Business News at a Glance
Posted June 21, 2018 10:38 p.m. EDT
Greece Prepares to Stagger Back From Debt Crisis, the End of Bailouts in Sight
European leaders announced early Friday a plan that would finally take Greece off financial life support, effectively declaring an end to a regional debt crisis that nearly destroyed the euro. The deal reduces Greece’s dependence on its fellow European countries and on the International Monetary Fund, more than eight years after the Continent was plunged into a deep financial crisis that created lasting political fissures. Greece and several other countries in southern Europe were forced to impose painful austerity measures in return for bailouts from their richer northern neighbors. The actions included cutting pensions, raising taxes and in some cases even selling off public assets.
Intel CEO Resigns After Relationship With Employee
For decades, Intel was one of the most predictable players in the technology industry. On Thursday, the semiconductor-maker blindsided everyone with the abrupt resignation of its chief executive. Intel, a Silicon Valley giant whose semiconductors power most computers, said Thursday that its chief executive, Brian Krzanich, resigned over a past consensual relationship with an Intel employee. The company said Krzanich, 58, had violated a non-fraternization policy that applies to managers. An Intel spokesman declined to provide additional details. Robert Swan, Intel’s chief financial officer, was appointed interim chief executive while the company conducts a search for a permanent replacement.
Biggest Banks Pass Fed’s Stress Tests
The nation’s biggest banks are strong enough to continue lending if the economy plunges into a severe downturn, an assessment by the Federal Reserve on Thursday that could fuel Wall Street’s calls to further relax financial regulations. The results of the first phase of the Fed’s annual “stress tests” showed that the country’s banks have more than enough capital to survive the combination of a recession, cratering of housing prices and double-digit unemployment. The banks are riding high thanks to tax cuts and recent moves to soften regulations.
Europe Strikes Back Against Trump Tariffs as Global Trade War Escalates
The European Union fought back Thursday against the Trump administration’s tariffs, slapping penalties on $3.2 billion of U.S. products that target the president’s political base, like bourbon, motorcycles and orange juice. The European counterattack, a response to the administration’s measures on steel and aluminum imports, adds another front to a trade war that has engulfed allies and adversaries around the world. China and Mexico have retaliated with their own tariffs, and Canada, Japan and Turkey are readying similar offensives. The risk of escalation is high since President Donald Trump has promised even more tariffs.
In Hitting China on Trade, Trump Is Seen Neglecting U.S. Emerging Industries
Behind the White House’s plan to punish China with tariffs and other restrictions is a growing concern that Beijing is using industrial policy to dominate industries of the future, at the expense of the United States and other nations. On Thursday, the Trump administration laid out its case in a 35-page report that exhaustively details the steps Chinese officials take to protect and promote their domestic industries and disadvantage foreign competitors. But it has yet to detail how it plans to build U.S. dominance in industries that will power economic and job growth in the future, or cultivate what the administration officials call the “crown jewels of American technology and intellectual property.”
Supreme Court Clears Way to Collect Sales Tax From Web Retailers
Americans have done more and more of their shopping online in recent years, drawn by the prices, selection and convenience. But e-commerce has also had another edge: Many of those sales were, in effect, tax-free. The Supreme Court on Thursday ruled that internet retailers can be required to collect sales taxes even in states where they have no physical presence. The decision was a victory for brick-and-mortar businesses that have long complained they are at a disadvantage by having to charge sales taxes. It was also a victory for states that said they are missing out on tens of billions of dollars.
Trumps and Kushners Cut Ties on Hotel Deals That Raised Eyebrows
The Trumps’ and the Kushners’ family businesses are parting ways on hotel collaborations in New Jersey, according to people briefed on the situation. Kushner Cos. and the Trump Organization recently dropped plans for the Trumps to manage an oceanfront hotel the Kushners are building at the Jersey Shore. The companies also terminated an arrangement that had the Trumps managing a hotel outside New York City. Ethics watchdogs had taken aim at President Donald Trump and Jared Kushner, the president’s senior adviser and son-in-law, for retaining stakes in their family businesses while the companies were financially entangled in New Jersey.
A Day Care and a Hair Salon: On Facebook, They Were Political Ads
What do a day care center, a vegetarian restaurant, a hair salon, an outdoor clothing maker and an investigative news publisher have in common? To Facebook, they looked like political activists. Facing criticism over its failure to prevent foreign interference during the 2016 election, the social network recently adopted rules to make its advertising service harder to exploit. Advertisers who want to buy political ads in the U.S. must first prove they live in the country, and mark their ads with a “paid for by” disclaimer. But many advertisers, including small businesses and news organizations, are complaining that Facebook’s detection system has mistakenly miscategorized their ads as political.