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Continued growth in Germany, coupled with Spain’s strongest economic performance in nearly two years, drove euro-area GDP growth to 0.6 percent in the second quarter. The improvement is spreading: France and Italy joined the upswing, and growth in Eastern Europe exceeded expectations. The euro area’s economic revival and steadily declining unemployment have lifted business confidence to a decade high. — Andy Reinhardt
Brexit border. In its second position paper in two days, the U.K. laid out its vision for how post-Brexit Britain will exist alongside Ireland. The government said re-establishing a physical border would be “completely unacceptable” and says it wants to avoid customs checks. Ireland replied that it sees the soft-border proposal as a “step forward” but that it doesn’t want to be used as a pawn in Britain’s Brexit negotiations with the EU.
Highly placed critic. President Trump tweeted this morning that Amazon.com Inc. is hurting “tax paying retailers” and killing jobs across America. Amazon shares fell 5 percent. While it’s unclear what prompted Trump’s tweet, the Washington Post—owned by Amazon Chief Executive Officer Jeff Bezos—ran a scathing editorial about Trump Wednesday. Amazon is currently fighting the European Union over its tax bill.
Russian woes. Bank Otkritie, Russia’s largest private bank, lost $1.7 billion in deposits in June. Its largest shareholder was forced to address rumors about the bank’s stability, and the bank is now in talks with a potential investor about a capital injection. Meanwhile, a Russian rating agency says a cull that has shut one in three banks since 2014 isn’t over yet—and if bank owners don’t recapitalize, the state may have to intervene.
Investment worries. Norway’s domestic wealth fund is cutting risk by buying shorter-maturity debt and moving to safer sectors. After a market rally that lasted years, big active bets are losing their luster for the 220 billion-krone ($28 billion) Government Pension Fund Norway. “It’s been a long cycle,” CEO Olaug Svarva said. “Pricing makes us think that it’s natural to realize some profits.”
Spain on the mend. The good times are back for Madrid’s long-suffering property market. Housing starts dropped 96 percent from 2006 to 2013, after an economic crash and a bank crisis. But satellite images show 250 cranes now deployed in the city, a 5 percent increase from a year earlier, as builders respond to demand for new houses. The government forecasts the Spanish building industry will grow about 4 percent per year through 2020.
Floating monsters. The hulking container ships that transport sneakers, bananas, and Barbie dolls around the world keep getting bigger. So are the companies that own them. A massive consolidation is underway in the $500 billion global shipping industry and the survivors now enjoy big economies of scale and increased demand.
Compiled by Andy Reinhardt and Leila Taha