Is The AI Talent War Heating Up?

Such protests have also hit other overcrowded European destinations, and thankfully haven’t been violent. In Spain, they dramatize the contradictions in a remarkable, decade-long recovery from the euro-zone’s financial crisis. That rebirth makes it something of a guinea pig for three of the rich world’s biggest issues — migration, housing and the energy transition — and in certain respects a counterpoint to the United States. Both countries are dealing with the aftereffects of massive housing bubbles that came to a head almost two decades ago. Both have recovered, but did so with almost totally opposed policies now coming under strain.Tourism has been central to the Spanish revival. The sector had already developed far beyond its roots offering cheap holidays in the sun for Britons, but last year drew 134 million visitors, 10 million more than in 2023, and nearly treble the 48 million population. The intake was greater than any ever received before the pandemic. Only neighbor France attracted more tourists last year; the US was third.

A halo of services has grown up to cater to them, including, Rafael Hurtado of Allianz points out, luxury hospitals: “People come from all over the world to lose weight at the Buchinger Wilhelmi fasting clinic in Marbella.”

Such developments exacerbate tension already created by a shortage of housing for local people in tourist spots, particularly combined with a startling influx of migrants that the government has directly encouraged. Over a million arrived last year. In such circumstances, social pressure is inevitable; Spain’s ability to navigate it could provide critical lessons for the rest of the world.

Housing Bubble

Spain was the only country to suffer a housing bubble even more severe than the US. Starting in 1995, American home prices rose 130% before peaking in 2005, according to the S&P Case-Shiller indices. Spain’s rose 213% and hit a top two years later.

There were similar causes. Financial systems proved inadequately regulated and distributed loans too easily. Global imbalances pumped in far more money than the housing sectors could possibly use. Low euro-zone interest rates brought German financiers into Spanish construction looking for yields unavailable at home.

Both countries raised public debt to get through the crisis that followed the Lehman collapse in 2008. Five years later, they had public-sector debt ratios to GDP of about 100%. But unlike the US, which has control of its own currency and could print a lot of it, membership of the euro forced Spain into austerity measures to avoid default. Now, even after Covid, Spain sits at 101.8%, while the US is 124.3%, making it more vulnerable to the “bond vigilantes” who once forced Spain into crisis.

“We are now in a very comfortable position because we did what we needed to do 10 years ago,” says Iñigo Fernandez de Mesa, who heads Rothschild in Madrid and was finance minister during the crisis. “All the countries in the EU that are growing — Greece, Cyprus, Ireland, Spain — did their reforms a decade ago.” They did this because they had to, Fernandez told a conference organized by Unigestion in Madrid this week, but that turned out to be a “huge opportunity.”

Spain radically restructured its banking industry. In 2007, it had 45 savings banks, known as cajas, that were mutually owned and often effectively controlled by local politicians. Two are left. In the US, banks avoided a similar reckoning. The non-bank sector has boomed, and more deregulation lies ahead under Trump 2.0.

US house prices are now 75% above their bubble-era peak, creating a nightmare affordability problem. Spanish homes are cheaper than in 2007. But despite past overdevelopment, there’s a housing shortage in the places where people want to live. White elephant developments stay empty. Burned in 2008, investors won’t build on a scale that would relieve the pressure on tourist regions and cities, which drives the anger in the protests.

Immigration

Americans are, of course, embarking on an ambitious attempt to send migrants back. Spain’s approach is diametrically different. “2025 will mark Spain as a beacon for inclusion and living in harmony with migrants,” said Elma Saiz, immigration minister in the left-wing minority government, as she hailed a sweeping reform that came into effect last month. It aims to legalize 300,000 undocumented migrants a year. The US clampdown on migration from Latin America is driven by cultural concerns. There’s a belief that the Latino population will not assimilate. In Spain, cultural affinity to Latin America is seen as a key to attracting gifted young workers. Assimilation isn’t an issue. No other EU country has a similar source of potential new people.

Even where cultural issues are far tougher, the Spanish approach is strikingly liberal. The Canary Islands have become a major entry point for people fleeing Africa — and soccer stars like Barcelona’s Lamine Yamal and Ansu Fati demonstrate that the African community is forming roots. Last year, Madrid signed agreements with Gambia and Mauritania on “circular migration,” in which people could come and work legally, and then return.

Nevertheless, the abrasive attempt to encourage migrantas is creating opposition. Like all other major European countries, Spain has a growing populist anti-immigration party. Recent polls show Vox gaining support rapidly this year to reach 15% — still a long way behind recent electoral showings for the Rassemblement National in France, or Alternative für Deutschland in Germany. Memories of the Franco dictatorship, which endured until 1975, create greater resistance to the hard right than in France.

Still, the influx is on a greater scale than the country has seen before. In 2013, during the recession that followed the euro crisis, over 450,000 mostly younger Spaniards looked for work abroad, more than double the number of people coming in. That soon changed. By 2019, the eve of the pandemic, Spain received 666,000 migrants. In both 2022 and 2023, some 1.1 million arrived.

This isn’t generating as much friction as elsewhere, as Spain has plenty of work to offer them. Falling birth rates, a global phenomenon, are particularly severe, just 1.19 babies per woman last year (compared to 1.66 in the US). Migration should give the economy fuel to grow that it would otherwise lack. But the lesson for others may be that it works best if newcomers can assimilate without serious cultural conflict.Energy

There’s another theme where Spain appears to be the antithesis of America. It now gets some 77% of its energy from alternative sources — mostly wind and solar, but also nuclear. The transition has advanced further than anywhere else in Europe, with a goal of 100% of electricity coming from clean energy by 2050.

This plays to natural advantages of a warm, sunny climate and a long coastline. It also helps to deal with the disadvantage of being a long distance from big petroleum exporting countries, such as Russia. Given Spain’s lack of fossil fuels, clean energy appeals much more than in the US. It’s taken as read that 1) climate change is a serious issue, and 2) investment in new energy can boost the economy.

Critics of alternative energy took heart in April, when much of the Iberian peninsula suffered a 19-hour total blackout. It’s hard to blame it solely on renewables, although the 182-page government report released this week signally failed to answer all the questions. The collapse appears to have arisen from connectivity problems with the national grid, rather than any specific issue with the clean energy components. As with migration, the blackout leaves Spain as a key test laboratory for a globally contentious policy — energy transition. Keeping It GoingTo succeed, Spain must build the extra houses it needs, reverse underinvestment in its grid, and demonstrate that allowing in a migrant workforce can deliver benefits for everyone. It’s out on the limb in other ways — such as being at odds with the rest of the EU over NATO’s plan to increase arms spending to 5% of GDP; in 2024, only 1.28% went on defense.

The government is dealing with a corruption scandal, but has time on its side as the next election isn’t due until 2027. However, any of these issues has the potential to erase the thin numbers that have kept Prime Minister Pedro Sanchez in office.

So far the protests, while eye-catching, haven’t been so big. In Barcelona, a crowd of only about 600 massed outside Gaudi’s Sagrada Familia, far fewer than expected. La Vangaurdia reported that one of the few times police needed to get involved was in rescuing a tourist. Protesters were shouting “Nazis out!” They were infuriated by his MAGA hat.

Source: Bloomberg Europe

The World Bank has asked developing countries to fully disclose their debts and thus steer clear of any future crises.

In a Friday report, the bank called for “radical” transparency among developing countries, aiming to expand the scope and clarity of disclosures around new loans.

Axel van Trotsenburg, senior managing director at the bank, even commented:

When hidden debt surfaces, financing dries up and terms worsen. Radical debt transparency, which makes timely and reliable information accessible, is fundamental to break the cycle.

World Bank wants countries to increase audits and reveal details on their loans

The World Bank insists that countries institute legal frameworks that compel transparency in loan contracting and ensure the disclosure of more granular debt information. The institution also wants nations to normalize audits and public disclosure of debt restructuring terms, and asks lenders to reveal the details of their loans and guarantees.

It also urges countries to adopt improved tools that help international financial institutions identify cases of misreporting.

For some time now, the World Bank and other multilateral banks have been pushing for increased transparency, and their efforts may have encouraged countries to step up.

While under 60% of low-income countries disclosed debt data in 2020, the figure has since risen to more than 75%. Only 25% reveal loan-level data, and multiple countries have resorted to central bank swaps and collateralized transactions that make it challenging to report data.

For starters, Senegal has relied on private debt placements as it works through discussions with the IMF concerning previous debt misreporting. Similarly, Cameroon and Gabon have resorted to “off-screen” deals, and Angola was forced to cover a $200 million margin call following a sharp decline in its bond prices.

Meanwhile, Nigeria’s central bank revealed in early 2023 that a significant portion of its foreign exchange reserves—worth billions of dollars—had been locked into complex financial agreements.

World Bank says FDI has dropped to its lowest level since 2005

The bank noted that developing economies have seen the weakest levels of foreign direct investment since 2005, as trade and investment barriers continue to grow.

In 2023, developing nations attracted just $435 billion in foreign direct investment—their lowest inflow since 2005—while high-income countries saw only $336 billion, marking the lowest since 1996.

Indermit Gill, the bank’s Group Chief Economist and Senior Vice President, believes it’s not by chance that FDI inflows slowed at the same time as public debt rose to record levels. He argued that several governments have been instituting trade and investment barriers in the last few years instead of disbanding them, calling for a change in action.

Governments and some financial and civil society institutions agreed to have their representatives meet from June 30 to July 3 in Seville, Spain, to discuss strategies to put together finances to achieve key global and national development goals.

Some have suggested the reduction of investment restrictions, seeing that about 50% of government FDI measures introduced in developing nations since 2010 have been restrictive. The bank’s analysis also shows that expediting investment projects would help raise FDI inflows.

Ayhan Kose, the Deputy Chief Economist and Director of the Prospects Group at the bank, believes that a rise in FDI is critical for more employment opportunities, a steady growth rate, and to facilitate development. He added that countries need to enact bold domestic reforms to improve the business climate and decisive global cooperation to revive cross-border investment.

Source: CryptoSlate

Climate change is likely intensifying the heat wave scorching the UK, increasing temperatures by as much as 4C (7.2F), according to new research.

High pressure over the UK, along with a stream of air that is rapidly warming as it descends from over Greenland, will bring highs of 33C to London on Saturday, with 34C for parts of eastern England, Met Office forecasts show.

Global warming has increased the chances of an early season heat wave in the UK from once every 50 years in a pre-industrial climate to every five years, according to analysis published Friday by a team of researchers at Imperial College London and the World Weather Attribution group.

“This means, essentially that what would’ve been already a warm, sunny period has been now classed as a heat wave,” said Friederike Otto, an Imperial College climate scientist who was part of the research team.

UK health authorities have issued amber heat alerts, warning that high temperatures could disrupt transport and trigger health emergencies among vulnerable people. The London Fire Brigade has issued a wildfire warning ahead of the weekend, when it expects the public to flock to open spaces that pose fire risks.

The UK Met Office forecasts uncomfortably hot and sleepless nights and stifling humidity. It has issued yellow alerts for severe thunderstorms across northern England on Saturday and Sunday, with the risk of flooding and large hail stones.

The heat wave is also hitting continental Europe.

Amber heat alerts have been issued across a wide area of northwestern France, where temperatures could top 37C on Friday and Saturday, according to government forecaster Météo-France.

Local transportation authorities are reducing speed limits on roads in the Alpes-Maritimes, Bouches-du-Rhône and Vaucluse departments to reduce ozone concentrations. Air quality is set to deteriorate as the heat wave progresses, AtmoSud said.

State-owned utility Electricite de France SA has warned that it may be forced to curb nuclear output from June 25 due to the rising temperature of the Rhone river that’s used for cooling some of its reactors, particularly the Bugey power station.

Amber heat alerts have also been issued across Spain, with forecaster AEMET expecting temperatures as high as 40C in some regions on Friday.

Source: Bloomberg Europe

Thailand's embattled Prime Minister Paetongtarn Shinawatra faced the prospect of losing her government's majority on Friday, as a vital coalition partner looked set to demand her resignation and senators launched a legal bid to remove her from office.

Paetongtarn, the politically inexperienced daughter of divisive tycoon and former premier Thaksin Shinawatra, is fighting fires on multiple fronts, struggling to breathe life into a stagnant economy facing steep U.S. tariffs and under pressure to take a tougher stand on a territorial row with Cambodia that has seen their troops mobilise at the border.

The United Thai Nation party, the second-largest partner in her alliance, will demand Paetongtarn, 38, step down as a condition for it to remain in the Pheu Thai Party-led coalition, two UTN sources told Reuters, requesting anonymity because they were not authorised to speak to media.

"If she doesn't resign, the party would leave the government," one source said. "We want the party leader to tell the PM as a courtesy."

Though Paetongtarn received a boost on Friday with another coalition partner, the Democrat Party, pledging its support, Thailand's youngest premier is still in an untenable position, with her majority hinging on UTN staying in the alliance following Wednesday's exit by the larger Bhumjaithai Party.

It is unclear when UTN will announce its position and a spokesperson said the party would wait for its leader to inform the prime minister of its decision.

Reflecting concerns in financial markets, the Thai baht weakened for a fifth consecutive session on Friday and was on course to log its worst week in four months.

TUMULTUOUS PAST

Paetongtarn's battle to stay in power demonstrates the declining strength of Pheu Thai, the populist juggernaut of the billionaire Shinawatra family that has dominated Thai elections since 2001, enduring military coups and court rulings that have toppled multiple governments and prime ministers.

But Paetongtarn is facing domestic anger and the prospect of an internal revolt over Wednesday's embarrassing leak of a phone call between her and Cambodia's influential former leader Hun Sen - once seen as a Shinawatra family ally - which her critics say posed a threat to Thailand's sovereignty and integrity.

During the conversation, Paetongtarn called for a peaceful resolution of the border dispute and disparaged an outspoken Thai army general who she said "just wants to look cool", a red line in a country where the military has a high profile and significant political clout.

Pressure mounted on Friday from outside her government, with 69 senators petitioning both the Constitutional Court and an anti-graft agency over the phone conversation leak, seeking a determination and an investigation, respectively, into whether Paetongtarn breached leadership moral standards.

Activists also met on Friday to schedule a major protest in Bangkok starting on June 28 to demand Paetongtarn resigns, among them groups with a history of crippling rallies against Shinawatra administrations.

Paetongtarn has not commented on the turmoil in her government and has tried to present a united front on the Cambodia issue, appearing on Thursday alongside military chiefs and vowing to defend sovereignty.

The premier visited military units at the Cambodia border on Friday, where she handed out food packages to soldiers and was given a tour by Lieutenant General Boonsin Padklang, the regional commander whom she criticised in the leaked call.

Paetongtarn's options for staying in power are limited unless her allies can succeed in behind-the-scenes horse-trading.

A snap election could damage Pheu Thai and play into the hands of the progressive opposition People's Party, the largest force in parliament.

Two Pheu Thai sources told Reuters the party is confident Paetongtarn can avoid resigning or dissolving parliament and her government is considering a major cabinet reshuffle to fill vacant positions.

Source: Reuters

If Americans thought eggs were expensive, wait until they open their electricity bills.

The soaring costs of eggs during the past three years became a politically charged example of consumer inflation in the US. While they’ve recently fallen to the lowest since December — to the satisfaction of President Donald Trump — electricity rates show no sign of moderating.

Power charges in the US jumped 4.5% in the past year, almost double the gains for the broader consumer price index. Driving that is supercharged demand from data centers and manufacturing in the face of tight supply, said Calvin Butler, chief executive officer of Chicago-based utility Exelon Corp.

Coal and natural gas plants are being retired, and not enough replacement sources are being built. Trump’s policies aim to slow those fossil-fuel closures while ending tax incentives for wind and solar power.

“When you have increased demand and limited supply, you’re going to pay more,” Butler said in an interview. Exelon set aside $50 million to help low-income customers pay high summer bills.

The impact from data centers and artificial intelligence is already here. Rapid development of these power-hungry facilities increased electricity costs by $9.3 billion on the largest US grid, operated by PJM Interconnection.

People from Illinois to Washington likely will see that reflected in utility bills starting this month. Surging demand is “almost entirely the result of large load additions from data centers,” according to a report from PJM’s watchdog.

Of course, power prices have been a contentious issue for years — and AI isn’t the only aggravating factor. Weather disasters, for example, have necessitated grid repairs and fortifications.

Egg costs climbed more than 50% in the past two years, and electricity threatens to follow the same path.

In Virginia, home to the world’s biggest cluster of data centers, the facilities are expected to boost the amount residents pay for power generation and transmission by as much as 26% this decade and 41% the next.

That’s not going over well in certain quarters. A daily newsletter from an opponent of the centers is capturing the rising anger of some residents, publishing missives titled “The Cloud Comes at a Cost” and “Vive la Résistance.”

One of the biggest foreign takeovers in Australian history will force regulators and politicians to weigh control over critical energy infrastructure against the need to address a looming domestic gas shortfall. Santos Ltd.’s board agreed this week to back a $19 billion bid from a group led by Abu Dhabi National Oil Co., a state-owned firm. Yet the ASX-listed company’s shares remain at a discount to the offer, reflecting investor uncertainty about the Foreign Investment Review Board, which has blocked similar deals.

Oil slumped after Trump signaled a decision on whether to strike Iran will be made within two weeks, easing fears about an imminent attack from the US.

Apollo Global Management Inc. is nearing an agreement with Electricite de France SA to provide as much as £5 billion ($6.7 billion) of financing for the Hinkley Point C nuclear power plant in the UK.

China Mineral Resources Group Co. has become the single biggest force in the nation’s $130 billion market for iron ore imports, just three years after the government-run trader was founded.

The potential $8 billion sale of Aethon Energy Management to Mitsubishi Corp. would mark another milestone for the H.L. Hunt family’s century-long legacy in the Texas oil industry.

Greenland has given permission to a Canadian mining company to explore for molybdenum, a metal critical to steel production, amid growing demand from the defense industry.

Companies led by Meta Platforms Inc. signed long-term contracts for more than 2.8 gigawatts of solar, wind and geothermal energy in May, pushing 2025’s tally close to the record 16.8 gigawatts announced at the same point last year, according to BloombergNEF. With major nuclear deals disclosed already in June, Big Tech is on a clean-energy buying spree in the Americas, which saw more transactions than a year earlier. Momentum in the Europe, Middle East and Africa region is slowing.

A warming planet, complex geopolitics and fierce competition are putting companies’ operations under increasing scrutiny. The Bloomberg Sustainable Business Summit returns to London on June 26 to explore ways to bolster resilience and mitigate risk.

Source: Bloomberg Europe

Top U.K., France and Germany diplomats are pushing for eleventh-hour diplomacy with Iran in Geneva on Friday, as Washington weighs the possibility of joining Israel's military campaign against Tehran over the next two weeks.

Iran and Israel have been trading fire for the past week, in the latest climax of tensions that have been simmering since the Tehran-backed Hamas' terrorist attack against the Jewish state in October 2023. Israel has since been fighting a war on multiple battles against the Palestinian militant group and other Iranian proxies, such as Lebanon's Hezbollah and Yemen's Houthi — which Tehran says are acting independently.

The conflict has risked further escalation since the start of the week, amid signals that the U.S. — historically a close ally and weapons supplier of Israel — could intervene militarily against Tehran.

"Based on the fact that there's a substantial chance of negotiations that may or may not take place with Iran in the future, I will make my decision whether or not to go within the next two weeks," U.S. President Donald Trump said, according to a statement read out on Thursday by White House Spokesperson Karoline Leavitt.

Following a Thursday meeting with U.S. Secretary of State Marco Rubio and special envoy for the Middle East Steve Witkoff, U.K. Foreign Minister David Lammy said the three "discussed how a deal could avoid a deepening conflict" and that "a window now exists within the next two weeks to achieve a diplomatic solution."

"There is no room for negotiations with the U.S. until Israeli aggression stops," Iranian Foreign Minister Abbas Araghchi, who is expected to attend talks in Geneva, was quoted as saying on Iranian state TV on Friday, according to Reuters.

Trump's aversion to Iran's nuclear program has been a central point of his statesmanship across both mandates. The White House leader pulled the U.S. out of the Joint Comprehensive Plan of Action (JCPOA) during his first presidency, tightening the noose on Iran's coffers through a string of stringent financial and oil-linked sanctions.

Self-proclaimed 'peacemaker' Trump has so far fruitlessly pursued a second nuclear program deal since the start of his second term, initially expressing a preference for a diplomatic breakthrough — the likes of which European officials are now hoping to strike.

"In the United States, [there are] many political officials who are convinced that we must not once more make the errors of the past. What we saw in Libya, what we saw in Afghanistan, what we saw in Iraq, we do not want to see reproduced," French Foreign Minister Jean-Noël Barrot said in a TV interview with French media, according to a CNBC translation.

Notably, the U.K., France and Germany — alongside Iran's allies Russia and China — were previously involved in the JCPOA with Washington and Tehran.

Markets have been rattled by the possibility of the conflict destabilizing the wider oil-rich Middle East and potentially drawing in the world's largest economy, spurring investors on a flight to safe-haven assets and broader focus on defense companies and initiatives.

Source: CNBC