Weekend Box: Metro Challenged, Nobel Prizes & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
Image credit/U.S. Embassy Jerusalem/License
ISRAEL-GAZA: A WEEK OF BLOODSHED
First there are the numbers: over 1,300 dead. The largest loss of Jewish life in a single day since the Holocaust.
Then there is the savagery: women and children brutally raped and killed in the most barbaric manner.
Now comes the reckoning with thousands of Israeli troops massing on the borders of Gaza ahead of a land invasion that now appears inevitable.
The fresh danger for Israel is that she walks into what the former head of MI6 has described as a ‘trap’ by gifting Hamas the conflict it wanted. And it may be that a ground invasion – with the large loss of civilian life that will result – delivers some of Hamas’ wider objectives: to stem the momentum that has been building recently towards a symbolic rapprochement between Israel and the Kingdom of Saudi Arabia, to engender wider regional instability as groups like Hezbollah become involved, and to reignite the Palestinian cause for a new generation.
But to over-analyse the terrorist group’s motivations is to grant them too much credit. Sometimes the best explanations are the simplest. Hamas, like their allies Hezbollah and their sponsors in the Iranian regime, are committed to the destruction of the State of Israel. Given this existential threat, Israel has every right to defend itself.
It is not a fight of the Israeli government’s choosing. Indeed, the terrorism visited upon Israel this week exposes the failure of Benjamin Netanyahu’s policy of containment. There will be a time to ask questions about that and about the security failures that contributed to Saturday’s massacres.
But as the troops await their instructions two things seem certain. The loss of civilian life in Israel and Gaza is far from over. And the seeds of the next conflict will likely be sown in the prosecution of the one that is about to unfold.
Image credit/Keir Starmer on Flickr/License
LABOUR’S GREEN & KEEN CONFERENCE PROPOSALS
A flame seems to have been ignited within the Labour Party, with the Party Conference in Liverpool demonstrating that they have no intention of remaining outside Number 10. Sir Keir Starmer shared his ambitious plans for the country, in contrast to rather flat speeches at the Conservative conference the previous week.
Starmer retained his composure in spite of a protester’s stage invasion and glitter bomb, presenting his Labour as the embodiment of much-needed change after years of undelivered Tory policies and promises. He reaffirmed the party’s five key missions, chief among these being “getting Britain building again” to tackle the housing crisis while simultaneously fuelling economic growth and creating jobs.
Meanwhile Rachel Reeves, who has promised to be the UK’s "iron chancellor," set out an economic vision that included these infrastructure projects as well as investment in large-scale public service improvements. Further promises included grounding private jets used by Tory ministers (with a dig at Prime Minister Rishi Sunak) and cutting spending on consultants. The Shadow Chancellor also got a large cheer in the conference hall with the promise to create a ‘Covid corruption commissioner’ to reclaim taxpayers' money that was lost during the Covid-19 pandemic.
With policies set out and more sharp rebukes of the Conservative Party, it seems Labour has donned its gloves, stepping into the electoral ring with a vision that merges optimism with stability and setting the stage for a political battle as elections hover on the horizon.
For more on what it was like on the ground at Labour Party Conference, read our blog from Lucy Thompson, who was there in person.
Image credit/Kake on Flickr/License
METRO: CHALLENGER CHALLENGED
On Monday, Metro Bank announced that it had secured a refinancing package worth £925m to shore up its unhealthy-looking balance sheet. This came after the British challenger bank found itself under the Prudential Regulatory Authority’s microscope, which was concerned that Metro did not have sufficient buffers and therefore ran the risk of failing.
Over the weekend, there was the brief prospect of a major bank swooping to purchase Metro. In the event, £150m was raised from current shareholders, including Colombian billionaire Jaime Gilinski Bacal. His stake now touches 54%, up from less than 10% before the deal. The rest of the package was made up £175m of new debt and a refinancing of £600m of outstanding borrowings.
The rescue deal comes with tough questions for Metro Bank. When it launched in 2010, it did so with a novel and contrarian strategy of focusing on a physical branch network offering. This was at the exact time when most banks were retreating from brick and mortar or being born as digital-only fintech banks, such as Monzo and Starling.
That expensive branch model is sure to come under scrutiny, although Mr. Gilinksi Bacal says that it has been “a very good asset in terms of building the customer base and the loyalty and service.” He is convinced that by making efficiencies, profitable growth is achievable, drawing on his own experience of similar transformation projects in south America.
Analysts and commentators are less convinced. They worry that Metro’s capital position is too precarious, its regulatory requirements too stringent to manage, and the economic environment too tough to orchestrate a quick turnaround. Metro may be safe for now but it faces a long journey back to favour.
Image credit/Piotr Drabik on Flickr/License
POLAND ELECTIONS: FIGHTING TERMS
On Sunday Poland goes to the polls to decide whether it wants four more years with its Law and Justice party or a new start with the Donald Tusk-led Civic Coalition.
Poland’s governing Law and Justice party (PiS), led by Jarosław Kaczyński, are seeking a third term and are currently leading in polls. Their greatest challenge – though still 7% behind at the time of writing – comes from the Civic Coalition. Despite the shortfall Jaroslaw Walesa, who also represents the coalition, argues that they must “make sure” they win “to reform all that has been destroyed in eight years.”
In its two terms, PiS have rolled back reproductive rights; pushed through a bill in order to bring down independent TV station TVN, which had criticised it; and stoked fears within the EU that the country would exit the union.
The right-wing party is campaigning on promises to increase its child subsidy programme, increase pension payments, and cut petrol prices. It is also, more worryingly, attempting to sway voters with a referendum on the “admission of thousands of illegal immigrants from the Middle East and Africa,” and has committed to restricting judicial powers to challenge the government with the words: “this time, no one will stop us.”
Civic Coalition, meanwhile, promise to revert PiS’ judiciary changes and restore independence to Poland’s media. However, as polls suggest that neither party will have enough votes to form a government whoever comes out on top, the far-right coalition Confederation may prove to be the kingmaker in the election. Polling far behind at 10%, along with other challengers The Left and Third Way, the party may have enough MPs to hold sway in the election and PiS may try to bring some of their members on side to form a government.
Poland, the EU, and the world await the results with bated breath.
Image credit/Adam Baker/License
NOBEL PRIZES FOR NOBLE CAUSES
This year’s Nobel prize-winners were announced this week. The economics prize was awarded to American economist Claudia Goldin for her research on the role of women in the labour market. The jury said the 77-year-old Harvard professor’s research, which trawled the archives to collect over 200 years of data from US sources, won for revealing “the causes of change, as well as the main sources of the remaining gender gap.” Nobel committee member Randi Hjalmarsson called Goldin “a detective” for her persistence in finding the historical data to provide such insight into women’s earnings and labour market participation through the centuries.
Globally, about 50% of women participate in the labour market versus 80% of men, but women earn less and are less likely to reach the top of the career ladder. Goldin attributes this in part to educational decisions made at a relatively young age but affecting career opportunities for life. Where women and men compete in the same roles, the earnings difference largely stems from the birth of the first child. Her work demonstrated that access to the contraceptive pill played an important role in accelerating the increase in education levels during the 20th century, through new opportunities for career planning.
The Nobel Peace Prize went to imprisoned Iranian women’s rights campaigner Narges Mohammadi, while Norwegian author and playwright Jon Fosse was awarded the Prize in Literature.
The chemistry prize went to Moungi Bawendi, Louis Brus, and Alexei Ekimov for their work on nanoparticles called quantum dots. In physics, Anne L’Huillier, Pierre Agostini, and Ferenc Krausz won for using ultra-quick light flashes to enable the study of electrons inside atoms and molecules. The medicine prize went to Katalin Kariko and Drew Weissman for their ground-breaking technology that paved the way for mRNA COVID-19 vaccines. Hopefully, these Laureates will be spurred on to still greater achievements and resist ‘Nobelitis’.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.