Power Company publishes its oil market report. Brent crude tumbled out of its year-long buying and selling vary on Tuesday as buyers grew more and more nervous about slowing demand.

• UK politics: Prime Minister Sir Keir Starmer responds to an official evaluation discovering the NHS in “critical condition”. His chancellor Rachel Reeves and Financial institution of England governor Andrew Bailey meet high financial institution bosses, who worry she is planning a tax raid on the sector within the Price range.

• Outcomes: John Lewis and Adobe report.

Know of a European firm that has made a intelligent shift in technique or enterprise mannequin? Nominate them for the FT Reinvention Champions 2024 — make certain to submit your entries by tomorrow.

5 extra high tales

1. Donald Trump’s marketing campaign is reeling after his poor efficiency within the debate in opposition to Kamala Harris yesterday. Exasperated allies thought the previous president was outplayed by the vice-president and appeared unprepared, with Republican strategists and donors calling the face-off a “missed opportunity”.

FT consultants will dissect the talk and its influence on the White Home race in an unique webinar right this moment. Join us at 5pm BST.

2. Unique: Spain blocked a €619mn Hungarian takeover of Madrid-based trainmaker Talgo on the grounds that Viktor Orbán’s Russia-friendly authorities mustn’t purchase know-how that might be helpful to Ukraine, in line with folks acquainted with the matter. Read the full story.

3. Unique: The US Navy Seal unit that killed Osama bin Laden has been coaching for missions to assist Taiwan whether it is invaded by China, in line with folks acquainted with the preparations. Seal Staff 6, tasked with a number of the navy’s most delicate and troublesome missions, has been planning and training for more than a year.

4. Unique: 7-Eleven’s proprietor has tapped Nomura to advise on a possible takeover battle with Alimentation Couche-Tard, in line with three folks with information of the state of affairs. The Canadian dad or mum of rival chain Circle Okay mentioned it remained “extremely centered” on the takeover, regardless of Seven & i’s rejection of its preliminary $39bn bid. More details here.

5. OpenAI is aiming to lift no less than $5bn from buyers together with Apple, Nvidia, Microsoft and Thrive Capital. The San Francisco-based group is in search of extra funding to fund its bold plans to develop AI fashions able to outperforming human intelligence, in a deal that could nearly double the start-up’s valuation to $150bn.

The Large Learn

Amid political and financial pressures, enterprise capital finance has dried up in China, prompting a dramatic fall in new firm formation. Founders and buyers harbour few hopes of a return to the glory years earlier than the Covid-19 pandemic, when the likes of Alibaba and Tencent took benefit of speedy financial development and the rise of cellular web to grow to be globally important tech corporations. One Chinese language government mentioned: “The whole industry has just died before our eyes.”

We’re additionally studying . . . 

• Gary Stevenson: For a lot of followers, his self-proclaimed success as a dealer is what makes him such a compelling critic of inequality. His former Citigroup colleagues have a different story.

• UniCredit: The Italian lender’s announcement that it had constructed a 9 per cent stake in rival Commerzbank has stoked takeover rumours and caught the German institution without warning.

• Tata’s UK plant: Each the federal government and the Indian group have hailed the latest £1.25bn deal, however the way forward for British steelmaking remains in question.

• US Metal deal: Nippon Metal’s doomed bid through the election season affords classes on the limits of American friendship, writes Leo Lewis.

Chart of the day

The UK Treasury has refused to offer key particulars of the £22bn fiscal “black hole” that chancellor Rachel Reeves claims to have found, fuelling doubts in regards to the authorities’s transparency. A freedom of knowledge request by the Monetary Instances for an actual breakdown was declined, with officers insisting they want extra time to make sure the figures are correct.

Take a break from the information

The boys’s grooming sector is booming. Lately, devoted manufacturers together with Harry Types’ Pleasing, Dwayne Johnson’s Papatui and Jake Paul’s W have entered the market. Do males really want so many specialised grooming merchandise? Teo van den Broeke investigates.

Further contributions from Benjamin Wilhelm and Gordon Smith