'Blood on your hands' if world steps back on tackling Covid-19 now — WHO official


23 September 2022

BY JENNIFER RIGBY

In an interview, WHO senior adviser Bruce Aylward warned that richer nations must not step back from tackling Covid-19 as a global problem now, ahead of future potential waves of infection.

Image: 123RF/Sasirin Pamai

If rich nations think the pandemic is over, they should help lower-income countries reach that point too, a senior World Health Organisation official told Reuters.

In an interview, WHO senior adviser Bruce Aylward warned that richer nations must not step back from tackling Covid-19 as a global problem now, ahead of future potential waves of infection.

In the last few weeks, WHO Director General Tedros Adhanom Ghebreyesus said the end of the pandemic was in sight, and US President Joe Biden said the pandemic was over.

“When I hear them say, 'Well, we're so comfortable here,' it's like, 'Great, now you can really help us get the rest of the world done',” said Aylward.

Aylward said that the group he co-ordinates, which focuses on equitable access to Covid-19 vaccines, treatments and tests worldwide, is not yet ready to move out of the emergency phase of tackling the pandemic and that countries need to be ready and have treatments in place for any further waves of infection.

“If you go to sleep right now and this wave hits us in three months... God — blood on your hands,” he said.

He also stressed that Biden had a point domestically as the US has good access to all Covid-19 tools. It has also not cut its global commitment to fighting Covid-19, he added.

Aylward co-ordinates the ACT-Accelerator, a partnership between WHO and other global health bodies to help poorer countries access Covid-19 tools. The effort, which includes the vaccine-focused Covax, has reached billions of people worldwide but has faced criticism for not acting quickly enough. There had been some speculation that the effort may wind up this autumn, but Aylward said it was simply changing its focus as the pandemic changes.

Over the next six months, the partnership will aim particularly at delivering vaccines to the roughly one quarter of the world's healthcare workers and elderly who have still not had a shot, as well as on improving access to test-and-treat, particularly with Pfizer's Paxlovid, he said.

It will also look to the future as Covid-19 is “here to stay”, and unless systems are put in place, support will collapse once other industrialised nations also think the pandemic is over, said Aylward.

The initiative already has an $11 billion gap in its budget, with most of its available $5.7 billion in funding pledged towards vaccines rather than tests or treatments.

Reuters

CDC: 32% of Americans Should Be Masking or Considering It

The percentage has been on the decline for about two months, but COVID-19 transmission levels remain high across most of the country.

By Cecelia Smith-Schoenwalder
Sept. 23, 2022, 

Pictured is the entrance to the Centers for Disease Control 

and Prevention as seen on April 19, 2022, in Atlanta, GA.

RON HARRIS/AP PHOTO

More than 32% of Americans should be wearing masks while indoors in public spaces or considering the measure based on their risk for severe COVID-19, according to the Centers for Disease Control and Prevention.

That percentage is down considerably from roughly two months ago, when 87% of Americans lived in counties considered a high or medium COVID-19 community level, according to CDC data.

According to the agency, people living in those areas should consider mitigation measures to protect themselves and others, like masking. The percentage has been on the decline for weeks as coronavirus cases, deaths and hospitalization fall.

Coronavirus cases in the U.S. have been declining since its most recent peak in July at 130,000 new infections each day on average. Now the U.S. is averaging fewer than 55,000 new cases each day, according to CDC data. COVID-19 transmission levels, however, remain high across the majority of the country.

Deaths have fallen slightly but remain elevated at nearly 350 per day. That’s down from 500 a day in August.

But it still equates to nearly 2,500 deaths per week – a number that experts agree is too high.

In fact, the number of COVID-19 deaths still occurring was a sticking point for many who criticized President Joe Biden’s remarks that the “pandemic is over.”

Leading infectious disease expert Anthony Fauci said this week that the number of deaths is “not an acceptable number as far as I'm concerned, we've gotta get it down much, much lower.”

But Biden administration officials sidestepped questions about whether Biden’s statement was incorrect, instead noting that the U.S. is in a different phase.

"I think if we look at the big picture, things are very different," CDC Director Rochelle Walensky said when asked about Biden’s comments. "We're in a different place. Schools are open and businesses are open. We have a lot of population immunity out there right now."

The World Health Organization, on the other hand, did not mince words.

“At our media briefings over the past two weeks, I have said that the pandemic is not over, but the end is in sight,” said WHO Director-General Tedros Adhanom Ghebreyesus on Thursday.

'Bro, How Do I Fix This?': Home Depot Workers Form Independent Union


September 21, 2022 / Jonah Furman

LABOR NOTES



Home Depot has raked in record-breaking profits, while its workers worry about paying bills and making rent. Photo: Flickr user JJBers, CC BY 2.0.

On September 19, workers filed a petition to organize a union among 276 workers at a Home Depot in northeast Philadelphia. If successful, the independent union would be the first at the home repair chain, the fifth-largest private employer in the U.S with 500,000 employees.

Vince Quiles, who’s worked at the store for five years, says the union effort gathered over 100 signatures for an election in just five weeks.

At the beginning of the pandemic, Quiles was promoted to supervisor in the plumbing department. Plumbing is the highest-volume section of the store, with around 6,000 sales per day, but the company did little to prepare him. “No training, no staff,” says Quiles. “They said, ‘You’re good with people, go figure it out.’”

Quiles ended up running the department so well that he was eventually offered a promotion to be put on a management track. He turned it down. “If I move up I’m basically just going to be f***ing over the people that I’m cool with, that I go to work with every day, who talk to me about their families,” says Quiles. “And I’m supposed to look these people in the eye when they ask for a raise and say the company can’t afford it.”

RECORD EARNINGS

Home Depot can afford it, as Quiles knows. On his break time, Quiles would research the company’s finances, and can recite by heart his own store’s profits. “The store made $30,170,052 in profit last year. Their target was $26,754,634 dollars. Which left them over their plan by $3,415,418 dollars.”

Home Depot, which has 2,317 stores in the U.S., Canada, and Mexico, has raked in record-breaking profits during the pandemic, fueled by a surge of homeowners seeking to improve their properties. With demand rising, the company raised its prices. Higher prices drove down transactions among lower-income customers, but higher-income customers more than made up for the loss. “In the second quarter [of 2022], we delivered the highest quarterly sales and earnings in our company’s history,” CEO Ted Decker recently announced.

Quiles began asking why the company couldn’t pay its workers more. Last year, Home Depot made $16 billion in profit. In a meeting with a regional vice president, Quiles questioned why the company couldn’t pay premiums for operating machinery like forklifts, or for translating for Spanish-language customers, or for working in multiple departments. The regional manager touted that the company had spent a billion dollars on employee compensation. “You spent one billion dollars over 500,000 employees,” Quiles remembers saying, “and $15 billion dollars in stock buybacks”—not to mention $7 billion more on investor dividends.

‘BRO, HOW DO I FIX THIS?’

Meanwhile, workers at the Home Depot in Philadelphia routinely worry about paying bills, having enough food for both their kids and themselves, or paying rent. The starting wage at the store is around $14.50. The Walmart they share a shopping center with pays more.

All of this has meant workers leaving. With uncompetitive pay, crushing customer volume, and little to no training, it was hard to retain new employees. One day, Quiles recalls, he ran into a new associate, Aaron, working in the plumbing department. He tried to train him, but kept getting pulled to other assignments or questions. Customers would come up showing pictures of complicated plumbing repairs and asking for solutions, which staff couldn’t answer.

“I can’t tell you how many pictures I would see, like, ‘Bro how do I fix this?’” recalls Quiles. “I would have so many people get mad saying, ‘If you don’t know this, why do you work in the plumbing department?’ I was like, ‘If I knew this shit, I would be a plumber, not making $19.25 an hour as a supervisor.’” Within two months, Aaron, the new associate, making $14.50 an hour, overwhelmed by the volume of the job, and with no meaningful training, had quit.

INSPIRATION FROM ALU

Having taken his concerns up the corporate chain, Quiles decided change wasn’t going to come voluntarily from management. So he started doing more research.

Quiles watched the Amazon union drive in Staten Island, and became fascinated with Chris Smalls’s path. It wasn’t dissimilar; Smalls had also been promoted within Amazon, started voicing concerns and complaints, and found himself being stonewalled by management. And the scale of the Amazon Labor Union’s victory in Staten Island gave Quiles hope: “If Chris Smalls could do that at a warehouse of over 8,000 people, we can do it in our store of 300.”

So he called the NLRB to learn more about the process, watched interviews with Smalls about how he did it, and started having conversations with people about their jobs. “I would say ‘How do you feel about working here? How do you feel about working conditions and compensation? I’m not part of management.’ They would give me their raw, emotional experience.”

In just five weeks, he and a few co-workers collected over 100 signatures, and submitted them to the Board.

‘WE FILED FOR A UNION, NOW YOU CARE?’

About a month ago, Home Depot management caught wind of the effort. They posted flyers around the store that said, “You Ask, We Listen,” and sent out employee surveys to address concerns. They talked about designating employee-only restrooms, and setting up port-a-potties outside for customers. But they wouldn’t talk about the core issues workers were organizing around.

“You’re talking about an employee bathroom, you’re not talking about why people won’t stay. You can’t go and give a chess player only five pawns and you won’t have a knight, a bishop, or a rook, and say, ‘Go win the game.’”

White-collar management was flown into the store to hold captive audience meetings and one-on-one conversations with employees about how little a union could do for them. The store manager was switched out overnight. But Quiles thinks the move is backfiring. “Now it’s funny, corporate’s walking around the store and talking to people,” says Quiles, “and they think they’re doing something, but it’s backfiring. People are like ‘Oh, we filed for a union, now you care?’”

A version of this article was originally published at More Perfect Union.

A Meloni election win could shift Europe's balance of power


Italy's centre-right coalition closing campaign rally in Rome

Fri, September 23, 2022 
By Michel Rose, Andreas Rinke and Krisztina Than

PARIS/BERLIN/BUDAPEST (Reuters) - The European Union's powerhouses will have to tread carefully around Giorgia Meloni if the nationalist candidate's coalition wins Italy's election on Sunday, or risk pushing Rome towards Hungary and Poland, European officials said.

At play is the balance of power inside the EU as it contends with the fallout from Russia's war on Europe's eastern flank and the continent's worst energy and cost-of-living crises in decades.

If Meloni wins, Sunday's election will hand Italy its most right-wing government since World War Two. Although she has played down her far-right past, cracks in her coalition over foreign policy have emerged.

Underscoring challenges ahead for Meloni and Europe, former Italian Prime Minister Silvio Berlusconi, whose Forza Italia party belongs to Meloni's coalition, said Russia had been "pushed" into the war on Ukraine. His comments are likely to concern Western allies.

"All eyes are on Rome right now," one EU official told Reuters.

After a victory for Sweden's nationalists, there is concern in Brussels, Paris and Berlin of a "populist front" forming that could block EU decision-making as it seeks to stave off recession and shield households from inflation.

Mario Draghi, Italy's outgoing prime minister and a former president of the European Central Bank, raised Italy's profile and credibility on the European stage, espousing the deeper integration sought by French President Emmanuel Macron.

Meloni's intentions are less clear. She presents her Brothers of Italy party as a mainstream conservative force removed from its post-fascism roots, but some Europhiles are skeptical.

"It is worrying that a founding member of the EU is in such a situation. It is a threat to the EU and to Italy," said Rolf Müntzenich, a lawmaker in German Chancellor Olaf Scholz's Social Democrats party.

German magazine Stern plastered its front page with a picture of Meloni under the banner: "the most dangerous woman in Europe".

Macron has privately told EU officials he is concerned about a Meloni victory, according to sources aware of the conversations. When asked in public, Macron expresses optimism about relations with Italy.

NEW ALLY

Hungary and Poland have tested Europe's democratic standards.

Supporters of Hungary's nationalist Prime Minister Viktor Orban see in Meloni an opportunity for Budapest to gain a new ally in its battle with the EU executive.

"Orban will probably be able to count on the support of Italy in rule-of-law disputes in the EU," said Zoltan Kiszelly, an analyst at the pro-Hungarian government think tank Szazadveg.

In Warsaw, where the ultra-conservative government often sides with Orban, officials are also sanguine.

"Right-wing parties are gaining more support than ever before," said Zdzislaw Krasnodebskia, a lawmaker from Poland's ruling Law and Justice party. "This is a chance to correct European policy."

Rome-born Meloni has a history of euroscepticism and shares Orban's anti-immigration views and the promotion of traditional family values.

However she has pledged prudent fiscal policies and to maintain unity with European Union and NATO partners in supporting Ukraine against Russia.

She has also sought to reassure would-be EU partners about her intentions in a video in French, English and Spanish.

"I have read that a victory for Brothers of Italy in September would be a disaster, would amount to an authoritarian turn, would mean Italy will leave the euro, and other nonsense. None of that is true," she said.

Meloni is in direct contact with Draghi and the Italian establishment to smooth over the transition of power and ensure Italy does not spiral into crisis at a time of economic volatility, European officials and analysts said.

This was "to make her understand how important some issues are and that she can't mess up," said Marc Lazar, an Italy specialist with Paris-based think tank Institut Montaigne.

'SKY IS FALLING NARRATIVE'

In Brussels, officials are unsure how Meloni will handle Italy's part of the European recovery plan, which is meant to unlock 192 billion euros in return for domestic reforms.

There is also concern over Italy's debt pile, with Italian interest rates rising more rapidly than their euro zone peers.

Macron is expected to hold talks with Scholz on how to deal with Italy in the coming days, a French government source said.

Paris has been warned by Italian officials from the outgoing administration not to seek public confrontation with Meloni to prevent pushing her into a corner where she might sense little choice but to deepen ties with Orban.

"What the Italians I talked to in Rome said to me was: don't throw her into Hungary's arms," a French government source told Reuters.

Macron would refrain from the combative rhetoric he aimed at Matteo Salvini, another hard-right coalition partner of Meloni, during the 2019 European election campaign, which he framed as an existential fight between 'nationalists' and 'progressives', a second French official said.

Pablo Simón, professor of political science at Carlos III University in Madrid, said a Meloni win might energise far-right parties elsewhere as spiralling consumer prices hurt households.

In Washington, however, White House officials played down concerns.

"This kind of 'sky is falling' narrative out there about the Italian election doesn't square with our expectations," one U.S. official said.

(Reporting by Michel Rose, Andreas Rinke in Berlin and Krisztine Than in Budapest; additional reporting by Belen Carreno in Madrid, Jan Lopatka in Prague, Heather Timmons in Washington, Crispian Balmer in Rome and Agnieszka Pikulicka-Wilczewska in Warsaw; editing by Richard Lough and Angus MacSwan)

Why is Italy swerving far right? Many feel they have no choice.


Dominique Soguel
Fri, September 23, 2022 

As young female protesters wrapped in rainbow flags demonstrate at a Brothers of Italy campaign rally in Milan, party leader Giorgia Meloni pokes fun at them from the stage.

STANDARD RIGHT WING TROPE; LIBERALS ARE RICH ELITISTS
“They finished their holidays, got off dad’s yacht, and came here,” she says, as security tries to keep party supporters’ tempers from flaring, particularly after the women call them fascists.

Jokes are par for the course as Ms. Meloni crisscrosses Italy to whip up support for her party ahead of elections on Sunday, Sept. 25. The far-right politician looks likely to become Italy’s first female prime minister, as the country is gripped by political and economic upheaval. She has waged a slick communication campaign, using speeches peppered with anecdotes to suit each region. Her messages have something for everyone: fiscal relief, youth employment, secure borders, products and children made by Italians in Italy, regaining some sovereignty from the European Union, and turning Italy into a renewable energy hub.

But Ms. Meloni’s rise to the top of the polls has alarmed many, due to her xenophobic rhetoric, her and her party’s connections to Italy’s fascist past, and the track record of the Brothers of Italy while governing in Italy’s Marche region. Though her campaign has genuine appeal for some Italians, for others she is simply the option untried. After years of center-left, center-right, and populist governments, Ms. Meloni and the Brothers of Italy are “fresh faces” – and that may well be their biggest asset.

“Meloni will get many votes because others have lost their credibility,” says Giancarlo M., a retired fish market worker who likes her emphasis on Italy’s potential as a renewable energy hub. “She has worked for those in despair, and won over the disillusioned.” Like many Italians, he declined to give his full name to the media.

“Christianity, being Italian, and being a mother”

Sunday’s snap elections were triggered by the resignation of Prime Minister Mario Draghi and the collapse of his broad government coalition, which the Brothers of Italy were not part of. But the party rose in popularity partly at the expense of two parties that were in the coalition: the center-right Forza Italia, the party of outlandish octogenarian and former prime minister Silvio Berlusconi, and the hard-right League party of Matteo Salvini, an ex-interior minister. Both Forza Italia and the League are expected to join the Brothers of Italy in the next government as junior partners.

Ms. Meloni and her party have a history further to the right of either of their conservative rivals. In her youth, she was a member of the Italian Social Movement (MSI), which was founded by the heirs of Benito Mussolini. The Brothers of Italy also use iconography tied to the MSI. But Ms. Meloni rejects the “fascist” label, saying fascism has been confined to history.

Her supporters echo those sentiments. “Brothers of Italy is on the right, but it is not the extreme right,” says Paola Marrone, a Milan-based lawyer who takes pride in always voting for the party, even when it barely secured 2% of the vote.

Ms. Marrone considers herself completely in sync with Ms. Meloni’s social and economic views, although on the international front she is less on board with Ms. Meloni’s support for Ukraine. Euroskeptical parties like Brothers of Italy tend to have better ties with Moscow. “[Ms. Meloni] has an eye out for Italians,” says Ms. Marrone. “We are invaded by immigrants. The plus that Meloni has is that she is coherent, concrete, and credible in her proposals.”

Indeed, when addressing the crowd in Milan, Ms. Meloni gets the loudest applause for her take on family demographics and migration. Italy has the third oldest population in the world, and deaths far outweigh births. It is also a steppingstone for Europe-bound migrants.

“This is not a demographic winter,” she declares. “Gentlemen, it’s an ice age. It is clear this nation is going to disappear, and I don’t want this nation to disappear. I don’t think the demographic problem can be solved by bringing in immigrants, as the left says. ... I want a nation that says, ‘When you make a son, you are doing me a courtesy. Not only will I pay you for it, I will thank you for it.’”

Although she has moderated her language, especially in speeches geared for the European audience, Ms. Meloni’s mantra – “I am Giorgia, I am a woman, I am a mother, I am Italian, I am Christian” – neatly sums up her message. “These are the main values that Giorgia Meloni is calling for and speaking to: Christianity, being Italian, and being a mother,” says Mariana Griffinni, lecturer in the Department of European and International Studies at King’s College London.

“They are against freedom of choice”

Sitting in the shadow of the Church of St. Domenico at the Piazza del Plebiscito in Ancona, representatives of a local feminist network say the Brothers of Italy could mean a retreat for women’s rights in Italy. They have seen it happen, they say, because the region of Marche where they live is one of two where Brothers of Italy won regional elections in 2020, after decades of being governed by the center-left.

Abortion has been legal in Italy since 1978, but women in Marche are struggling to access the procedure and often need to travel to other regions to get it. That’s because Marche has one of the country’s highest percentages of so-called conscientious objectors, or doctors who refuse to perform abortions. And Marche also refuses to implement updated health ministry guidelines that extended women’s right to access the abortion pill to nine weeks of pregnancy, rather than seven. That’s a problem, the women say, due to huge waiting lists and a provision for a seven-day waiting period before a woman can get an abortion.

“Brothers of Italy mask themselves as pro-life but really they are against freedom of choice,” says Manuela Bartolucci, a former obstetrician. “They worry that if Italian women abort, the ethnic composition of Italy will change. They present abortion as a cause for low-birth rate and link it to demographic fears ... that immigrants are giving birth to many children and these people will replace Italians.”

She also points out that the party voted against civil unions in Italy and opposed giving anti-discrimination protections to the LGBTQ community. “[Brothers of Italy] want women to come back to the role of wives and homemakers,” adds her friend Dolores Rossetti, who volunteers at a center for domestic violence survivors. “Being rewarded for having more children is a fascist idea.”

Giussepe Rizzi, president of the Catholic faith and education association Azione Cattolica Arcidiocesi Ancona-Osimo, notes abortion is a polarizing issue, especially among staunchly Catholic Italians. “Abortion, like euthanasia, is a topic relating to life that is very delicate,” Mr. Rizzi said in a phone interview. “The Christian community is very divided. ... Performing an abortion is not the same as operating appendicitis. It can be correct for a doctor to refuse to perform an abortion.”

The LGBTQ community is also concerned about a Ms. Meloni victory. Activist Giacomo Galeotti notes Marche held a Pride parade in 2019 with the support of regional authorities. That backing ended with Brothers of Italy. “It’s really clear the vision Giorgia Meloni has on LGBT+ rights,” says Mr. Galeotti.

 “She is against it.”

The regional government of Marche declined a request for in-person interviews or to answer questions via email.

“There are no alternatives left”

The fish market of Ancona springs to life well before the rest of the city. Large and small vessels slip out into the Adriatic after midnight and return in waves before 5 a.m. Hundreds of boxes filled with the catch of the day are presented for the assessment of potential buyers. Numbers on a digital blackboard announce the price of clams, shrimp, sole – values rising and falling in the search of a deal.

Ms. Meloni’s promises of fiscal relief and financial help for families have hooked several fishers and retirees lingering for coffee at the port. They say the prohibitive price of fuel has forced them to cut down the number of days they spend at sea from four to two. Her emphasis on Italian sovereignty also resonates. EU funding may mean the port is getting new cash registers and a restaurant, but Brussels’ crackdown on plastic and overfishing has made a bigger, negative impression.

“For me it was a mistake to enter the EU,” says Roberto, upset over restrictions on the amount of clams boats can catch: 400 kilograms (880 pounds) per vessel. “The EU makes rules for everyone, but you can’t apply the same fishing norms in Germany and Holland to the Adriatic Sea. It is not the same thing. Everyone has different product. You can’t put a cap on fishing. If the market demands more, then we need to go get the fish from somewhere else.”

Others like Ms. Meloni’s tough talk on migrants. Andrea Amici, another fisher, calls migrants “disgusting stuff” who would best be avoided.

“Meloni will have a lot of support because there are no alternatives left,” Mr. Amici says. He sees legislative efforts to criminalize discrimination against the LGBTQ community and legalize cannabis as prime examples of what he considers senseless laws supported by the left. “There are bigger issues than this with Italy coming out of the pandemic and the war. The center left has governed for 40 years and delivered nothing. It only makes taxes, and things are already difficult for us.”

Paci, the aging captain of the fishing vessel Il Lupo, can’t shake off concerns over the roots of Ms. Meloni’s party. “For me, they are the heirs of fascists,” he says. “Fascists have not run the country since World War II. If they are in power now, who knows what they will do, but the thought is scary.”

Maria Michela D’Alessandro and Natasha Caragnano supported reporting for this article.

CRIMINAL CAPITALI$M

Brazil Favors Removal of Trump-Picked Bank Chief on Ethics Probe


Martha Beck and Eric Martin
Thu, September 22, 2022 

(Bloomberg) -- Brazil, the second-largest shareholder of the Inter-American Development Bank, supports the removal of the lender’s president amid an ethics probe into his role, according to a top government official from the South American nation.

The administration of President Jair Bolsonaro sees the IDB’s Mauricio Claver-Carone as being unable to continue leading the Washington-based bank after the investigation highlighted an alleged romantic relationship with a subordinate and apparent breaches of the bank’s rules, the official said, asking not to be identified because the government’s position isn’t public.

The Brazilian government, which holds an 11.4% stake in the bank and together with the US and Argentina make up almost 53% of its voting power, expects a resolution of the case soon as Claver-Carone is losing internal support, according to the person. In order for Claver-Carone to be removed, the countries seeking his ouster would need a simple majority of voting shares.

The ultimate decision would be made by the board of governors, mostly finance ministers from the governments to which the board’s executive directors report, though they are expected to back the recommendation of the executive board.

Brazil’s Economy Ministry, which oversees the relationship with the IDB, declined to comment, as did the press office of the IDB itself.

The appointment of Claver-Carone, a former Trump administration official, to lead the development bank focused on Latin America opened a rift between the US and the region in 2020. He was the first US citizen to lead an institution traditionally presided over by a Latin American since its creation in 1959.

While Brazil at the time supported his candidacy as part of a Bolsonaro-Trump agreement, the relationship between Claver-Carone and Economy Minister Paulo Guedes has been rocky, with clashes over the Brazilian representatives to the bank, the person said.

Claver-Carone was expected to address the bank’s board on Thursday to respond to the allegations in a session with the institution’s executive directors, Bloomberg News reported earlier.

Read More: Trump-Picked Latin American Bank Chief to Address Board on Probe

The former top Treasury adviser, International Monetary Fund representative and foreign-policy satellite radio host from Miami has mounted an aggressive defense to keep his job. In a statement posted Tuesday on the IDB’s website, Claver-Carone said he fully cooperated with the investigation and asserted that it “does not substantiate the false and anonymous allegations that were made against me or IDB staff in the press.”

He said the probe itself violated IDB rules because he and other IDB staff members didn’t have a chance to “review the final investigative report, respond to its conclusions, or correct inaccuracies.”

The investigation found evidence -- backed by handwriting analysis, divorce records and interviewee statements -- supporting the conclusion that the pair were in a romantic relationship prior to joining the Washington-based IDB in late 2020 “and that the relationship may have continued during their employment at the bank,” according to the Sept. 19 report prepared by law firm Davis Polk & Wardwell LLP at the direction of the IDB’s board.

The probe also found that Claver-Carone took employment action to benefit the aide, raising her salary twice in less than a year for a cumulative 46% increase to more than $400,000.

The report hasn’t been made public but has been seen by Bloomberg.

Neither Claver-Carone nor the aide fully cooperated with the probe, according to the report. Claver-Carone in interviews with Davis Polk in recent weeks denied ever having a romantic relationship with the aide, who declined to be interviewed for the investigation, according to the report. The person didn’t respond to requests for comment.

Read More: Latin America Development Bank Head Decries Personal Accusations

In comments to Bloomberg, Claver-Carone said he was interviewed by investigators for more than seven hours and responded to many of their requests for information.

He said the investigation failed to provide him with due process. “The absence of basic fairness shows this process has been purely political,” he said.

Davis Polk didn’t respond to requests for comment.

The IDB, which is strategic to US influence in Latin America, loaned $23.5 billion last year, focusing on boosting economies and offering credit lines to buy Covid-19 vaccines for a region that was one of hardest hit globally by the pandemic. Nations experienced one of the worst economic contractions in their history in 2020, with millions losing jobs or fallen into poverty.

(Updates with details of votes and investigation and Claver-Carone’s comments starting in fourth paragraph.)

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

2,600-year-old blocks of cheese found in pottery at pyramid in Egypt, archaeologists say

Photo from the Egyptian Ministry of Tourism and Antiquities

Aspen Pflughoeft

Thu, September 22, 2022

Archaeologists uncovered a collection of pottery vessels — one containing ancient cheese — at a site in Egypt.

Researchers made the discovery as they began their sixth season of excavation work at the Saqqara necropolis, Egypt’s Ministry of Tourism and Antiquities said on Sept. 10.

Outside, the pottery had Demotic writing on them, an ancient Egyptian script, the ministry said. Inside, the vessels contained blocks of white cheese, experts said.

The cheese dated back to the 26th or 27th Egyptian dynasty, archaeologists said, or about 2,600 years ago, according to the Met Museum. Researchers identified the cheese as halloumi.

Halloumi is a type of cheese from Cyprus, known for its characteristic squeak, All Recipes says. The cheese tastes “slightly tangy” and has a “salty flavor with a spongy texture,” the outlet says.

Researchers did not say what the 2,600-year-old halloumi cheese tasted or smelled like.

A similar discovery of 3,200-year-old cheese prompted discussions about eating the “world’s oldest cheese,” the Australian Broadcasting Corporation reported in 2018. Experts warned this cheese contained a potentially deadly disease, the outlet reported, citing an Analytical Chemistry study. Eating the ancient Egyptian cheese was not recommended, Insider reported in 2018.

Archaeologists found another set of vessels — still sealed — that they planned to open in the coming days, the ministry said.

The Saqqara necropolis — also spelled Sakkara or Saccara in English — is a village in Giza about 15 miles south of Cairo. Saqqara boasts Egypt’s oldest pyramid and largest archeological site, National News reported.

Past archaeological excavations at Saqqara have uncovered eight tombs, a cemetery, over 100 coffins, and hundreds of other statues of cats and ancient Egyptian gods, the ministry said.

Lula Could Clinch First-Round Election Win, Datafolha Says



Andrew Rosati
Fri, September 23, 2022 

(Bloomberg) -- Brazil’s Luiz Inacio Lula da Silva is gaining momentum in the final days of campaigning, nearing the simple majority needed to give him a first-round presidential victory on Oct. 2, a new DataFolha poll shows.

Leftist challenger Lula would take 47% of the first-round vote, up from 45% a week ago, with the increase falling inside the poll’s 2 percentage-point margin of error. Incumbent Jair Bolsonaro held steady at 33%.

A candidate needs to break the threshold of 50% of valid votes to clinch a first-round win, otherwise the front-runners square off again on Oct. 30.

Trying to undercut each other’s support, the current and former president are crisscrossing the nation and making their final pitches. There is little room to change hearts and minds. Most voters picked their candidate long ago, and just a tiny fraction, 2% of them, identify as undecided.

Lula, 76, has been helped by a tacit endorsement from his predecessor, former President Fernando Henrique Cardoso, as well as an outpouring of support from actors and musicians, who called on fans to help secure a first-round win.

Throughout the race, Bolsonaro, 67, a right-wing nationalist, and his allies have discredited major opinion polls, claiming they are in the pocket of Big Media and political foes. They say support on the street shows the president is set to win another four-year term.

Third- and fourth-placed candidates claim 13% of voting intentions and analysts are closely watching for signs of a late-race migration toward the front-runners.

Other surveys this week also show Lula trending upward and within striking distance of winning outright. The latest release from Datafolha, Brazil’s most influential polling firm, widened its sample size to increase accuracy.

Voting is mandatory in Brazil. Pulling out null and blank votes, Datafolha now shows Lula on the margin of winning 50% in the first round.

Some political observers caution that the race is likely tighter than polls suggest: Voters may be reluctant to openly state they’re backing Bolsonaro, who is known for his crass style and botched handling of the coronavirus pandemic.

In a second and final round, Lula would take 54% of the vote, while Bolsonaro would get 38%, the poll found.

Datafolha interviewed 6,754 people in person throughout the country between Sept. 20 and Sept. 22

Brazil environmentalist Silva all-in with Lula against Bolsonaro


Environmentalist and federal deputy candidate Marina Silva 

speaks during an interview with Reuters in Sao Paulo

Fri, September 23, 2022 
By Flavia Marreiro

SAO PAULO (Reuters) -Prominent Brazil environmentalist Marina Silva, who was environment minister under ex-President Luiz Inacio Lula da Silva before breaking with his party, told Reuters she is throwing her full support behind his campaign and did not rule out a role in government if he wins a third term.

Silva resigned from Lula's government in 2008, upset at his support for major infrastructure projects in the Amazon. Their reconciliation is a high-profile endorsement to shore up his center-left coalition ahead of an Oct. 2 vote.

Her support for Lula also shows how even environmentalists skeptical of his ties to Brazilian agribusiness have closed ranks behind him, in an urgent push to change policies that have sent deforestation soaring under President Jair Bolsonaro.


Silva implemented environmental policies under Lula that helped to dramatically reduce destruction of the Amazon, but she joined a chorus of green critics upset with major infrastructure projects in the rainforest like the Belo Monte hydropower dam.

Even with that mixed record, Lula strikes a dramatic contrast with Bolsonaro, who has sharply scaled back enforcement of environmental laws in the Amazon, while calling for more mining and farming on protected lands. Deforestation of Brazil's rainforest has climbed to a 15-year high on his watch.

In an interview on Thursday, Silva, a three-time presidential candidate who once drew fierce criticism from Lula's leftist Workers' Party (PT), said "zeroing" deforestation in the Amazon was entirely within reach, a goal even more ambitious than Lula's stated target of "net zero" deforestation.

While net zero deforestation allows for cutting as long as an equal area is replanted elsewhere, no cutting whatsoever would be allowed under a regime of absolute zero deforestation.

"It's perfectly possible to return to zero deforestation, reviving a plan that already worked, updating that plan, putting the budgets and teams back together, strengthening our enforcement, monitoring and management systems," said Silva, a native of the isolated, rainforest state of Acre.

Last week, Silva publicly endorsed Lula at an event where he committed to a series of policy proposals, including a national authority coordinating the government's work on climate change.

Asked if she would consider accepting such a "climate czar" role, Silva left the door open.

"This is a decision for the president of the republic," she said. "In this moment, talking about ministries before winning is exactly what we don't have to do."

Lula's campaign has not been shy about environmental initiatives they are looking to implement.

Reuters reported in August that his representatives were reaching out to Indonesia and the Democratic Republic of the Congo in a bid to present a united front of tropical rainforest nations at this year's United Nations climate talks.

His advisers have also previewed a policy of subsidizing loans to farmers who agree to meet certain targets related to sustainable agriculture practices.

Lula has built a strong lead over Bolsonaro in most polls. If neither candidate wins a majority of votes on Oct. 2, they will face off in a second-round vote on Oct. 30.

(Reporting by Flavia MarreiroWriting by Gram Slattery; Editing by Brad Haynes and Sandra Maler)

Bolsonaro Is Failing to Win Over Crucial Female Vote in Brazil


Simone Iglesias
Fri, September 23, 2022

(Bloomberg) -- President Jair Bolsonaro’s efforts to reduce his rejection among women are falling flat, posing a major obstacle to his re-election bid just nine days before Brazilians go to the polls.

The former army captain, known for his macho bravado and embrace of traditional family values, has plateaued with just 29% of the female vote, according to a widely-watched Datafolha poll published late on Thursday. His leftist challenger, Luiz Inacio Lula da Silva, saw his support among them grow to 49% in the same survey.

Women make up about 52% of the Brazilian electorate. In 2018, a slight majority of them gave Bolsonaro a vote of confidence, according to exit polls. Since then, however, their support for the conservative leader slumped as they disapproved of his government, particularly his botched handling of the pandemic and his pro-gun policies.

Advised by marketing professionals, the president has been trying to soften his rhetoric to win over female voters. It worked briefly, with Bolsonaro’s image among women improving in July after he launched his re-election bid hand-in-hand with his evangelical wife at a large televised event in Rio de Janeiro.

The so-called “first-lady effect,” which resonated more with evangelical women, has apparently run its course: Bolsonaro has remained stuck with the same level of female support since September, according to the past three Datafolha polls.

Hurting that marketing strategy was the president himself: He attacked a female journalist during a televised debate in August and made cringe-worthy comments about his sexual performance right after kissing his wife at a major campaign rally in September.

Conservative, Evangelical

At an event organized by female supporters that same month, the president defended his pro-gun policies over the landmark Maria da Penha law that punishes men more severely in cases of domestic violence.

“Do you prefer a law or a gun to protect yourselves?,” he asked at the event in the Southern state of Rio Grande do Sul, his stronghold.

Women who vote for Bolsonaro are usually Christian evangelicals who support conservative and traditional family values, and who despise the feminist agenda, said Deysi Cioccari, a political science professor with the Pontifical Catholic University of Sao Paulo.

U.S. tells Lula it plans to quickly recognize Brazil election winner, sources say


A man runs past banners with photos of presidential candidates in Rio de Janeiro

Lisandra Paraguassu and Gabriel Stargardter
Fri, September 23, 2022 

By Lisandra Paraguassu and Gabriel Stargardter

BRASILIA/RIO DE JANEIRO (Reuters) -U.S. diplomats have assured Brazil's leading presidential candidate, leftist former President Luiz Inacio Lula da Silva, that they will swiftly recognize the winner of next month's election, two sources told Reuters, seeking to avert any attempt to contest a legitimate result or sow chaos after the vote.

With just days to go until the first-round vote on Oct. 2, Lula is ahead in the polls against President Jair Bolsonaro, a far-right populist who has sought to discredit Brazil's electronic voting system. Critics fear Bolsonaro may follow the example of former U.S. President Donald Trump and refuse to accept an electoral defeat.

One of the sources, who requested anonymity to discuss the confidential talks, said that in a meeting on Wednesday, Lula asked Douglas Koneff, the top U.S. diplomat in Brazil, for a quick U.S. recognition if he does win, either in the first-round vote or in an Oct. 30 runoff.

Lula was told that Washington plans to immediately recognize the results, regardless of who wins, setting an example for other nations to follow suit and minimize the chance of a contested result, the source added.

Lula foreign policy adviser Celso Amorim heard similar assurances on Thursday when he met with a group of diplomats from Latin America and the Caribbean, the other source said. A third source said many European countries are also planning for swift recognition of Brazil's election results.

In response to a request for comment, a U.S. State Department spokesperson did not mention the Lula meeting, but said in a statement that get-togethers with presidential candidates "do not imply support for a particular individual, party, or platform." The spokesperson added that the State Department "trusts in the strength of Brazil's democratic institutions."

Still scarred by the Jan. 6, 2021, assault on the U.S. Capitol by Trump supporters, the administration of President Joe Biden has grown increasingly concerned with Bolsonaro's baseless allegations of electoral fraud, sending high-level delegations to Brasilia to urge him to commit to democratic norms.

Reuters reported in May that the U.S. Central Intelligence Agency director last year told senior Brazilian officials that Bolsonaro should stop casting doubt on the voting system.

One of the sources said that in the meeting with Koneff, Lula thanked the United States for having expressed faith in Brazil's voting system.

(Reporting by Lisandra Paraguassu and Gabriel StargardterAdditional reporting by Anthony BoadleEditing by Brad Haynes, Alistair Bell and Leslie Adler)

Lula slightly boosts lead over Bolsonaro ahead of Brazil first round -poll


Lula holds rally "Todos Juntos pelo Rio Grande do Sul"

 (All Together for Rio Grande do Sul) in Porto Alegre


Thu, September 22, 2022 

SAO PAULO (Reuters) -Brazil's presidential frontrunner Luiz Inacio Lula da Silva slightly boosted his lead over incumbent President Jair Bolsonaro to 14 percentage points in a poll published on Thursday by pollster Datafolha, less than two weeks before the Oct. 2 first-round vote.

The Datafolha survey showed Lula with 47% voter support versus 33% for Bolsonaro in the election's first round, compared with 45% and 33%, respectively, in the previous poll.

In an expected second-round run-off, Lula would garner the support of 54% of voters versus 38% for Bolsonaro, a 16 point advantage, according to the poll, the same result from a week ago.

Bolsonaro's approval rating edged up to 32%, compared to 30% one week ago; and still above the 22% he held in December, after which his popularity ticked up thanks to welfare programs and measures to tackle inflation.

His disapproval came in at 44%, according to the poll, the same result from one week ago but down from the 53% seen in December.

Datafolha conducted 6,754 in-person interviews between Sept. 20-22. The poll has a margin of error of 2 percentage points up or down.

(Reporting by Peter Frontini and Pedro Fonseca; Editing by David Alire Garcia and Christian Plumb)

Lula Has Big Petrobras Plans That Would Undo Privatization Push

Lula Win May Be Stressful, But Not Disastrous, for Petrobras

Peter Millard and Vinícius Andrade
Fri, September 23, 2022 at 9:22 AM·5 min read

(Bloomberg) -- Next week’s elections in Brazil pose a challenge to Petrobras investors. Former President Luiz Inacio Lula da Silva, the front-runner, has vowed to use the company as a vehicle for national development. Incumbent Jair Bolsonaro, who’s fighting for a come-from-behind upset, is proposing the complete opposite, with plans to privatize the state-run giant.

The contrast is a rare one in this election cycle, in which the leading candidates have offered few details about economic policies they’d pursue. It also makes Petrobras a binary case for investors: the firm is churning out dividends and share prices are already cheap compared to other oil majors, but the cash stream could also dry up and leverage could increase if Lula wins and follows through on his pledges.

“The stock is maybe one of the most complex investment cases in Brazil right now,” said Flavio Kac, a portfolio manager at ASA Investments. “A Bolsonaro win would pave the way for its potential privatization, while a new government could lead to margin pressure and lower profits.”

Petrobras shares were down 5.8% to 30.10 reais ($5.75) on Friday at 12:13 p.m. local time, after oil prices fell below $80 in the longest losing streak of the year.

What to Know About Bolsonaro-Lula Showdown in Brazil: QuickTake

Petroleo Brasileiro SA, Latin America’s largest producer with 2.7 million barrels a day of oil and gas output, became a source of contention during the first presidential debate. Bolsonaro accused Lula of mismanaging the company and presiding over an epic corruption scandal. Lula criticized Bolsonaro for “carving up” Petrobras through asset sales, as well as the decision to privatize utility Eletrobras.

Lula, a former union leader who governed Brazil from 2003 to 2010, has a checkered past with Petrobras and the oil industry at large. He presided over growing output and the discovery of the largest group of deep-water fields this century, which have become a profit center for Petrobras.

At the same time, he halted new lease sales in the so-called pre-salt to overhaul taxes and regulations, throttling how fast oil production grew. Without the licensing delays, Brazil would be pumping twice as much right now, according to analysts. Lula also implemented costly build-in-Brazil requirements that discouraged investments. If he wins, the local oil industry will look to who he recruits for his energy team to gauge how big the policy shift will be.

Oil Boom Falls Flat in Region With a Fifth of World’s Reserves

“Lula has relied heavily on lieutenants, so who is that new gang?” said Schreiner Parker, the head of Latin America for Rystad Energy, a consultancy. “It will be interesting to see who fills in the mandarin positions.”

Political consultancy Eurasia sees Lula’s odds of winning the election up at 70%.

Another Lula administration would see Petrobras expanding its refineries in Brazil and rebuilding its international operations, Senator Jean Paul Prates, his point person for oil and gas, said in an interview. The company would also become a global player in the energy transition -- even if it means lower profits and dividends. Petrobras’s limited focus on the pre-salt has generated heaps of cash in the short term, but leaves it exposed to a changing industry in the coming decades, he said.

“It has turned into a huge dairy cow, and it won’t last,” Prates said. “It’s walking blindfolded off a cliff.”

Lula’s Petrobras Would Seek Energy Transition, Expand Refining

While Lula oversaw a massive rally in his eight years in office, aided by a commodities super-cycle, his legacy was tarnished by policy mistakes made by his successor and the so-called Carwash corruption probe. The investigation centered on Petrobras, and put him in jail for almost a year and a half. His convictions were later tossed out by the Supreme Court on procedural grounds, but some Brazilians still see him as a symbol of corruption. In the first presidential debate, Bolsonaro branded Lula’s government “the most corrupt in history.”

Exploration

To be sure, Brazil won’t stop pumping oil no matter the outcome of the October vote. Both candidates are supportive of oil and resource extraction, unlike Colombia’s recently elected President Gustavo Petro, who plans to ban new exploration out of environmental concerns. Besides, Petrobras has found so much oil this century that production will continue to grow whoever wins.

“Petrobras will continue as a giant in Brazil,” said Luiz Felipe Coutinho, the chief executive officer of Origem Energia, which has bought onshore natural gas fields from Petrobras and considers the company its main commercial partner.

Another thing unlikely to change regardless of the outcome is the risk of Petrobras subsidizing fuels. Lula has attacked Bolsonaro over high gasoline prices, a major complaint among Brazilians this year. Bolsonaro responded by attacking Petrobras’s leadership and ultimately slashing taxes to provide consumers relief.

Lula Win May Be Stressful, But Not Disastrous, for Petrobras

“At the end of the day it’s just not really a private sector company. It has a different cadre of investors who understand the quasi-sovereign aspect,” said Wilbur Matthews, founder of Vaquero Global Investment LP, who has owned Petrobras bonds in the past but thinks they are overpriced at the moment. “You don’t buy Petrobras stocks or bonds because you love the corporate dynamics.”

Liz Truss’s Historic Gamble With the UK Economy Is Already Unraveling

 

Philip Aldrick
Fri, September 23, 2022 

(Bloomberg) -- Liz Truss’s plan for growth, melding the biggest tax giveaway in half a century with Thatcherite deregulation, is a straight-up gamble with Britain’s future, and even before her chancellor of the exchequer had finished delivering it on Friday the bet was starting to sour.

The market’s verdict on the £220 billion policy blitz set out by Kwasi Kwarteng was swift and devastating. Sterling crashed below $1.11 for the first time since 1985, taking its slump for the year to date to 19%. Five-year gilts posted their biggest ever daily decline.

“The markets will do what they will,” Kwarteng, 47, said when challenged in the House of Commons over the mayhem that he had unleashed.

Even before the chancellor’s statement, former Bank of England policy makers were warning that Prime Minister Liz Truss’s determination to cut taxes regardless of the circumstances risked pushing the UK into a sterling crisis.

There was still a sense of shock in how far her chancellor went, scrapping the top rate of income tax in a boost to the highest earners, as well as delivering on cuts to corporate taxes, national insurance contributions and levies on home purchases that had been flagged in advance.

The final total didn’t even include the full cost of capping household energy bills for the next two years. That could add another £100 billion to taxpayers’ liabilities.

The tax cuts will cost the Treasury around £161 billion over the next five years. A further energy guarantee will add about £60 billion to that sum in the next six months, the only figure the Treasury provided.

Those eye-watering figures had analysts reaching for the history books to compare the package with famous policy errors of the past. The reaction -- with the pound falling even as traders priced in steeper hikes in interest rates to offset the increase in inflationary pressures -- is the sort of movement that is usually limited to emerging market currencies.

“Investor confidence is being eroded fast,” George Saravelos, global head of foreign exchange research at Deutsche Bank. He called for an emergency interest rate hike from the Bank of England.

The reaction leaves Truss and Kwarteng in a terrible bind. Truss, also 47, took office less than three weeks ago. Her efforts to stamp her authority on the government were interrupted by the death of Queen Elizabeth II, which brought politics to a halt for 10 days. And Truss has a desperate need to show that she can steer the UK through the global energy crisis.

She defended her plan in comments to CNN’s “State of the Union,” saying “we absolutely need to be incentivizing growth at what is a very, very difficult time for the global economy.”

At the same time, government measures to limit energy prices for consumers are “very important as well,” she said in excerpts from an interview for broadcast on Sunday.

She was elected Tory party leader over the summer due to her popularity with the membership. But two thirds of her lawmakers voted against her, and there were mutterings of a potential no-confidence vote before she’d even taken office.

The fear among investors is that Truss’s tax cuts will give the economy no more than a quick sugar rush, sending the debt ballooning and inflation spiraling, before a crash that leaves no lasting improvement on longer term growth.

Even the government’s fans were lukewarm in their support. Crispin Odey, a Tory backer and founder of the hedge fund Odey Asset Management where Kwarteng once worked as an analyst, said: “They are trying the right things, but there has to be a risk we are going into a Barber boom, by pushing the button on inflation.”

That’s reference to the ill-fated 1972 budget drawn up by Kwarteng’s Tory predecessor Anthony Barber. Barber, like Kwarteng, delivered a massive package of unfunded tax cuts which, in his case, saw the economy overheat and inflation soar before collapsing into recession. Barber’s boss, Edward Heath, was defeated by the Labour opposition two years later, and the UK had to seek a bailout from the International Monetary Fund in 1976.

What Bloomberg Economics Says ...

“The policies announced in Chancellor of the Exchequer Kwasi Kwarteng’s mini-budget will provide the economy with a sugar rush over the next year, but we highly doubt it’ll deliver the gear shift in growth that the government is banking on. That means it will lift inflation at a time when the Bank of England is trying to cool price pressure and, because the policy package is unfunded, put debt on an unsustainable path.”

--Dan Hanson, Bloomberg Economics. Click for the INSIGHT.

Truss similarly may have less than two years before she also has to call an election.

Truss has been clear that what matters to her is increasing the economic pie, rather than worrying about how it is divided.

That boldness is most evident in the central gamble at the heart of the mini-budget. Success hinges on a single number: Kwarteng’s 2.5% growth target, which is almost a whole percentage point above the official forecast for the next three years and a level last seen before the 2008 financial crisis.

If the government can lift GDP growth by a percentage point, the tax cuts will pay for themselves by the end of five years, according to the Treasury documents published on Friday. At that point, the government will have stabilized the national debt, fixed the UK’s productivity conundrum and given the country the competitive advantage of lower taxes.

Martin Weale, a former Bank of England rate setter now at King’s College London, described the growth target as “pie in the sky.” The government can’t be sure it will get 2.5% growth, but it can be sure that the tax cuts put the public finances in a perilous position, he said.

The Resolution Foundation projected that government borrowing as a share of GDP will rise for the next five years, adding a total of £411 billion to the existing £2.3 trillion debt pile.

At the same time, the benefits of the tax cuts are skewed toward the highest earners -- who traditionally are more likely to vote Conservative. Someone earning £200,000 will be £5,220 a year better off as a result of the tax cuts, while a worker on £20,000 will gain just £157.

“After 12 years of running the country, the Tories desperately need to establish a record of delivery quickly if they want to cling on to power,” said Ryan Shorthouse, chief executive of the Bright Blue think tank. “The prime minister and chancellor are going for broke.”

‘Nothing but fear in the UK’: Top US economist slams Liz Truss tax cuts and warns pound could plunge below dollar

Nadine Batchelor-Hunt and Connor Parker
Fri, September 23, 2022

Larry Summers painted a bleak picture of the UK economy. (Reuters)

A former US Treasury secretary has condemned the huge tax cuts unveiled by Liz Truss and Kwasi Kwarteng, branding them "naive and wishful thinking".

On Friday, chancellor Kwarteng announced the steepest tax cuts in a generation and said they were crucial to stimulate economic growth amid a stark cost-of-living crisis. He also announced a lift on banker's bonuses.

Among the measures included cutting National Insurance Contributions (NICs) by 1.5% - giving £1,800 to the richest households and just £7.66 a year to the poorest.

Cuts to income tax, including the top rate from 45p to 40p, have been met with incredulity by critics and will mean that two-thirds (65%) of the gains from Kwarteng's personal tax cuts will go to the richest fifth of households.

It means a worker on £1m per year will see an annual tax cut of £55,000.

The package of measures has been widely criticised as being unaffordable as well as disproportionately helping high earners over and above the most vulnerable at a time when the cost of living is set to bite.

Following the announcement, the pound dropped 3% to below $1.10 for the first time since 1985 as investors made their feelings clear.

Read more: 'Not a game': UK finances on unsustainable path, warns top economist

pound

One senior US economist warned that confidence in the UK could drop so low that the pound may slump below the dollar.

Former US Treasury secretary Larry Summers told Bloomberg that policies were "naive and wishful thinking".

“It makes me very sorry to say, but I think the UK is behaving a bit like an emerging market turning itself into a submerging market," he said.

"Between Brexit, how far the Bank of England got behind the curve and now these fiscal policies, I think Britain will be remembered for having pursuing the worst macroeconomic policies of any major country in a long time."

"There’s nothing in the pattern of market response in the UK that suggests anything but fear rather than confidence in the policy approaches being taken.

“It would not surprise me if the pound eventually gets below dollar if the current policy path is maintained.“

In the UK itself, former prime minister Gordon Brown accused the government of being "heartless" and said the measures would overwhelmingly make the rich wealthier.

Gordon Brown has accused the government of being "heartless". (Getty Images)

In a Twitter thread, Brown warned that the gap between rich and poor continues to widen as "the government lavishes billions on the already wealthy at the expense of the new poor".

He added: "It's no longer the welfare state that's the last line of defence but charities. And yet charities find themselves broke.

Compassion isn’t running out but cash is. Churches are worried they won’t be able to afford to heat their halls for those who cannot heat their homes.

"The reversal of the NI rise will give £1,800 to the richest and just £7.66 a year to the poor.

"The removal of the bankers’ bonus cap, corporation tax cuts and the rejection of a further windfall tax will mercilessly underline that a winter of destitution is coming for millions not because we are a poor country but because we are an ever more unequal one.

"The coming battle must be against poverty, not against the poor. You cannot rely on a heartless government having a change of heart, but concerted action by the public can force a change of mind."

There was even the first signs of discontent on the Tory backbenches, with senior MP Julian Smith warning: "This huge tax cut for the very rich at a time of national crisis & real fear & anxiety amongst low income workers & citizens is wrong."
'A new era'

Announcing his mini-budget to MPs in parliament, Kwarteng said it was a "new approach for this new era" and claimed his plans would pay off with economic growth.

"We promised to prioritise growth," he said. "We promised a new approach for a new era.

"We promised to release the enormous potential of this country. Our growth plan has delivered all those promises and more."

Read more: Martin Lewis brands tax cuts and borrowing in mini-Budget ‘staggering’

Kwasi Kwarteng said the tax cuts which overwhelmingly benefit the wealthiest are necessary for economic growth. (Reuters)

Money Saving Expert Martin Lewis described the budget as helping "mega earners".

"From next April the 45% top rate of tax (applies to those earning £150,000) will be scrapped," he said. "So the top rate will be the 40% higher rate threshold. This means mega earners, pay the same rate as those on £50,000."

Elsewhere, think tanks focused on poverty and those on low incomes criticised the government for deciding to provide more money for the wealthy during the rising cost of living.

"This is a mini-budget that has wilfully ignored families struggling through a cost of living emergency and instead targeted its action at the richest," poverty charity the Joseph Rowntree Foundation said on Friday said following Kwarteng' announcements.

"It leaves those on the lowest incomes out in the cold with no extra help to get them through the winter."

It added: "This budget ignored millions of people on low incomes, struggling to afford essentials & unable to pay their bills. It’s left them out in the cold, facing an incredibly bleak winter."

Mia Fahnbulleh, CEO at the progressive think tank the New Economics Foundation (NEF), described Kwarteng's budget as a "massive transfer to the wealthy whilst families on low and modest incomes are left to take the hit during a cost of living crisis".