HMBR and Co.

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.

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.

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.

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.

Three years ago the 11m people of Wuhan, a Chinese city, were the first to be locked down to stop the spread of a strange new virus. Covid-19 had actually emerged weeks earlier, but authorities played down its dangers, allowing millions to leave before the city and its surrounding province were sealed. But in 2023, after China abruptly dropped strict pandemic controls, the country’s rulers are intent on promoting a return to normality. Celebrations of the lunar new year holidays began over the weekend.

For unknown numbers of Chinese it is a more sombre new year. Official death tolls stand at around 70,000 between December 8th and January 19th. The true number is far higher, according to exhausted funeral workers and doctors. Millions heading to home towns and villages hope they will not infect elderly relatives, though it may help that many villagers have already had the virus. An exhausted country is ready to move on.

In 2022, Europe’s consumers presented economists with a puzzle. Following Russia’s invasion of Ukraine, consumer confidence—measured through surveys on households’ financial situation and their overall economic outlook—tanked. Europeans worried about the war’s impact on the rest of Europe, high energy costs and potential economic hardship. Economic forecasters feared a recession.

Yet spending in shops held up fairly well. That was because the labour market remained strong, the post-pandemic spending boom still had legs and governments transferred billions to households to help pay energy bills. Since then, prices for gas, power and fuel have come down to pre-war levels and a severe energy crisis has been avoided. The release of new data on consumer sentiment on Monday should reflect that and show that Europeans are bullish. The European consumer is not exactly known for pushing the world economy forward, but has nonetheless proved remarkably resilient in this crisis.

As the West promises more heavy weapons to Ukraine, rumours abound that Vladimir Putin will soon announce a second wave of mobilisation. Russia has not deployed all of the roughly 300,000 men recruited in the first drive, yet a new call-up would still be needed to sustain another large-scale offensive, which Ukraine reckons will begin in the coming weeks. The recent appointment of Valery Gerasimov, Russia’s senior general, to take command of the invasion may also signal that a fresh attack is coming.

For the offensive to stand a chance, claims Ukraine, Russia would have to call up half a million more men. That would be politically difficult. The first mobilisation sparked widespread protests in September; an estimated 700,000-800,000 men fled the country in one month. Families have become only more unsure about sending their loved ones off to war. Mr Putin is committed to his fight. His people will have to consider the costs—not that anyone is asking their opinion.

For years India’s economic growth was hindered by a rotten banking sector, plagued by bad loans and shoddy management. Now that constraint is easing. Banks’ credit growth rose to a ten-year high in December. Earlier in 2022, the share of bad loans fell to a seven-year low. The turnaround is a consequence of several factors. Government reforms to clean up balance-sheets have worked. A popular mobile-payments platform has brought more funds into the banking system.

Private banks are flourishing. On Saturday ICICI, the country’s second-biggest private bank, reported a 34% year-on-year increase in profits for the last quarter of 2022. Axis Bank, the third biggest, posted an increase of 62% as it reported results on Monday. A global economic slowdown will hurt momentum, but the central bank is not too worried. It predicts that, in the worst possible scenario this year, Indian banks will remain resilient. In the best case, they will thrive.

With its famous undulating roof line, the Canopy Terminal at Jeddah airport is often the first view that pilgrims enjoy when they land in Saudi Arabia for the Hajj. From Monday, it will also be home for three months to the first Islamic Arts Biennale, featuring an indoor exhibition that focuses on qiblah or the “sacred direction” and an open-air show about hijrah, or migration, that began with the journey that the Prophet Muhammad took from Mecca to Medina in 622. Forty-four artists have created works that examine how Islam’s most sacred sites give Muslims around the world a sense of community and belonging.

Politically, the Biennale is the latest expression of soft power by the crown prince, Muhammad bin Salman, and his cousin, Badr bin Farhan Al-Saud, the culture minister. They are keen to use art to project a gentler image for the kingdom after the murder of Jamal Khashoggi, a journalist, and a huge increase in public executions in 2022.