The EU’s economic recovery is “highly uncertain” because its handling of Covid-19 and the vaccination programme has caused inequality to grow both across and within countries, International Monetary Fund chief Kristalina Georgieva told a online seminar on Monday.
The Washington-based lender expects the EU to grow by 4.2 per cent this year. However, Ms Georgieva said her greatest concern is that “the great lockdown of 2020” could morph into “a great divergence in 2021”, with poorer countries losing out, including Europe’s traditional tourist destinations.
“Divergence is most profound in the developing world where half of the countries that used to catch up in income levels with their wealthier peers are now falling further behind,” Ms Georgieva told delegates attending the European Semester Inter-Parliamentary Conference on Stability, Economic Co-ordination and Governance in the EU. "But it is a risk for the EU as well.”
The IMF chief said traditional tourist destinations such as Spain, Greece and Italy suffered much sharper contractions of more than 9 per cent, higher than the 6.4 per cent decline recorded across the EU.
“We project that by the end of 2022, per capita income for the emerging markets of Central and Eastern Europe will be 3.8 per cent below pre-crisis projections, compared to a shortfall of just 1.3 per cent for the EU’s advanced economies – a negative impact almost three times larger that will slow the pace of convergence,” said Ms Georgieva.
Last month, the IMF revised its 2021 growth estimate for the global economy to 5.5 per cent, 0.3 per cent higher than the fund's estimate in October, on the back of the Covid-19 vaccination drive and support measures put in place by the world's largest economies.
That follows last year's 3.5 per cent contraction that brought the travel industry to a standstill, disrupted trade and led to lockdowns around the world that raised unemployment and poverty levels.
“In 2020, 90 per cent of countries finished the year with a smaller economy than at the start of it — the worst performance the world has had during peacetime,” said Ms Georgieva.
To tackle the threat of divergence in the EU’s economic recovery and around the globe, Ms Georgieva set out a three-point plan to help policymakers ensure a strong recovery.
Her first suggestion is to “end the health crisis” by placing vaccine campaigns at the heart of economic policy.
“Until we defeat the pandemic everywhere, we risk new mutations that threaten our progress. Scaling up production and distribution of vaccines are critical. So, too, is additional financing to secure doses and pay for logistics, as well as timely reallocation of excess supplies,” she said.
Her second suggestion is to “fight the economic crisis” by ensuring that support for companies and households continues “until the pandemic is defeated”.
The eurozone economy contracted less than expected during the fourth quarter of 2020, declining by 0.6 per cent from the previous quarter, while unemployment was flat at 8.3 per cent, partly protected by government programmes that pay the wages of furloughed workers.
Meanwhile, the European Central Bank kept interest rates and its stimulus package unchanged in January, with ECB president Christine Lagarde holding the pandemic bond-buying programme at €1.85 trillion ($2.24tn) after a €500bn boost in December.
Ms Georgieva praised Ms Lagarde and the ECB “for reacting swiftly with extraordinary policy accommodation”, and said while now is not the time to withdraw support, it is the right time to assess the “strength of insolvency regimes”.
“Gradual withdrawal has to follow, not precede, a durable exit from the health crisis. It matters internally, and also in terms of spillovers — a premature tightening of policy when worse-hit economies are still deeply fragile could exacerbate divergence between countries,” she said.
While support programmes led to lowerv-than-average bankruptcies last year, there remains a risk of a higher rate of debt defaults once that support declines.
“Insolvency arrangements and greater emphasis on equity support could help prevent debt overhangs and ratcheting bankruptcies,” said Ms Georgieva.
Her third suggestion is for policymakers to hasten the shift to digitisation and "greening" of the economy.
A co-ordinated green infrastructure investment push could boost global gross domestic product by more than 0.7 per cent annually over a 15-year period, according to the IMF, creating millions of new jobs.
“The Next Generation EU [fund] can be more than a catalyst for economic transformation: it can be a forerunner to new shared fiscal tools to complement the ECB’s single monetary policy,” said Ms Georgieva.
The IMF has provided $105bn in new financing to 85 countries since the crisis began, including to the European nations of Albania, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, North Macedonia and Ukraine.
Ms Georgieva said the lender is now working closely with the EU to do more for low-income countries that “face painful choices between tackling the health crisis, meeting peoples’ basic needs and fostering macroeconomic stability, and boosting public investment that is essential for sustainable growth”.
She lauded the EU’s efforts to help vulnerable countries during the crisis and, in reference to Britain’s exit from the bloc on December 31, said the EU was “one of the best inventions of the 20th century”.
“Its values of solidarity and inclusion remain the 21st century’s best hope,” said Ms Georgieva.
Iran's dirty tricks to dodge sanctions
There’s increased scrutiny on the tricks being used to keep commodities flowing to and from blacklisted countries. Here’s a description of how some work.
1 Going Dark
A common method to transport Iranian oil with stealth is to turn off the Automatic Identification System, an electronic device that pinpoints a ship’s location. Known as going dark, a vessel flicks the switch before berthing and typically reappears days later, masking the location of its load or discharge port.
2. Ship-to-Ship Transfers
A first vessel will take its clandestine cargo away from the country in question before transferring it to a waiting ship, all of this happening out of sight. The vessels will then sail in different directions. For about a third of Iranian exports, more than one tanker typically handles a load before it’s delivered to its final destination, analysts say.
3. Fake Destinations
Signaling the wrong destination to load or unload is another technique. Ships that intend to take cargo from Iran may indicate their loading ports in sanction-free places like Iraq. Ships can keep changing their destinations and end up not berthing at any of them.
4. Rebranded Barrels
Iranian barrels can also be rebranded as oil from a nation free from sanctions such as Iraq. The countries share fields along their border and the crude has similar characteristics. Oil from these deposits can be trucked out to another port and documents forged to hide Iran as the origin.
* Bloomberg
Saudi Cup race day
Schedule in UAE time
5pm: Mohamed Yousuf Naghi Motors Cup (Turf), 5.35pm: 1351 Cup (T), 6.10pm: Longines Turf Handicap (T), 6.45pm: Obaiya Arabian Classic for Purebred Arabians (Dirt), 7.30pm: Jockey Club Handicap (D), 8.10pm: Samba Saudi Derby (D), 8.50pm: Saudia Sprint (D), 9.40pm: Saudi Cup (D)
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Zayed Sustainability Prize
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Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
UAE currency: the story behind the money in your pockets
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Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
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Killing of Qassem Suleimani
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Opening day UAE Premiership fixtures, Friday, September 22:
- Dubai Sports City Eagles v Dubai Exiles
- Dubai Hurricanes v Abu Dhabi Saracens
- Jebel Ali Dragons v Abu Dhabi Harlequins
Uefa Champions League last 16 draw
Juventus v Tottenham Hotspur
Basel v Manchester City
Sevilla v Manchester United
Porto v Liverpool
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Shakhtar Donetsk v Roma
Chelsea v Barcelona
Bayern Munich v Besiktas
England XI for second Test
Rory Burns, Keaton Jennings, Ben Stokes, Joe Root (c), Jos Buttler, Moeen Ali, Ben Foakes (wk), Sam Curran, Adil Rashid, Jack Leach, James Anderson
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UAE SQUAD
Goalkeepers: Ali Khaseif, Fahad Al Dhanhani, Mohammed Al Shamsi, Adel Al Hosani
Defenders: Bandar Al Ahbabi, Shaheen Abdulrahman, Walid Abbas, Mahmoud Khamis, Mohammed Barghash, Khalifa Al Hammadi, Hassan Al Mahrami, Yousef Jaber, Salem Rashid, Mohammed Al Attas, Alhassan Saleh
Midfielders: Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Majed Hassan, Yahya Nader, Ahmed Barman, Abdullah Hamad, Khalfan Mubarak, Khalil Al Hammadi, Tahnoun Al Zaabi, Harib Abdallah, Mohammed Jumah, Yahya Al Ghassani
Forwards: Fabio De Lima, Caio Canedo, Ali Saleh, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri
Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
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Killing of Qassem Suleimani
Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
