Davos Latest: Germany Sees ‘High Risk’ of Renewed Trade Tensions

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(Bloomberg) — Members of the global elite are back in Davos in their regular January slot after a three-year hiatus due to the Covid-19 pandemic.

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While the billionaires are gathering again for the World Economic Forum’s annual meeting, which kicks off Tuesday in the Swiss ski resort, there are fewer heavy hitters from politics. Russia’s war in Ukraine and tensions between the US and China have made feel-good appearances at the event in the Alps awkward.

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The lack of snow on the slopes is a reminder of the climate crisis that will dominate much of the discussions. Concerns about political stability are also high on the agenda and other topics will include the end of the era of cheap money and food and energy security.

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Tune into Bloomberg Television for interviews with UBS CEO Ralph Hamers, OPEC Secretary General Haitham Al-Ghais, Chevron CEO Mike Wirth and German Economy Minister Robert Habeck, among many others. German Chancellor Olaf Scholz will also be speaking to Bloomberg TV from our studio in Berlin.

Key Developments

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(All times CET)

ECB’s Centeno Upbeat on Economy (9 a.m.)

European Central Bank Governing Council member Mario Centeno said the euro-area economy is performing better than many anticipated in the face of record inflation and the energy crisis that erupted after Russia attacked Ukraine.

“The economy has been surprising us quarter after quarter,” he told a panel hosted by Bloomberg TV’s Francine Lacqua. “The fourth quarter in Europe will be most likely still positive. Maybe we’ll be surprised also in the first half of the year.”

Habeck Says Trade War Risk ‘Very High’ (8 a.m.)

Germany’s Habeck warned that the risk of additional trade wars is “very high” as countries increasingly look inward amid global insecurity and said that the WEF can be an effective forum for discussions that could help avert such disputes.

“We have seen with some countries that they have chosen isolation or confrontation,” Habeck said in an interview with Germany’s Deutschlandfunk radio from Davos, adding that China had pursued “very aggressive policies in recent years.” If other nations in Europe or the Americas chose to do the same “then we won’t be able to solve the world’s problems,” he said.

EU-US Trade War Must be Averted: Sanchez (8 a.m.)

The European Union must reform its industrial state-aid policies while also seeking an agreement with the US to avert a trade war, according to Spanish Prime Minister Pedro Sánchez.

It’s “mandatory for the US and the EU” to reach an agreement on industrial policy, Sánchez said in an interview with CNBC. The EU has some internal “homework” to do, including reducing bureaucracy and reform rules for state-aid to industries, he said.

Climate Must be Priority: Forrest (8 a.m.)

There’s a rump of Davos attendees who are still too focused on inflation, interest rates and temporary economic factors when they should be looking at the climate crisis, according to mining billionaire Andrew Forrest.

Companies that are “going hard into green energy, know full well that that is going to bring down the cost of energy and increase the standard of living and that will bring down inflation,” Forrest told Bloomberg, adding that the worst of Europe’s energy crisis is over. “People have started to get used to it but what they also got used to either subconsciously or consciously is that the era of fossil fuels is over,” the iron ore magnate said.

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