Reuters World News - 'Name-calling phase' of debt ceiling talks - is a deal possible?

Episode Date: May 22, 2023

Gridlock over the U.S. debt ceiling as Biden and McCarthy are set to meet - can a deal get done? Russia says Bakhmut captured after the bloodiest battle of the 15-month war - now what? Plus, Greek election results and Canadian wildfires. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt-out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, as the U.S. debt ceiling expiration looms, what are the chances of an 11th hour deal? In Serbia, thousands protest after two rare deadly shootings. Is gun amnesty and stricter regulations enough to calm the outrage? And in Italy, a legal battle over the fortune of Fiat's founder. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes. I'm Carmel Crimmons in Dublin. And I'm Christopher Walgesper in Chicago. We start in Bachmoud. Russia is claiming victory in the Ukrainian city.

Its capture, if confirmed, would give Moscow its first big victory after months of fighting. Rachel Armstrong, Reuters editor for Europe, explains what this could mean. The big question now is, well, what does Russia do next? Normally in a war, if you take a city, you consolidate control, you use it as a base to push on from. Here it was the Wagner army that took the city. The head of Wagner, Yvgeny Pugosin, has indicated his fighters will pull out, handover control to the official Russian military. If that happens, that won't be an easy handover.

And it's not clear how easily they could push on to take other nearby towns. Ukraine is still fighting around the flanks of the city. Does Russia want to try and put a lot of resources into mounting an offensive beyond backmute? If, as we're led to believe, Ukraine is about to launch a major counter-offensive in the south of Ukraine. And now a look at some of the newsmaking headlines elsewhere around the world. Greece could be on the verge of another election after Conservative Prime Minister Kyriakos Misotakas's centre-right party fell short of an absolute majority in weekend elections. Mitsotakas unexpectedly increased his party's share of the vote and is expected to call a second

election this summer to try and secure an outright win. Firefighters in Canada's western Alberta province are hoping cooler temperatures and thunderstorms will aid the battle against raging wildfires. Alberta's residents are facing energy production cuts, home evacuations, and poor air quality due to the fires. We are less than two weeks from when the U.S. could default on its debt. Both congressional Republicans and President Biden have been in gridlock. Scott Malone is here to explain where these negotiations stand.

Yeah, for a lot of the last 48 hours, we've been in really kind of the name-calling phase of negotiations. Biden and McCarthy are set to meet later today, and they have a lot of areas that they need to find agreement on. Now, further complicating the matter is they've got to get a deal done and pass through Congress, right? Yeah, so it can take a week to get a bill through Congress if everybody doesn't want to cooperate. So that really compresses the time frame that Biden and McCarthy have to negotiate. So how are markets reacting to those down-to-the-wire debt talks? Well, US stock futures are pointing to a cautious open. The dollar is down against the euro and the yen, and oil prices are slipping. Investors are fearful that we could be pushed right to the June

deadline before we get an agreement. The one bright spot among equity markets? China. Why is that? Well, the mood music out of the weekend G7 summit was much gentler on China than some had feared. The emphasis was on derisking, not decoupling economic ties. Beijing, meanwhile, is stepping up its dispute with the United States. Its same products made by U.S. chipmaker Micron technology are a national security risk, and it's banning them from key infrastructure projects in China. As the debt ceiling fight drags on in D.C., conservative lawmakers are demanding cuts to federal spending. But back home, those same budget hawks are touting local infrastructure improvements, paid for by the same federal dollars they're trying to slash. Our correspondent Andy Sullivan

visited Lake Charles, Louisiana to see how this tension is playing out. Andy, tell me what you heard. So Lake Charles, it got flattened by hurricanes and other storms a few years ago. So I spoke with a lot of local officials and they're saying, we understand the abstract concept of getting the U.S. budget under control. But, man, please don't cut education. Please don't cut transportation dollars. We need a new highway bridge over the lake there.

We need more money for affordable housing. because we still haven't rebuilt the housing that was destroyed during the hurricane. And this isn't unique to Louisiana, right? There are other Republican states in the same situation? Yeah, I mean, broadly in the United States, a lot of this money goes to conservative areas, which tend to be poorer, tend to get more money for things like low-income schools. And on the whole, Republican states get more money back for their dollar

than do a Democratic-leaning blue states. And Louisiana is really, really at the top. of that list. It gets a lot of federal money. It's about $2.62 for every dollar they pay in tax. By contrast, Democratic-leaning states get less than $2 back for every dollar they pay. Now, if President Biden agrees to some of these spending cuts, how might that play out for the people you met in Lake Charles? Well, broadly speaking, there will be less money to go around. We don't know the details. We had this scenario about a decade ago. Within a few years, Congress had basically abandoned that deal and agreed to spend more money because at the end of the day, people like spending

money. Serbians have been demonstrating for weeks now following two deadly shootings. They're demanding greater action from the government. Our correspondent Alexander Vasevich was at a recent rally and is here to explain why this has touched such a nerve in Serbia. Alexander, tell us about the outcry. Okay. There are several elements of it. First of all, the people are protesting against this particular trend of violence mainly in reality shows which are immensely popular, but also in the major tabloids. They also demand resignation of the Interior Minister and the head of the State Security Agency because of their failure to introduce more public safety in the country,

which is clearly awashed with weapons that remained over decades of war in this region. There are a lot of guns in Serbia. Serbia is known as a pro-gun society, but the government has taken some immediate steps. Indeed. Serbia already had a fairly, fairly strict gun law, but since there are so many illegal weaponry among the people, the government offered gun amnesty where people can surrender weapons of all kinds, no questions asked. They introduced a ban on gun permits for two years, and they said they will tighten controls for all licensed gun owners, hunters and sports shooters included, and even a harsher penalties for owning illegal weapons of up to 15 years in jail. Can you tell us about some of the weapons that have been turned in so far? Okay.

So far, people surrendered over 20,000. thousand pieces of weapons, literally everything from assault rifles, submachine guns, heavy machine guns, pistols, hunting weapons of all sorts, and even hand grenades and anti-tank launchers. And now to Turin, where the estate of the Italian auto giant Gianni Aneli is at the center of a family dispute. Here to explain the fight is our lead writer for Italy, Keith Weir. Keith, why is this fiat-fueled fortune being fought over in court? Yes, so this goes back to the estate of Janine Eni, who was one of the most glamorous figures in the Italian post-war business scene, died in 2003. And when he died, his daughter Margarita got €1.2 billion in property, artworks and other liquid assets.

But as part of the settlement, John Elkan, who is her eldest son, her eldest of actually eight children, he basically took over the running of the family business. And as Mother Margarita, she got effectively taken out of the... equation when it comes to the business. So John now is the kind of figurehead of the family business, the chairman of Ferrari. But now she wants to revisit that deal. Yes, that's right. What Margarita wants to do is get a better deal for her five children from her second marriage. Margarita's lawyers are arguing, too, that they're actually hidden assets in her father's estate, which weren't known to her when she signed this settlement. The argument on Elkan side, basically is that when the settlement was made in 2004,

Fiat was in a really parlous condition and it's now part of a very successful car business, the widest Stalantis groups. So the valuation of that part of the business has rocketed from where it was two decades ago. The kind of argument is that she suddenly realized that the business is now worth an awful lot more than it was when the deal was done.

There are some other big-name brands at play here as well, right? Yes, that's right. John Elkan is the chairman of Ferrari and obviously famous for its Formula One team. The Eni family have long been associated with Juventus, the most successful soccer club in Italian history. Also, of course, the Fiat brand which John chairs. So could this court case impact Fiat, Ferrari, any of those brands? Well, our understanding is this really comes down to money rather than an attempt to kind of grab the steering wheel of Fiat or Ferrari. She could end up trying to claim a stake in one of the businesses,

but our understanding is she doesn't want to run the business. So ultimately, it's more a family rift over an estate rather than a battle for control of the actual underlying businesses. That's it for today's edition of Reuters World News. We'll be back tomorrow. To get all our shows in your podcast feed, make sure to follow us on your favourite platform or download the Reuters app.