LISBON – Ryanair’s Portuguese cabin staff will go on strike for three days in late June, Portugal’s union of civil aviation personnel SNPVAC said on Tuesday.

The workers, demanding compliance with Portuguese law and better working conditions, will walk out on June 24, 25 and 26, SNPVAC said in a statement.

“This mobilisation is not only an opportunity to put the spotlight on multiple attacks on workers’ dignity and to make this reality known but also a moment to show unity and solidarity against dumping”, the union added.

Ryanair did not immediately reply to a Reuters request for comment.

The announcement came a day after Ryanair’s Spanish cabin announced a six-day strike planned for late June and early July.

French cabin crew at Ryanair went on strike on Sunday and Monday demanding better pay and working conditions, a union representative said earlier, adding that more than 40 flights had to be cancelled.

(Reporting by Patrícia Vicente Rua; Editing by Catarina Demony and Louise Heavens)

By Howard Schneider

WASHINGTON – Federal Reserve Chair Jerome Powell used his first four years as the world’s top central banker to reshape U.S. monetary policy around the idea that low inflation and low unemployment could coexist.

It was a move intended to spread the gains of economic growth more widely and keep a focus on jobs during the rebound from the pandemic.

But the assumptions on which it rested – a relatively frictionless global economy with a well-greased supply chain; a balanced U.S. labor market with just over one open job for each unemployed person – have been shattered by events that appear to have put the Fed’s two goals of full employment and moderate inflation back in opposition.

Graphic: There and back again: Fed views of 2022 – https://graphics.reuters.com/USA-FED/SEPS/gdpzyexqmvw/chart.png

Unemployment today at 3.6% is more akin to the 1950s and 1960s, with workers exercising leverage to negotiate higher wages and, given the pandemic, better working conditions. Inflation, however, is soaring at more than 8% annually, leaving Fed officials at a crossroads over how to tame it and facing the possibility that their “narrow path” back to the pre-pandemic world of low unemployment and low inflation may have all but closed.

Fed officials are expected to raise interest rates for a third time this year on Wednesday, with a three-quarters-percentage point increase now seen as the likely outcome, with the possibility of signals for more large hikes as long as inflation keeps far overshooting their 2% target. [nL1N2Y02MC]

In new projections, they will also provide their sense of what’s at risk, and what price the economy could pay through slowing growth and higher unemployment to get inflation back into line.

A HEYDAY FOR JOBS

Arguably Powell’s approach did what was intended in the labor market. The employment rebound has been faster than many expected at the pandemic’s outset.

Distributionally, it has also helped, consistent with the Fed’s view of maximum employment as something “broad and inclusive.” Wages have risen fastest for lower-paid occupations; more Blacks and Hispanics are employed than before the pandemic, while white employment in May remained 1.6 million below February 2020’s peak.

Graphic: Minority employment surges – https://graphics.reuters.com/USA-FED/POWELL/akpezrdkbvr/chart.png

Back in March, Fed officials saw inflation receding with no unemployment rate increase, but “we’re going to see some cracks” in that story in the new projections, predicted Nomura senior U.S. economist Robert Dent. The median projected unemployment rate may just rise a couple of tenths of a percentage point in coming years, as Fed officials hang onto their view of an economy that may still revert to pre-pandemic form.

But “it is a tightrope…It would not be hard at all to see the economy tip into recession,” with joblessness rising to 5% or higher, he said. Some Fed officials have started opening the door to unemployment rates above 4%, the level policymakers roughly consider full employment.

That’s likely to fall hardest on Black and Hispanic workers, whose unemployment rates typically rise faster in downturns.

THE SAVINGS STOCKPILE

One unexpected outcome of the pandemic was a federal government response so strong that household incomes rose despite a recession. Some now argue the spending, in early 2021 in particular, left the economy with much more consumer demand than it can meet, adding to inflation.

But it also offset what would have likely been rising poverty, hunger and homelessness. A lot of it, moreover, remains in household bank accounts. Data last week showed that through the end of March cash and checking deposits continued rising, to $4.4 trillion – more than triple the pre-pandemic level.

Graphic: Households cash buffers spike – https://graphics.reuters.com/USA-FED/POWELL/gkvlgzrnapb/chart.png

That also provided a buffer: In a recent Fed household survey respondents said they are in the best financial shape ever.

But, to some degree, it may have to be spent down to fix inflation – and may make the Fed’s job harder as it gives people room to handle $5-a-gallon gas.

The relationship between excess savings, its distribution across the economy, and people’s willingness to use the cash to cover higher prices is a key issue in the Fed’s inflation puzzle.

LOW BANKRUPTCY RATES

Another pandemic shoe that never dropped: Bankruptcy rates fell as the Paycheck Protection Program and other initiatives kept firms alive.

A recession or significant slowdown may well trigger the washout that never happened. According to data from Epiq, Chapter 11 commercial filings in May increased 34% from a year earlier, though overall commercial filings were down slightly.

American Bankruptcy Institute Executive Director Amy Quackenboss in a statement said rising interest rates and higher prices had begun “compounding the economic challenges for financially distressed families and businesses.”

A RECESSION WITH NO SAFETY NET?

As a result of the unprecedented effort to keep businesses and families afloat, the federal debt exploded. While the low-inflation, low-interest-rate environment of the last quarter century or so triggered a broad rethinking about public debt, some of the dynamics that argued for aggressive spending are now moving the other way. When rates on government debt exceed the rate of economic growth, for example, elected officials may not be so willing to roll out an expansive safety net next time.

Given how soon that may occur – in a recent Reuters poll 40% of economists said they expect a downturn within two years – the Fed may also be constrained. It can cut rates, which may by then be high enough to provide a substantial economic boost. But it will still be carrying a very large balance sheet, run up to nearly $9 trillion during the pandemic, with policymakers less likely to begin using that second tool to support the economy.

(Reporting by Howard Schneider; Editing by Dan Burns)

By Ron Bousso, Marek Strzelecki, Christoph Steitz and Markus Wacket

BERLIN – Germany is struggling to find a way to wrest control of a Russian-owned refinery that supplies most of Berlin’s fuel, four people close to the matter said, fearing retaliation by Moscow if the site is nationalised and as Western firms hesitate to step in.

The PCK refinery in Schwedt, majority-owned by Russian oil giant Rosneft, is testing Germany’s resolve to eliminate imports of oil from Russia by the end of the year under fresh European sanctions to punish Moscow for its invasion of Ukraine.

The landlocked refinery is the source of 90% of Berlin’s fuel and has received all its crude from Russia via the Druzhba pipeline since the plant was built in the 1960s.

One solution considered by Germany has been to temporarily hand control of the refinery’s day-to-day operations to British oil major Shell, which owns a 37.5% stake in Schwedt, according to government and company sources.

Shell, which saw Germany block the sale of its stake in Schwedt to Rosneft last year, is willing to step in as an interim operator, two of the people said, including a company source. But it is neither interested in taking over a larger stake nor being a permanent operator, they said.

Officials have also sounded out the idea of handing operations to Polish refinery PKN Orlen which could play a key role in efforts to reroute the refinery’s crude supplies away from Russia.

PKN Orlen and Shell declined to comment. Rosneft, PCK and the Polish government did not immediately reply to requests for comment.

A spokesperson for Germany’s Economy Ministry, which is in charge of energy, said: “We are working flat out to find a solution. We know the problem and are working on it.”

Poland insists that Rosneft must be ousted from Schwedt, Germany’s fourth-largest refinery, before a potential deal including state-controlled PKN, the people said.

Rosneft, meantime, has so far refused to engage with Germany to discuss a sale of its 54.17% stake in Schwedt or any other solutions that could resolve the situation, the people said.

Italy’s Eni holds the remaining 8.33% and last month confirmed it was in the process of selling it.

“It’s not trivial to solve this,” German Economy Minister Robert Habeck said on Monday with regard to Schwedt, adding a working group had been set up to discuss its prospects.

Berlin has the option of taking control of Schwedt from Rosneft or even expropriating the firm, which it can do through energy security legislation recently updated to facilitate nationalisation.

Expropriation could spark retaliatory steps by Moscow, and the biggest fear in Germany would be that Russia cuts natural gas supplies, the people said. Europe has yet to draw up plans for how to cut dependency on Russian gas.

(Graphic: https://graphics.reuters.com/UKRAINE-CRISIS/GERMANY-OIL/myvmnqokmpr/chart_eikon.jpg)

(Graphic: https://fingfx.thomsonreuters.com/gfx/ce/gkplgqkmbvb/Druzhba.png)

Any alternative crude supply would be costly, putting further pressure on German consumers as Europe’s biggest economy struggles with recessionary risks.

The EU plans to impose an embargo on 90% of Russian crude oil imports by the year end. The plan excludes landlocked Hungary, Slovakia and the Czech Republic whose refineries get all their feedstock through the Druzhba pipeline from Russia.

Germany and Poland are gradually increasing crude supplies to Schwedt and the neighbouring TotalEnergies-owned Leuna refinery via other, smaller pipelines from the Baltic ports of Rostock and Gdansk.

Poland has offered to allocate spare capacity at its oil terminal in Gdansk and could ship sea-borne crude oil via its pipelines from the port to the two German refineries, on the condition Rosneft is removed as an owner of Schwedt.

The Gdansk terminal has room to receive as much as 36 million tonnes per year, leaving 9 million tonnes on top of the needs of Polish refiners that could be used for Germany.

Potential cooperation would include coordination of supplies and the types of crude in the pipeline system that feeds Poland’s top refinery in Plock before turning west towards Germany, so that the product yields and refining margins can be maximized.

While the alternative pipeline supplies, from Norway, the Middle East, the United States and West Africa, are expected to rise in the coming months, they cannot meet the two refineries’ full capacity of a combined 24 million tonnes of oil per year.

To plug the gap, one measure of last resort that is being considered includes the potential hiring of dozens of tanker trucks to deliver the crude oil from the two ports, two industry sources said.

For now, Schwedt and Leuna are enjoying unprecedented profit margins.

The Russian Urals crude delivered via the Druzhba pipeline is priced according to a formula calculating the grade’s average monthly price. Based on a Reuters calculation, that priced the oil at around $35 a barrel below the Brent benchmark.

While most other European refineries that are no longer buying Russian crude have seen record profits from converting crude oil into gasoline, diesel and jet fuel, the two German refineries’ margins were given a further huge boost by the cheaper crude.

The margin for Leuna and Schwedt is estimated to be at around $50 to $70 a barrel, according to several industry sources and analysts.

That translates into a daily profit of between $12 million to $16.8 million per day for each refinery, roughly $8.5 million per day more than a similar sized northwest European refinery which does not process Russian oil.

(Reporting by Ron Bousso and Shadia Nasralla in London, Marek Strzelecki in Warsaw, Christoph Steitz in Frankfurt, Stephen Jewkes in Milan and Markus Wacket, Andreas Rinke and Christian Kraemer in Berlin; editing by David Evans)

(Reuters) – Elon Musk will speak to Twitter Inc employees this week for the first time at a company-wide meeting since launching his $44 billion bid in April, a source said on Monday, citing an email from Twitter Chief Executive Parag Agrawal to staff.

The meeting is scheduled for Thursday, and Musk will take questions directly from Twitter employees, the source added.

The news, first reported by Business Insider, comes after Twitter said last week that it anticipated a shareholder vote on the sale by early August.

A Twitter spokesperson confirmed that Musk would attend the company all-hands meeting this week.

Ever since Musk’s takeover bid, many Twitter employees have expressed concerns that the billionaire’s erratic behavior could destabilize the social media company’s business, and hurt it financially.

Back in April, Agrawal was seen quelling employee anger during a company-wide meeting where staff demanded answers to how managers planned to handle an anticipated mass exodus prompted by Musk.

Last week, Musk warned Twitter that he might walk away from his deal to acquire the company, if it failed to provide the data on spam and fake accounts that he seeks.

(Reporting by Sheila Dang in New York and Akriti Sharma in Bengaluru; Additional reporting by Nishit Jogi; Editing by Subhranshu Sahu and Shailesh Kuber)

WASHINGTON -A bipartisan group of U.S. lawmakers said on Monday they had agreed on a proposal to give the government sweeping new powers to block billions in U.S. investment into China, though the measure is part of a broader bill with an uncertain future.

News of the provision, part of legislation that aims to boost U.S. competitiveness and grant chipmakers $52 billion to expand U.S. operations, drew opposition from China, which said it would only deprive the United States of opportunities.

“The refined proposal released today has bipartisan, bicameral support and addresses industry concerns,” U.S. Senators Bob Casey and John Cornyn, and Representatives Rosa DeLauro, Bill Pascrell, Jr., Michael McCaul, Brian Fitzpatrick and Victoria Spartz, said in a statement.

The measure also covered the scope of prospective activities, industries affected, and the prevention of duplicative authorities, they added.

The initial “outbound investment” proposal encountered opposition for fear it could reduce companies’ investments abroad, leading some chipmakers to oppose its inclusion in the chips bill being hammered out by Senate and House lawmakers.

Democratic Senator Mark Warner told Reuters on Monday the “the clock is ticking” on the broader chips bill.

There were “a lot of conversations”, he added, about pivoting to a bill that would only focus on subsidies for plants to make chips, potentially dropping trade and other measures aimed at helping the U.S. compete with China in science, business and technology.

The outbound investment measure, originally proposed as a standalone bill by Cornyn and Casey, was later added to the House version of a massive bill that includes the grants for chipmakers and is aimed at countering China’s rise.

Asked on Tuesday to comment on the proposal, foreign ministry spokesman Wang Wenbin said China opposed how the U.S. “over-generalised” the concept of national security and carried out investment reviews it considered “unreasonable’.

“The restrictions that U.S. politicians continue to impose on normal economic and trade co-operation between China and the United States will not hamper China’s development, but will only lead them to box themselves in and miss out on development opportunities,” he told a news conference.

The draft legislation, which would capture fewer investments than the original version, stirred opposition from critics who said it would harm American competitiveness.

The US-China Business Council said, “If such government controls were implemented on a unilateral basis, it would only hurt the flexibility and resilience of American companies.”

The draft says a new investment committee would engage with allies to coordinate and share information.

The legislation aims to give the U.S. government greater visibility into U.S. investments.

It will be mandatory to notify the government of investments that may fall under the new regulations, and the U.S. can use existing authorities to stop investments, or mitigate risk. If no action is taken, the investment can move forward.

The concept behind the measure has support within the administration of U.S. President Joe Biden.

In July, national security adviser Jake Sullivan said the government was working on new investment screening and considering outbound investment as it seeks to better position the United States for competition in technology.

A study by Rhodium said 43% of U.S. foreign direct investment transactions in China over the past two decades could have been subject to screening under the broad categories set out by the original proposal.

(Reporting by Alexandra Alper and David Shepardson in Washington; Karen Freifeld in New York; Additional reporting by Yew Lun Tian in Beijing; Editing by Richard Pullin and Clarence Fernandez)