Bloomberg Businessweek-Europe Edition August 19, 2019

● The U.S. fiscal deficit grew to almost $867b for the first 10 months of the fiscal year, exceeding the figure for all of last year. Republican tax cuts, increased federal spending, and an aging population have contributed to the strain. ● Argentina’s stocks, bonds, and currency fell after President Mauricio Macri lost in primary elections. Investors fear his shock upset on Aug. 12 may set the stage for a populist government that could seek to renegotiate billions in foreign currency debt and hard-won agreements with the IMF. ▷ 32 ● On Aug. 14 the yield on 10-year U.S. Treasury notes briefly dropped below that of 2-year notes. That reversal, known as a yield curve inversion, is considered a sign that a recession will occur within about 18 months. By the market’s close,…

▶ Retail Therapy in a Trade War A busy week beckons for retailers, with Home Depot, Gap, Kohl’s, and TJX all reporting numbers on Aug. 20. To keep consumers happy, President Trump said on Aug. 13 that he will delay tariffs until mid-December on some products that are holiday-season favorites. ▶ On Aug. 19, German Chancellor Angela Merkel meets Hungarian Prime Minister Viktor Orban in Sopron, which played a key role in the Iron Curtain’s fall. ▶ France hosts the Group of Seven meeting on Aug. 24-26 in Biarritz, with President Trump attending amid increasingly frayed trans-Atlantic relations. ▶ BHP Group releases earnings on Aug. 20. Demand for copper and iron ore at the world’s biggest miner provides a barometer for economic growth. ▶ Nauru, the world’s smallest island nation, whose fertilizer reserves once…

When a government makes emergency plans to safeguard water supplies, stockpile vital medicines, manage food shortages, prepare for civil unrest, suspend the legislature, and exploit arcane procedures to stay in power, things aren’t going great. For British Prime Minister Boris Johnson, it’s evidently all part of the plan. He came into office in July vowing to leave the European Union on Oct. 31, with or without a withdrawal agreement. Since then his government has been shifting cash around, reassigning civil servants, initiating a huge propaganda campaign, and noisily affirming its pledge to pursue a no-deal Brexit if needed. This apparent commitment to self-harm has a certain logic. It might induce the EU to offer more concessions to Johnson’s negotiators and produce a revised exit agreement that Parliament could assent to. Or…

When U.K. Prime Minister Margaret Thatcher agreed in 1984 to return Hong Kong to China, it wasn’t clear who would end up changing whom. The People’s Republic was still in the early days of the most dramatic economic transformation in modern history, opening for the first time in decades to money, people, and ideas from abroad. Hong Kong, freewheeling and prosperous, boasted plenty of what China’s reformers seemed to want: wealth, of course, but also order and stability, guaranteed by a colonial government that offered clean courts and some individual rights without ever flirting with true electoral democracy. “One country, two systems,” shorthand for Beijing’s pledge to maintain the city’s political character for 50 years after the 1997 British turnover, contained within it the possibility that by the time 2047…

As chief executive officer of Unilever, Paul Polman transformed the sprawling maker of Dove soap, Knorr stock cubes, Cif cleaning sprays, and Hellmann’s mayonnaise into a test bed for the idea that companies can benefit from affiliation with social causes, such as improved hygiene or better access to toilets. While investors and analysts were initially skeptical, Polman was ultimately lauded for redefining the corporation as something more benign than a purely profit-driven enterprise, even as margins edged up slightly from the midteens to almost 20% during his tenure. Now, Alan Jope, the Scotsman who succeeded Polman in January, is amping up the strategy. To set Unilever apart and combat what Jope calls “woke-washing”—the social responsibility equivalent of bogus “greenwashing” campaigns aimed at appearing environmentally conscious—he’s raising the volume on the message.…

France has long been known for having some heavy-handed regulations, whether requiring many stores to stay closed on Sunday or allowing judges to veto children’s names. But some of the most arcane have involved the nation’s television business. National broadcasters such as TF1 and M6 aren’t allowed to show movies on Wednesday, Friday, and Saturday during prime time and can’t run ads for books, movies, or sales at retailers. And unlike broadcasters in all other European markets, according to Bank of America Merrill Lynch, they aren’t even allowed to tailor ads to the location or demographics of their viewers, a routine practice in the digital age. Some rules were designed in part to protect French cinema and keep people going to movie theaters. The country—host of the Cannes Film Festival, known…