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Lagarde's Trump Warning Paves Way for EU Capital Markets Drive – Financial Post

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Engulfed in a prolonged economic slowdown and facing the prospect of Donald Trump returning to the White House, the European Union is dusting off a plan to unite its disparate capital markets.

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(Bloomberg) — Engulfed in a prolonged economic slowdown and facing the prospect of Donald Trump returning to the White House, the European Union is dusting off a plan to unite its disparate capital markets.

The so-called Capital Markets Union, or CMU, has long been on the to-do list for officials trying to deepen the EU’s single market and secure stronger investment and economic growth. But the project, launched nearly a decade ago, has repeatedly stumbled over national interests or been eclipsed by more urgent work responding to crises such as the Covid pandemic.

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There is now a growing drumbeat of calls to get back on track to attract private money to help fund investments in the climate transition and spur an economy that’s losing momentum. Officials also have to negotiate European Parliament elections in June, which risk seeing breakthroughs for parties that traditionally oppose greater integration. 

Adding to the sense of urgency, European Central Bank President Christine Lagarde last month cited the single market and CMU as the best way to bullet-proof Europe’s economy with the prospect of economic disruption from another Trump presidency in the US.

In a draft statement on CMU seen by Bloomberg, EU finance ministers said: “If the development of European capital markets is not addressed urgently, Europe is at risk of falling behind globally in terms of competitiveness, growth, and prosperity of its citizens.” 

The latest wish list of reforms, which will be discussed at an informal meeting of EU finance officials next week, focuses on the architecture of capital flows around Europe, boosting funding for businesses, and improving access to savings and retirement products for individuals.

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The benefits of getting it right could be big. 

“CMU could boost cross-border private risk-sharing, reduce reliance on bank financing and enhance capital allocation efficiency, promoting higher economic growth and euro-zone integration,” Allianz economists led by Ludovic Subran wrote in a recent report. “To restore its overall competitive edge against the US, the next European Parliament urgently needs to tackle the obstacles to higher productivity growth.”

Even as momentum builds to take action, it’s unlikely a deeper union could deliver a quick fix for the region’s economic woes. Growth in the 20-nation euro zone will accelerate only slightly to 0.8% this year from 0.5% in 2023, according to the latest projections by the European Commission, the EU’s executive arm.

One of the key ideas, championed by Lagarde, is to create a European version of the Securities and Exchange Commission to overcome a patchwork of regulatory frameworks. Another aim to drive CMU is to provide greater choice of funding for companies, so they aren’t forced to tap foreign markets such as the US.

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Other officials, including Bundesbank President Joachim Nagel, have joined the rallying call for CMU in recent days. Addressing the Munich European Conference on Thursday, he said it would make the ECB’s job easier by equalizing the impact of policy in different countries, as well as strengthening growth and investment.

“The banking and capital markets union is another area where we are still a long way off from achieving complete integration,” Nagel added.

ECB Executive Board member Isabel Schnabel said more integrated capital markets could improve European tech’s access to funding, which has disadvantaged firms in the past.

“Our financial markets also remain segmented along national borders,” she said in a speech in Italy on Friday. “Financial integration in the euro area has not increased from where it stood in the early years of monetary union.”

Ahead of the meeting of European central bankers and finance ministers in Ghent, Belgium next week, others have been more alarmist about the challenges.

Germany’s finance minister, Christian Lindner, has described the prospect of growth in his country this year of just 0.2% as “downright embarrassing,” arguing that continued inertia will come at a price. He acknowledged that private capital markets will have to participate in a greater proportion than until now to stem the energy transition.

—With assistance from Jorge Valero and Mark Schroers.

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A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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