Ukraine’s government removed senior officials amid various corruption scandals, in an effort to maintain the trust of its allies. On Monday Vasyl Lozinskyi, Ukraine’s deputy infrastructure minister, was detained for allegedly stealing $400,000 allocated for aid. Kyrylo Tymoshenko, deputy head of Ukraine’s presidential administration, resigned after being criticised for his luxurious lifestyle. Oleksiy Symonenko, the deputy prosecutor general, who took a controversial holiday to Spain, was also dismissed. President Volodymyr Zelensky banned officials from foreign vacations on Monday.
NATO’s secretary-general, Jens Stoltenberg, said he was “confident” that a solution would “soon” be found to release German-made Leopard tanks to Ukraine, after meeting with Boris Pistorius, Germany’s new defence minister, in Berlin. Germany has so far refused to send its own tanks, or allow other countries to do so. On Tuesday Poland piled more pressure on Germany with a formal request to re-export its own stock to Ukraine.
After six months of decline, business activity in the euro zone’s manufacturing and service sectors unexpectedly ticked up in January, according to S&P Global, a financial-information provider. Good economic health provided a glimmer of hope that the region could escape recession, as lower energy prices and China’s reopening also bolster prospects for the global economy.
Swatch said it will aim to achieve record sales this year as China reopens after a lengthy pandemic lockdown. The region accounts for an estimated 40% of the Swiss watchmaker’s revenue. The company—which also owns a swathe of luxury brands including Tissot, Longines and Omega—reported an increase of 4.6% in net global sales from the previous year.
Seven people were killed in Half Moon Bay, a city in northern California, in the state’s second mass shooting in three days. Police have arrested the suspected gunman. Earlier the death toll from Sunday’s mass shooting in Monterey Park, in Los Angeles, rose to 11 after an injured victim died in hospital. In both attacks, the victims were Asian-American.
For the first time since the Stone Age, Comet C/2022 E3 will pass Earth. The exotic green comet orbits the sun every 50,000 years and is now visible to the naked eye in the northern hemisphere. Next week it will reach its closest point to Earth, a mere 27m miles away, as it heads back to the Oort cloud at the edge of the solar system.
Fact of the day: 467,000, the number of working days British employers lost to strikes in November, the highest in over a decade. Read the full story.
Germany’s agony about tanks
The NATO secretary-general, Jens Stoltenberg, left a meeting with Germany’s new defence minister, Boris Pistorius, on Tuesday morning on a hopeful note. Germany has refused thus far to send its Leopard tanks, deeming them “offensive weapons” that could lead to escalation with Russia; it also has not allowed other countries to donate their German-made Leopards. Mr Stoltenberg said he was “confident” of a forthcoming breakthrough.
Flagellated by allies at home and abroad, the government of Olaf Scholz, Germany's chancellor, has started moving. Last week his officials said sending Leopards would depend on America supplying Abrams tanks. Then Mr Pistorius said other countries could start training Ukrainian crews on the Leopards pending deliberations in Germany. Now Annalena Baerbock, the foreign minister, says allies such as Poland could potentially send Leopards. In the end, surely, Mr Scholz will release some tanks—but not before wasting every opportunity for Germany to lead Europe.
European v American inflation
Predicting inflation is tricky. Many failed to foresee its heights last year, and just as many are surprised by its decline in recent months. The fall has largely been driven by energy prices coming down. The new composite PMI numbers for Europe, released on Tuesday morning, provide some further insights into inflation pressures in the manufacturing and services sectors. American figures will be released later in the day.
Europe was harder hit than America by supply disruptions in the wake of the covid pandemic. Those disruptions seem to be now easing, slowing the rise in input prices for European businesses. But selling prices continue to climb. Increasing wage costs could be part of the reason. In Europe, where wages are often decided in collective-bargaining agreements, pay has been increasing more slowly than in America’s flexible and tight labour market, but is now steadily piling pressure on prices. Europe’s inflation race is not over just yet.
The fortunes of the world’s biggest enterprise-software firm may offer clues to the state of the tech industry overall. Since November 2021 Microsoft’s shares have fallen by 27%. That is two percentage points fewer than the tech-heavy Nasdaq index, probably because Microsoft’s customers are disproportionately businesses—which have tended to cut back less than consumers have.
Still, Microsoft’s quarterly results on Tuesday may make for grim reading. Last week the firm said it planned to lay off 10,000 people—about 5% of its global workforce. Analysts expect that year-on-year revenue growth will slow to around 2% in the last quarter of 2022, down from 11% in the previous one. A yet-bigger worry is the slowing of Microsoft’s cloud business, which accounts for two-fifths of sales. The relatively new cloud-computing industry has never been through a sustained downturn, and so it is unclear how it might perform. Small wonder, then, that Microsoft is looking at other ways to boost business. On Monday it announced a “multibillion dollar” investment in OpenAI, an artificial-intelligence startup.
A Trump probe in Georgia heats up
In Donald Trump’s knot of legal challenges, one important thread is an inquiry into his attempt to overturn the 2020 presidential election in Georgia. A county-level prosecutor launched an investigation a month after Mr Trump phoned a state official and asked him to “find” enough votes for him to win. (The former president defended the phone call as “perfect”.) A special grand jury has compelled unco-operative witnesses to testify, including Rudy Giuliani (Mr Trump’s former lawyer) and Lindsey Graham (a Republican senator).
The investigation wrapped up in January. On Tuesday a judge will hear arguments over whether the special grand jury’s report should be made public. It could include recommendations for criminal charges, such as solicitations of election fraud—though any indictments would come from a separate grand jury. “The allegations are very serious”, said the prosecutor. But as long as the report remains sealed, it will be hard to know the real risks Mr Trump is facing.
The many woes of El Salvador
President Nayib Bukele said El Salvador had repaid its creditors "in full" as $604m of bonds matured on Tuesday. Concerns that the Central American country might default were alleviated last year when the government secured a $450m loan from the Central American Bank for Economic Integration and executed two bond buybacks. But investors’ confidence in El Salvador remains low. The public debt-to-GDP ratio stands at over 80%. In September Fitch, a ratings agency, downgraded the country’s debt yet again.
The uncertainty is thanks almost entirely to Mr Bukele's unconventional leadership. After making El Salvador the first country in the world in which bitcoin is legal tender, in September 2021, Mr Bukele started to invest public money in the cryptocurrency. But the government’s portfolio has lost almost half its value since then, a loss worth some $52m. Some of his other policies are expensive, too. A crackdown on gangs has swelled the prison population. And the cost is not just financial: many innocent people have been rounded up.
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