We’re covering an E.U. agreement to reduce natural gas consumption and warnings of a global recession.
E.U. agrees to cut gas consumption
The E.U. agreed to a deal to curb natural gas consumption starting next week, the latest show of solidarity in its efforts to punish Russia for its invasion of Ukraine.
The cuts, which aim for savings of up to 15 percent by the spring, are meant to blunt Russia’s ability to use its energy sources as a political weapon. For now, the reductions will be voluntary, but they could become binding should an energy supply crunch cause an emergency.
Twenty-six of the 27 E.U. states agreed to the deal, diplomats involved in the process said, with the only holdout being Hungary, which had been slow to agree to sanctions before.
The agreement came less than 24 hours after Russia’s state-owned gas monopoly, Gazprom, said that it would further reduce the amount of natural gas it sends to Germany, Europe’s biggest consumer of Russian gas.
I.M.F. warns of global recession
The world could soon be on the brink of a global recession as the economies of the U.S., China and Europe slowed more sharply than anticipated, the I.M.F. said in a new report.
It said the probability of a recession starting in one of the Group of 7 advanced economies was now nearly 15 percent, four times its usual level. And it said some indicators suggested that the U.S. was already in a “technical” recession, though most economists didn’t think it yet met the formal definition.
The I.M.F. downgraded its global growth forecasts from its April projections, predicting that output would fall to 3.2 percent in 2022 from 6.1 percent last year. Growth is expected to slow even further next year as central banks around the world raise interest rates in an effort to tame inflation.
“The world may soon be teetering on the edge of a global recession, only two years after the last one,” Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, wrote. Put simply, the outlook for the global economy is “increasingly gloomy,” he added.
Related: U.S. Federal Reserve officials are set to make a second abnormally large interest rate increase this week as they race to cool down an overheating economy.
U.S. concern for Taiwan grows
The Biden administration is increasingly worried that China will take military action in or around Taiwan in the next year and a half as Chinese activity around the self-governing island has grown more aggressive.
U.S. officials are particularly concerned that China will act to cut off access to all or part of the Taiwan Strait, through which U.S. naval ships regularly pass. Chinese officials have repeatedly asserted this summer that no part of the Taiwan Strait can be considered international waters, with a spokesman for the foreign ministry stating that “China has sovereignty, sovereign rights and jurisdiction over the Taiwan Strait.”
The anxiety has sharpened in recent days as the administration has quietly attempted to dissuade Nancy Pelosi from going through with a proposed visit to Taiwan next month, which would be the first by a U.S. House Speaker since 1997. Her plans have been repeatedly denounced by the Chinese government, which has threatened to retaliate.
The timing of her visit is particularly worrying, American officials say, as Xi Jinping, China’s leader, prepares in the coming weeks for an important political meeting in which he is expected to extend his rule.
Analysis: American officials said a sea-and-air invasion of Taiwan would be difficult for China to pull off in the near term. Instead, it could do so piecemeal, perhaps by first invoking its recent declaration on the status of the Taiwan Strait and conducting a limited operation to gauge Washington’s reaction.
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