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First: Musk summons the head of the Saudi Wealth Fund

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good morning. Elon Musk summoned The head of Saudi Arabia’s Public Investment Fund is sued over a 2018 tweet alleging that the Tesla chief had “secured financing” to take the electric car maker private.

Tesla’s legal team filed papers with PIF Governor Yasir Al-Rumayyan’s office manager on December 19, according to court documents filed in California federal court on Tuesday. Musk’s team is seeking Al-Rumayyan, who is also the chairman of Saudi Aramco, to testify at the trial, which is set to begin in San Francisco later this month.

Any definitive testimony from Al-Rumayyan could focus on the discussions the PIF had with Musk before announcing the “financing secured.” The investors who filed the lawsuit allege that Musk manipulated Tesla’s stock price when he tweeted in August 2018 that he had financing to take the automaker private at $420 per share. Deal did not materialize.

Musk has previously said, in public appearances and in court documents, that a “handshake” agreement was reached with Al-Rumayyan and the fund to raise the funds needed to take Tesla off the public markets.

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  • Market news: Tesla shares It fell on the first day of trading in 2023 After shipments of the new batch of cars came in below Wall Street expectations, while the US tech track also pushed Apple’s market value below its peak by $1 trillion.

1. The European Union set to require Covid testing for travelers from China It is expected that the European Union Enforce Covid-19 tests prior to departure Travelers from China within days to try to prevent that country’s infection from spreading to Europe. A spokesman for the European Commission said the “overwhelming majority” of the 27 EU member states requested action at a meeting in Brussels yesterday.

More on the COVID outbreak in China:

  • The European Union has Offer free Covid-19 vaccines to China, an offer promptly rejected by the Chinese government.

  • China Contract on factory activity In December, according to a special survey, it highlights the economic costs of the country’s sudden abandonment of the strict zero Covid regime.

2. Sam Bankman Fried pleads not guilty to the criminal charges Founder of FTX The petition was entered in federal court in Manhattan On Tuesday, just weeks after his arrest in the Bahamas at the request of US federal prosecutors and his subsequent extradition. The eight counts include telephone fraud, conspiracy to commit commodity and securities fraud, conspiracy to commit money laundering, and campaign finance violations.

3. Kevin McCarthy loses his first two major votes It was Kevin McCarthy fight of his political career After losing two votes to be elected Speaker of the United States House of Representatives, he became the first majority party leader in a century to falter in early balloting.

4. The new Israeli Minister of Security makes a surprise visit to Al-Aqsa Itamar bin Juffair They arrived at the Al-Aqsa Mosque compound, the third holiest site in Islam, just after dawn is under tight Israeli security protection. His tour of the compound, which has historically been a hotspot for Israeli-Palestinian tensions, lasted about 15 minutes and passed without incident, according to Israeli authorities.

5. Low oil prices help tame inflation in Turkey Turkish inflation slowed down in December For the second month in a row, recording a sharp decline as the cost of fuel and food fell. Annual consumer price inflation reached 64.3 percent in December, according to data released by the government statistics office on Tuesday. It was the fastest decline in the annual rate in at least 22 years.

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Line chart of the annual change in consumer prices (%) showing the decline in the inflation rate in Turkey

next day

Myanmar Independence Day The nation will celebrate 75 years since it declared its independence from Britain.

Philippine President visits China President Ferdinand Marcos Jr. continues his three-day visit to China, where he is He is expected to meet Chinese President Xi Jinping. On the agenda is a discussion of China’s actions in the South China Sea. (Reuters)

Transport strikes in the UK About 40,000 RMT members will Theater strikes Today, Friday and Saturday in a dispute over wages, job security and changes in work practices. Train users have been warned to “only travel if absolutely necessary”.

What else do we read?

The Covid Generation in China: Growing Inequality Behind Xi’s Transformation Xi Jinping’s administration took a dramatic U-turn last month, ending its no-Covid policy of lockdowns, mass testing and careful contact tracing. One of the less discussed reasons for this was how the policy was sharpened China’s already high levels of social inequalityEspecially among urban and rural residents.

Make business better in 2023 From rethinking networking in the hybrid age to getting a pay raise and leaving the job well – here’s a roundup of some The most useful career guidance for FT Throughout the year to help you hit the ground running in 2023.

Opinion: BoJ needs courage to change course Yield curve control was introduced in Japan in 2016 to boost economic activity and stimulate inflation. With core inflation in November at its highest level in 40 years, A policy shift is necessary. It will be painful, Megan Green writes, but the longer you delay acting, the worse.

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Top Glove strives to have as clean an image as their products After suffering a reputation crisis in recent years, the leading manufacturer of rubber gloves has a strong incentive to convince outsiders that it is committed to employee welfare and work ethics. But as Western policy makers are tightening scrutiny of global supply chainsthe suffering of the Malaysian company could be an indication of the problem of other industries.

Asset managers are bracing for a tough year of cost cutting Facing global asset managers long overdue account Falling assets force them to cut costs and make difficult decisions about where to invest for growth. Most are also under pressure to find money to develop their technology and win new customers, which is cutting staff costs and lowering bonuses.

Take a break from the news

From Vermeer’s new exhibition at the Rijksmuseum in Amsterdam to Joni Mitchell’s first full solo show in 20 years, Here are the top tickets for 2023 From the world of art, music and entertainment.

Dutch artist Vermeer
Vermeer’s Girl with a Pearl Earring will be part of a stunning collection of works by 17th-century Dutch masters at the Rijksmuseum from February

Thank you for reading and remembering that you can Add FirstFT to myFT. You can also choose to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to firstft@ft.com

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next week Start each week by reviewing what’s on the agenda. Participation here

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Economic

Monetary independence is overrated, and the euro is on the rise

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Shortly after the latest bout of the eurozone debt crisis — Greece’s battle with the rupture of the single currency in summer 2015 — a colleague bet that within a decade the euro would lose at least one member. So far, it’s been quite the opposite: the monetary union just got a member, with Croatia joining at the start of the new year.

This force of attraction is not a one-off. Remember that during the most difficult years of monetary union, one Baltic country after another stepped forward and joined. The next Bulgaria will no doubt be allowed to adopt the euro soon. (A number of smaller and poorer European jurisdictions also use the euro either through unilateral adoption or as a result of the informal private sector euro process.)

One could say that there is nothing to see here – that it would be surprising if small, open economies did not want to participate in monetary policy making for the currency that dominated their trading relationship. But the notion is such that the euro in its current form is so doomed – especially among Anglo-American economists – that some reflection on its recent expansion is timely. Because old misgivings are becoming increasingly unconvincing, while ongoing changes in how money works speak to the advantage of the euro.

In recent years it has become – or should have been – increasingly clear that monetary ‘independence’ in the sense of having one’s own floating currency is not all it has to be. The advantage is supposed to be that a depreciating currency can offset negative shocks by boosting exports. As the fall of the pound sterling in 2016 after Britain’s EU referendum showed, however, in a world of long and complex supply chains across borders, currency depreciation could make your population poorer by raising the price of imports, with no support for export volumes. .

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Meanwhile, the benefits of monetary integration are being demonstrated by the energy price crisis in Europe. Take Slovakia. Yes, it has to deal with similarly high inflation as its non-euro neighbours. But it does so while enjoying a much lower interest rate (2.5 percent for the European Central Bank) than the Czech Republic and Poland, where borrowing costs are three times higher, or 13 percent in Hungary.

Size matters in a global economy whose rhythm is still set by the US financial cycle, and only the monetary union of euro economies gives the European Central Bank a degree of independence from the US Federal Reserve.

Second, it is now easy to see the vulnerabilities that emerged during the eurozone crisis as a type of crisis that could hit anyone, including economies with independent floating currencies, rather than a unique weakness in the euro.

Italy remains the country where pessimists believe the combination of high debt and low growth should eventually cause the euro’s demise. However, last summer it was not Italy, but the new populist government in the United Kingdom that severely shook the markets with its irresponsible policymaking. In the end, the Bank of England had to step in to contain the sovereign yields.

While the ECB may still be tested in this regard, it has the advantage of being more independent of its political masters than any national central bank. If anything, the Bank of England has more reason to fear monetary finance charges – which it was evidently keen to disprove – and which complicated its message when it turned from selling gold bonds to buying them in the market’s fright in the fall. By contrast, the European Central Bank created a permanent tool to deal with similar events last summer, with little controversy.

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All this suggests that the euro will become more, not less attractive over time. The appeal of different currencies will be further altered by how they manage the next big leap in central banking: the introduction of an official digital currency. So far, only peripheral economies like the Bahamas and Nigeria have gone all the way — although China is clearly primed for its capacity to expand the digital renminbi it has been experimenting with.

Among the rich economies, the European Central Bank has quickly moved to the top spot. Finance ministers swung defensively behind the digital euro after Facebook’s move in 2019 to create a private global digital payment system. But their support has now been bolstered by looming business opportunities in an economy of “programmable” safe money.

Formally, the digital euro is still only in the exploration phase. But politically, it has reached a point of no return. After Croatia, future entrants to the monetary union will enjoy having a developing digital currency in the bargain.

martin.sandbu@ft.com

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Britain’s Sunak says fighting inflation will require discipline, Reuters

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© Reuters. Reuters / Henry Nichols / Paul

LONDON (Reuters) – British Prime Minister Rishi Sunak has said inflation is not guaranteed to go down this year and his government must be disciplined to ensure it does.

“You have to continue to be disciplined and take the right and responsible decisions in order to bring down inflation,” Sunak said in an interview with BBC Television. “It’s really important that we do that. It’s not something abstract. It affects people.”

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California storm leaves more than 330,000 without power, more severe weather ahead By Reuters

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© Reuters. FILE PHOTO: Capitola Wharf damaged by the storm’s severe waves is seen in Santa Cruz, California, United States, on January 5, 2023, in this screenshot obtained from a social media video. Kelly Pound/via Reuters

(Reuters) – Heavy rains and damaging winds knocked out power to hundreds of thousands of homes and businesses in California late Sunday as the region prepared for the next onslaught of severe weather.

More than 330,000 homes and businesses were reported to still be without power in California as of 3:08 a.m. EDT (8:08 GMT) Sunday night, according to data from PowerOutage.us.

At least six people have died in the bad weather since New Year’s weekend, including a child who was killed by a falling redwood tree and crushing a mobile home in Northern California.

Meanwhile, meteorologists have warned that another “atmospheric river” of thick, moist tropical air will hit California on Monday with mountain rain and snow.

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An NWS weather warning Saturday warned that the cumulative effect of back-to-back heavy rain storms since late December could cause rivers to rise to record levels and cause flooding across much of central California.

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