June 28 update

Alexander Lukashenko, Belarus’s president, confirmed that Yevgeny Prigozhin, the leader of the Wagner mercenary group, had arrived in his country. Mr Lukashenko, who claims to have helped negotiate an end to Wagner’s short-lived mutiny, said that Vladimir Putin, Russia’s president, had considered killing Mr Prigozhin. Meanwhile Jens Stoltenberg, NATO’s chief, said the alliance had increased its military presence on its eastern flank after Mr Prigozhin’s move to Belarus.

Protests erupted across France following the shooting of a 17-year-old man by the police in Nanterre, just west of Paris. Two officers pulled over the victim, Naël M, while he was driving his car on Tuesday; as he drove off, one shot him. Gérald Darmanin, France’s interior minister, said video of the killing was “extremely shocking” but that he was deploying an additional 2,000 officers across the country to quell violent demonstrations.

Russian missiles struck a crowded restaurant and shopping area in Kramatorsk, a city in eastern Ukraine; at least four people were killed and dozens injured. Earlier the UN said that Russian forces executed 77 Ukrainian civilians between the beginning of the war and May this year, and that 864 Ukrainians were arbitrarily detained by Russian troops. Ukrainian forces held 75 people unlawfully.

Profits at China’s industrial firms fell by 18.8% year-on-year in the first five months of 2023, partly as a result of weakening demand. In May industrial earnings contracted by 12.6% from a year earlier. China’s post-covid economic recovery is stuttering on many fronts, including retail sales, exports and youth unemployment, which hit a record high of 20.8% in May.

UBS intends to cut more than half of Credit Suisse’s 45,000 staff, with lay-offs starting next month, according to Bloomberg News. UBS agreed to buy Credit Suisse, a fellow Swiss bank, in a government-brokered deal in March; it completed the acquisition earlier this month. UBS has said it plans to cut $6bn from staffing costs in the coming years.

Azerbaijani forces killed four Armenian soldiers in the disputed region of Nagorno-Karabakh, according to separatist authorities. Armenia ruled Nagorno-Karabakh from the 1990s until a short war in 2020 saw Azerbaijan seize much of the province. With Russia, Armenia’s traditional patron, bogged down in Ukraine, America and the EU have tried to negotiate a more lasting peace. The feuding neighbours are currently holding talks in Washington.

South Koreans woke up a year or two younger after their country scrapped its traditional method of counting age. Under the old system, South Koreans were considered a year old when they were born. A year was added to citizens’ age every January 1st. Babies born on New Year’s Eve became two the following day. The government has now adopted the internationally accepted method.

Figure of the day: 85%, the proportion of the world’s opium that was produced in Afghanistan when the Taliban took over. Read the full story.

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PHOTO: AP

Wagner’s revolt spooks the Russian economy

The aborted mutiny of the Wagner mercenary group on June 24th temporarily shook the foundations of the world’s 11th-largest economy. The rouble fell sharply, before edging up again. The share prices of several of Russia’s largest companies wobbled. A slew of economic data released on Wednesday, including on retail sales and industrial production, will not yet reflect the turmoil of recent days. But the future looks more uncertain than it did before.

For now, many of Russia’s respected technocrats—including those leading the central bank and the economy ministry—remain in charge. That rules out any madcap policies, such as money-printing. But Wagner’s revolt has brought the conflict with Ukraine home in a way that a war on foreign soil never could, damaging consumer and business confidence. Russia still looks likely to avoid recession: the latest data puts year-on-year growth at around 1.5%. Yet if there is more instability, that could change quickly.

PHOTO: GETTY IMAGES

America’s stressed-out banks

Having just been through a real crisis, America’s banks now face a hypothetical one. On Wednesday the Federal Reserve will publish the results of its annual stress tests, designed to see how lenders would fare in dire economic circumstances. This year, it subjected them to some of its toughest scenarios yet, including a 38% plunge in housing prices. Analysts think the test will show that big banks are well capitalised, allowing them to return cash to shareholders through stock buybacks.

But the stress tests have themselves been tested recently, and found wanting. The Fed failed to include sharply higher interest rates as a potential problem last year. Markets had little forewarning that rates—not an economic slowdown—could spark a regional-bank meltdown, as they did in March, leading to the failure of First Republic and other lenders. This year’s test, which began before that tumult, also excludes pressure from higher rates. The Fed, unlike the rest of America, would benefit from extra stress.

PHOTO: EPA

NATO and the Baltic states

On Wednesday Jens Stoltenberg, NATO’s secretary-general, will greet Kaja Kallas, Estonia’s prime minister, at the alliance’s headquarters in Brussels. They will discuss NATO’s renewed effort to bolster its eastern flank in the wake of Russia’s war in Ukraine.

The bloc has recently taken several steps in this direction. On Monday Mr Stoltenberg travelled to Lithuania to observe “Exercise Griffin Storm”, a NATO exercise, with Boris Pistorius, the German defence minister. While there Mr Pistorius announced that Germany would station a brigade permanently in Lithuania, provided the Baltic state supplies the required infrastructure for around 4,000 soldiers. The decision—which Germany had been previously reluctant to make—was warmly welcomed by Gitanas Nauseda, Lithuania’s president.

Estonia already has warplanes and troops from other NATO countries on the ground. More could now follow. The next, much-heralded, summit of the alliance will be held in Vilnius, the capital of Lithuania, starting on July 11th.

PHOTO: EPA

Italy hopes inflation has passed its peak

There were positive signs on Wednesday that Italy’s inflation rate has settled on its downward trajectory. Provisional inflation figures showed that consumer prices rose at an annual rate of 6.4% in June, down from 7.6% in May, mainly owing to a drop in energy costs. Core inflation, which excludes energy and fresh food, was also down, from 6% to 5.6%.

Inflation is a sensitive issue in the country. Giorgia Meloni’s government has been complaining for months about the European Central Bank’s efforts to dampen price rises by ratcheting up borrowing costs. Higher interest rates both throttle economic growth and make it more costly for Italy to service its huge, though shrinking, public debt of more than 140% of GDP. Before the release of the latest inflation data, Ms Meloni took another swipe at the ECB, calling its interest-rate rises a “simplistic” approach.

PHOTO: REX SHUTTERSTOCK

Pyotr Pavlensky’s “pornopolitique” in court

On Wednesday a court in Paris will rule on whether a Russian performance artist, Pyotr Pavlensky, and his partner, Alexandra de Taddeo, breached privacy laws in a French sexting case. The lawsuit was brought by Benjamin Griveaux, a former government minister who abandoned his political career after Mr Pavlensky posted online two private sex videos he had made. Mr Griveaux had sent them to Ms de Taddeo during a brief liaison. She later started a relationship with Mr Pavlensky.

The French usually believe that the public interest stops firmly at the bedroom door. Mr Pavlensky—who once nailed his scrotum to the ground in Moscow’s Red Square (a metaphor for society’s “apathy, political indifference and fatalism”, he later said) and was granted asylum in France after being accused of sexual assault—judges this attitude to private life hypocritical when it concerns politicians. He “stole” the videos from Ms de Taddeo’s phone, he said, as part of an art project he called “Pornopolitique”. Mr Griveaux’s lawyer called it “revenge porn”.