LONDON’S BUSINESS NEWSPAPER
TEN YEARS ON (REALLY) LOOKING BACK AT 2012’S OLYMPIC SUCCESSES P19
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CITYAM.COM
PIPE SCREAM
TUESDAY 26 JULY 2022
ISSUE 3,785
NORD STREAM 1 FLOWS CUT AGAIN AS EUROPE BRACES FOR ENERGY SHORTAGES
NICHOLAS EARL GAZPROM plans to further cut gas flows into Europe, raising the chilling prospect of rationing and blackouts across the troubled Continent this winter. The Kremlin-backed gas giant warned yesterday it was shutting down a gas turbine engine on the key Nord Stream 1 pipeline to Germany, and that flows would drop to 20 per cent of normal capacity. Flows were already at just 40 per cent of normal levels — putting intense pressure on European countries scrambling for supplies to meet
household energy needs this winter. The European Union (EU) has been chasing replacement vendors such as Nigeria, Qatar and the US, alongside trying to push member states into 15 per cent gas cuts between August and March. Fears of supply shortages caused European gas prices to spike a whopping 12 per cent following the news, with UK benchmarks also up two per cent from already historically elevated levels. The UK is not heavily reliant on Russia for energy supplies, but is affected by spikes in the wholesale price. The bloc has accused Russia of energy blackmail, while the Kremlin has argued
gas disruption is being caused by maintenance issues and Western sanctions following the country’s invasion of Ukraine. Russia recently retaliated to EU plans to ban seaborne oil shipments and coal imports, cutting off supplies to 12 EU member states which refused to purchase Gazprom supplies in roubles. Moscow’s latest move likely nails on Germany, Europe’s economic powerhouse, tumbling into a recession in short order. The Continent’s largest economy is already stuttering amid surging inflation and months of weaker Russian gas flows,
a survey published yesterday revealed. Confidence among German businesses dropped to 88.6 this month according to an IFO Institute index, with 100 representing a neutral reading. “Germany is on the cusp of a recession,” the IFO Institute said, adding that “companies are expecting business to become much more difficult in the coming months”. Robin Brooks, chief economist at the Institute of International Finance, noted “the forward-looking expectations component in the German IFO survey is almost as bad as [the financial crisis in] 2008”.
FREE STAR WARS
Regulators to probe space takeovers MILLIE TURNER TWO foreign takeovers of satellite firms Oneweb and Inmarsat risk becoming stuck in orbit thanks to regulatory attention, as the country becomes increasingly reliant on space tech for digital communications and UK national security. The proposed buyout of Oneweb by French rival Eutelsat, partly owned by a Chinese sovereign wealth fund, could get tangled in the government’s National Investment and Security Act (NSIA) for its ties to an ‘unallied’ country, onlookers have said. Meanwhile the competition watchdog yesterday launched the first phase of an inquiry into Inmarsat’s £5.4bn takeover by the US’ Viasat. The joint companies would create satellite and communications powerhouses to compete against Elon Musk’s SpaceX and Starlink – which currently dominate the satcoms industry. Competition lawyer at DMH Stallard, Jonathan Compton, told City A.M. that national security and investment concerns are “less [likely] with allied countries, unlike countries who may not have our best interests at heart. “Where a Chinese shareholder’s involved, that will cause concerns,” he said. £ CONTINUED ON PAGE 3
Agency puts focus on ‘increased’ use of cryptocurrency in serious crime HAMZA FAREED MALIK THE UK’s top crime body yesterday warned that fraudsters and drug dealers were “increasingly” using cryptocurrency in moneylaundering schemes as it announced it seized millions of pounds worth of digital assets last year.
The National Crime Agency said it had recovered £26.9m-worth of assorted cryptocurrencies – up from zero in the twelve months beforehand. “With no change in the volume of illicit funds from crimes such as drugs and fraud, tried and trusted methods of money laundering
continued,” the report read. “Criminals increasingly exploited financial technology and crypto assets (last year),” the report’s authors warned. “It is a sign that law enforcement agencies are getting to grips with and adapting to this new technology and space. As adoption
increases, so will the level of regulation,” Asim Arshad, an associate solicitor in the crypto and blockchain team at law firm Mackrell Solicitors, told City A.M. “It shows the law enforcement agencies of this jurisdiction, along with the courts, will not be dissuaded from tackling, disrupting
and taking enforcement action against those bad actors seeking to exploit this technology for criminal gain.” Last year the Financial Conduct Authority warned that the unregulated crypto market posed a risk to the strength of the UK’s overall financial system.
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