Moscow’s Trust bank has become the first financial casualty of Russia’s currency crisis after the country’s central bank threw it a $530m (£340m) lifeline to prevent it going bankrupt.

Trust, which uses the Hollywood star Bruce Willis to advertise its credit cards, ran into trouble after its policy of offering attractive savings rates and consumer loans fell foul of Russia’s economic slowdown.  The country’s central bank said it was providing up to 30bn rubles to help the medium-sized bank in what is thought likely to be the first of a series of bailouts made necessary by the near-halving of the global price of oil and the sharp fall in the value of the ruble.

Last Friday, Russian MPs rushed through a bill authorizing a 1tn-rouble recapitalization of the country’s banks, which have suffered big losses as a result the currency crisis.

The central bank’s Deposit Insurance Agency will be responsible for supervising Trust under a temporary arrangement until a new investor, likely to be one of Russia’s leading banks, is chosen as a white knight.  Trust’s problems echo those of Northern Rock, the first bank to get into trouble in the UK when the global financial crisis broke in the summer of 2007. Like Northern Rock, the Russian bank had been offering loans on easy terms and annual rates of interest in excess of 20% on ruble accounts.  Its difficulties have been made worse by western sanctions, which have made it impossible for Russian banks to get funding from overseas financial markets and left them dependent on domestic investors.  The announcement from the central bank came as a steadier oil price eased the pressure on Russia’s currency. Brent crude was trading at $61.14 after losing early gains on the commodity markets, and the ruble was up 5% against the dollar at 55.2.

Emerging markets’ analysts at Capital Economics said in a briefing note: “The Russian ruble has stabilized in recent days, but only after the central bank introduced a raft of measures to limit ruble liquidity – including a massive hike in interest rates – and, perhaps more importantly, oil prices started to edge up. The effects of the collapse in the currency on the real economy will be felt in the first half of 2015.  “Inflation looks set to jump, perhaps to 20%, and real incomes will contract. Meanwhile, although the ruble has stabilized over the past few days, interbank interest rates have spiked to levels that have typically preceded a credit crunch in the wider economy. All told, we think that GDP will shrink by 5% next year.”  James Butterfill, a global equity strategist at Coutts, said: “While the economic situation is serious, Russian equities look oversold – the MSCI Russia index is now trading at 0.4 times its book value – a 70% discount to emerging markets as a whole and a more bearish position than even the low of 0.6 times during the credit crisis. To find anything cheaper, you would have to go back to the 1998 crisis triggered by the collapse of hedge fund Long Term Capital Management, when Russia’s equity market traded at 0.2 times book value.”

The number of people seeking work in France has risen to a record high, official figures show. The jobless total rose by 27,400 in November to 3,488,300 - the highest level yet seen.  That means the number looking for a job has risen by 5.8% in the past year.  The claimant count rose in November for the third month in a row, and official government estimates suggest the economy will have grown by just 0.4% this past year.  The jobless figures count the number of people claiming benefits and looking for work with the National Agency for Unemployment.  The alternative international measure of unemployment, devised by the International Labour Organization and based on a regular survey, says that unemployment in France rose to 2.84 million in the third quarter of the year, giving an unemployment rate of 9.9%.  President Francois Hollande, elected in 2012, made the creation of more jobs a key feature of his election campaign.  He recently stated that if he failed in this aim, he would not stand again in the 2017 presidential elections.  The latest attempt to rouse the economy from stagnation and to create more jobs was announced earlier in December. The French Prime Minister, Manuel Valls, and the Economy Minister, Emmanuel Macron, outlined plans that included increasing the number of businesses operating on Sundays, and opening up regulated sectors, such as certain professions, to competition. It is not obvious this strategy would succeed in reviving the economy, even if implemented fully. The deregulation plan produced immediate protests by thousands of people in Paris and faces opposition from within the ruling Socialist Party.

The US economy grew at its fastest pace in 11 years in the third quarter, in the strongest sign yet that the world's biggest economy has shifted into higher gear.

The Commerce Department on Tuesday revised up its estimate of GDP growth to a 5pc annual pace from the 3.9pc rate reported last month, citing stronger consumer and business spending than it had previously factored in.  It was the fastest growth pace since the third quarter of 2003. GDP growth has now been revised up by a total of 1.5 percentage points since the first estimate was published in October.  The news sent the Dow Jones Industrial Average above 18,000 for the first time as it climbed as high as 18051.05.  Big revisions to GDP data are not unusual as the government does not have full information when it makes its initial estimates. 

The economy expanded at a 4.6pc rate in the second quarter. It has now experienced the two strongest back-to-back quarters of growth since 2003. Economists polled by Reuters had expected growth would be raised to a 4.3pc pace.

While the pace of growth likely slowed in the fourth quarter, a rapidly strengthening labor market and lower gasoline prices should provide the economy with sufficient momentum in 2015 and keep the Federal Reserve on course to start raising interest rates by the middle of next year.

Fatness "can constitute a disability" for the purposes of European Union equality at work legislation, Europe's highest court has ruled.  The judgment means British companies will be required to treat obese workers as "disabled", providing them with larger seats, special parking spaces and other facilities.  “Obesity can constitute a ‘disability’ within the meaning of the Employment Equality Directive,” the European Court of Justice ruled. “While no general principle of EU law prohibits, in itself, discrimination on grounds of obesity, that condition falls within the concept of ‘disability’ where, under particular conditions, it hinders the full and effective participation of the person concerned in professional life on an equal basis with other workers.”  The EU court ruling, which is binding on British employers, follows a case brought by Karsten Kaltoft, a Danish childminder, who claimed he was sacked by his local authority employer because he was so overweight. ... Important to the ruling, is the EU court’s judgement that the origin of the disability is irrelevant even if someone's gross obesity is caused by overeating or gluttony.  “The concept of ‘disability’ within the meaning of the directive must be understood as referring to a limitation which results in particular from long-term physical, mental or psychological impairments which may hinder the full and effective participation of the person concerned in professional life on an equal basis with other workers,” said the court  “The directive has the object of implementing equal treatment and aims in particular to enable a person with a disability to have access to or participate in employment. In addition, it would run counter to the aim of the directive if its application was dependent on the origin of the disability.”  “This test could mean that businesses face claims from obese staff for failing to make reasonable adjustments to their role if the job entails tasks where they would be on an unequal footing with other staff – tasks that require full mobility such as stacking shelves in a supermarket for example." "Employers will need to consider whether they make any adjustments for obese staff to protect themselves from discrimination claims, but they also need to consider whether doing so could trigger employee relation issues and related claims from other members of staff who feel that their obese colleague is ‘getting away’ with doing less work or ‘avoiding’ manual tasks – and that they are doing more of this work as a result.” Vanessa Di Cuffa, employment law partner at Shakespeares, welcomed the judgement.  “It is right that the EU has moved forward with enshrining this into law,” she said.  “This is the right decision. Although previous legislation allowed for employees to be protected against other forms of discrimination, it is positive that obesity is now being seriously recognised.”  The EU court declined to define what level of Body Mass Index (BMI), the measure used to calculate the degree of obesity in an individual, would be required to class soemone as disabled, ruling that decisions would be made on a case by case basis.

Russia says it will not "cave in" to pressure, following a fresh set of US, EU and Canadian sanctions over the conflict in Ukraine.  A spokesman said Moscow regretted "that the West is yet again displaying a complete lack of interest" in resolving the crisis in south-east Ukraine.  Russia was developing "retaliatory measures", the spokesman said.  The US sanctions focused on Crimea, which was annexed by Russia in March.  US President Barack Obama signed an executive order to ban the export of goods, technology and services to Crimea, in addition to new sanctions on Russian and Ukrainian individuals and companies. Mr Obama said the move showed the US would never accept Russia's annexation of Crimea.  Similar measures agreed by the European Union earlier this week came into effect on Saturday. Canada announced its own sanctions on Crimea on Friday.  After the peninsula was annexed, pro-Russian separatists took control of parts of the Donetsk and Luhansk regions of eastern Ukraine in April, and later declared independence.  Some 4,700 people have died and another million have been displaced by fighting in recent months.  On Friday, five Ukrainian soldiers were killed in fighting - the highest death toll since the latest attempt at a ceasefire began on 9 December.  In addition to the goods, technology and services ban, US individuals or companies cannot now buy any real estate or businesses in Crimea or fund Crimean firms.

Demonstrators gathered in Brussels to rally againist painful austerity measures and the upcoming TTIP trade deal. Protestors managed to shut down one of the European capital's busiest districts. Tractors rolled into central Brussels Friday as more than a thousand people protested European Union economic policy and a planned free trade deal with the United States. The demonstrations brought together farmers, trade unionists and environmentalists, who burned bales of hay and an effigy of German Chancellor Angela Merkel, long considered the driving force behind Europe's policy of reducing social programs in order to curb government debt. The protest was meant to coincide with the final day of the EU year-end summit, but the talks between European leaders wrapped up a day early. The police cordoned off the whole of Brussels' EU quarter, causing early morning chaos in one of the city's busiest districts.

Turning people in merchandise - "Merry Christmas and Happy Austerity," read one banner the protestors hung outside the European Council building. The D19-20 Alliance, which organized the demonstration, represents not only Belgian organizations but French, Dutch, and German ones as well. People came from all four countries to voice their outrage at "policies that do not work and keep accentuating inequalities," one of the organizers told German news service dpa.
The D19-20 Alliance denounces austerity as a means by which the government makes workers pay for the financial crisis and allows for a roll-back of important social programs forged over generations, like free medical care. The Alliance is worried that the upcoming Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement between the EU and the US, will increase these inequalities and give American businesses too much power over European governments to the detriment of their citizens. Rudy Janssens, a senior official with Belgian socialist union CGSP, said the TTIP will turn people into "merchandise” and medical patients into customers.
At the summit, EU leaders reaffirmed their commitment to signing the TTIP by the end of 2015, ushering in the largest free trade agreement in the world.
es/tj (AFP, dpa)