Good morning. We’re covering an energy deal in Europe and I.M.F. warnings of a looming global recession.
E.U. agrees to cut gas use
European Union energy ministers reached a deal yesterday to reduce their natural gas consumption by 15 percent, an effort to blunt Moscow’s ability to use energy as leverage.
The deal is initially voluntary, and some member countries are exempt. Nations will have to agree that there’s a broader energy supply emergency to make the measures mandatory.
Still, the quick compromise signified an important step in managing the E.U.’s dependency on Russia. It is intended to avert an energy meltdown as the Kremlin tries to punish Europe for its support of Ukraine.
The agreement came less than 24 hours after the Russian gas company Gazprom said that it would further reduce the amount of natural gas it sends to Germany through the Nord Stream 1 pipeline. Russian gas, which supplies 40 percent of the E.U.’s consumption, was less than one-third the normal average in June.
Germany: The E.U.’s largest economy is turning to liquefied natural gas, which it had once disregarded, to keep warm through the winter.
Space: Russia said it would leave the International Space Station after 2024, a potential end to two decades of space cooperation with the U.S.
Diplomacy: Lawyers for the U.S. basketball star Brittney Griner made a case for leniency yesterday. Griner, who is detained in Russia on drug charges, may testify today. In Britain, the Foreign Office froze the assets of a blogger yesterday for his pro-Kremlin propaganda.
An imminent global recession?
The International Monetary Fund said the world could be on the brink of a recession.
The economies of the U.S., China and Europe have slowed more sharply than anticipated, the group said in a new report. It said that 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.
Global economic prospects have darkened amid war in Ukraine, inflation and a resurgent pandemic. If the threats continue to intensify, the world economy will face one of its weakest years since 1970, a period of intense global stagflation.
Growth: The I.M.F. downgraded global forecasts from its April projections, predicting that output would fall from 6.1 percent last year to 3.2 percent this year. Growth is expected to slow even further in 2023 as central banks raise interest rates to tame inflation.
Inflation: The I.M.F. expects prices to rise 6.6 percent in rich countries and 9.5 percent in emerging markets and developing economies.
Our Coverage of the Russia-Ukraine War
The U.S.: The Fed is expected to raise interest rates by three-quarters of a percentage point today. The I.M.F. said some indicators suggested that the U.S. was in a “technical” recession, though economists say the country doesn’t meet the formal definition.
A new Constitution in Tunisia
The referendum could spell the end of a young democracy. The Arab Spring uprisings began in Tunisia more than a decade ago. At the time, the country was internationally lauded as the only democracy to survive the revolts.
But in the years since, many Tunisians have come to view the government as corrupt and inadequate. In 2019, frustration with political paralysis and economic devastation led many to look to Saied, a political outsider at the time. That same anger drove some voters to vote yes on the referendum this week.
“If you tell me about democracy or human rights and all that stuff, we haven’t seen any of it in the last 10 years,” a 50-year-old bank employee said. He said he did not mind the Constitution’s concentration of powers in the hands of the president. “A boat needs one captain,” he said. “Personally, I need one captain.”
Context: The Constitution was approved by 94.6 percent of voters, according to the results released yesterday. But most major parties boycotted the vote to avoid lending it greater legitimacy.
Background: Saied suspended Parliament and fired his prime minister a year ago, effectively giving himself almost absolute power.
Details: The new Constitution demotes the Legislature and the judiciary to something more akin to civil servants. It weakens Parliament and gives the president ultimate authority to form a government, appoint judges and present laws.
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The Booker Prizes
American authors dominate the list of Booker Prize nominees this year: Six of the 13 writers competing for the prestigious literary award are from the U.S.
Until 2014, the prize was only open to authors from Britain, Ireland, the Commonwealth and Zimbabwe. Since eligibility was expanded to include authors of any nationality, Britain’s literary establishment has regularly agonized over the dominance of American authors.
This year’s list is likely to reinvigorate those concerns, although the nominees also include three British and two Irish authors, as well as NoViolet Bulawayo of Zimbabwe and Shehan Karunatilaka of Sri Lanka.
The winning novel and its author — who will receive a prize of 50,000 pounds, or about $60,000 — will be announced on Oct. 17 at a ceremony in London.
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