Graeme Wearden in Davos 

Davos day one: German chancellor Scholz says Putin must not win Ukraine war, as Greenpeace protesters disrupt WEF – as it happened

Rolling coverage of the first full day of the World Economic Forum in Davos
  
  


Closing post

Events at Davos have pretty much wrapped up for the day, and so shall we until the morning.

Goodnight. GW

Fears over Trump's deregulation push

The push to water down financial regulations, particularly under President Trump, is stoking concern across Europe.

Asked about the deregulatory drive in the US, the governor of France’s central bank, François Villeroy de Galhau, hinted it could sow the seeds of the next financial crisis.

He singled out the lack of regulation on crypto-currencies and the surge in non-bank lending.

“There is room for improvement [on financial regulation] on this side of the Atlantic,” he said.

“But the idea that we should not regulate at all non-banks… that we should not regulate crypto… I think this could happen to be dangerous in the future.”

“I’m not here to forecast a financial crisis… but we know it can happen and we know it’s due to the regulating cycle: you regulate and you forget the former crisis then you deregulate and you prepare the next crisis. We will see.”

A brief run-in with the police

Security at Davos is notably tight today – perhaps due to anxiety after Greenpeace protesters got inside the Congress Centre to display a banner calling for taxes on the super-rich.

I was just meeting Marlene Engelhorn of taxmenow and Phil White of the Patriotic Millionaires, outside the Annual Meeting when the police showed up, asking for ID.

That’s even though we’re not within the confines of the WEF (although much of wider Davos has been taken over by the WEF attendees or companies piggy-backing off it).

Your humble correspondent, though, was free from suspicion as I was wearing the badge doled out by WEF that’s essential for getting into the Congress centre.

A sign of just how odd Davos is this week, as the so-called ‘global elite’ gather for their annual discussions about the state of the world.

Engelhorn and White are in Davos lobbying for a wealth tax for the super-rich, warning that the influence of the extremely wealthy is hurting democracy, and trust in the media.

Isaac Herzog, President of Israel, has just been discussing the Middle East crisis at WEF.

Herzog argues the region has a huge opportunity to change for the better, but also warns about the risks posed by Tehran.

Israel believes a “a clear message” must be sent to the Iranians, “no more”, Herzog says, in the new era that was announced yesterday (eg the inauguration of Donald Trump).

Herzog also says he is very optimistic about the future of Israel, saying its people and the nation have shown great resilience.

Key event

Ukranian president Volodymyr Zelenskyy is now taking questions, and touches on the issue of a possible peace deal.

Our strategy is that we must approach any sort of diplomacy that will lead to the end of the war.

The issue is, what does Ukraine’s security look like in that situation, he says.

If Ukraine has strong security guarantees, then there cn be a “lasting, just, strong peace” for Ukraine, for Europe, for the US, and for the whole world, he says.

But, Zelenskyy warns:

If the security guarantees are weak, and only words, then from Russia you will get only words and they will come back with war.

Zelenskyy: Europe needs military investment, and Iron Dome of its own

Ukranian president Volodymyr Zelenskyy then urges European leaders to boost their military resources, or risk sliding into irrelevence.

He ponts out that Russia can field rather more than a million soldiers. Ukraine has 800,000, but other European countries have fewer.

So, this isn’t a situation where one country can repell Russia alone.

We are very grateful for Europe’s support, Zelenskyy pledges.

But, he warns, Europe must learn to fully take care of itself.

That must inclue a United European security and defence policy, Zelenskyy says, and all countries must be willing to spend as much as is needed, rather than just what they have got used to.

If it costs 5% of GDP on defence, so be it, he says.

He adds that Europe needs its own version of the Iron Dome, which can repell any threats, he says (a nod to Israel’s defense system)

Updated

Zelenskyy: US are an indispensible ally, but what will Trump do?

Volodymyr Zelenskyy is now addressing Davos, about the future of Europe, and urging leaders to take steps to remain relevent in the current geopolitical situation.

The Ukranian president says all eyes are on Washington. But who is actually watching Europe at the moment?

20 hours ago, he reminds delegates, Donald Trump was inaugurated, everyone is waiting to see what he does next.

Trump’s early executive orders have shown his priorities, Zelenskyy points out, now people are watching to see how he will end wars (as he pledged during the election campaign).

It is clear that the US are an indispensible ally, Zelenskyy says.

But he warns that an official under the Biden administration had explained that America’s priorities were the Pacific, the Middle East, and then Europe third.

Will President Trump even notice Europe? Will he see Nato as necessary, and will he respect international institutions, Zelenskyy asks.

He is insisting that Europe must establish itself as a strong global player, an indisensible player.

He cautions Davos delegates that there is no ocean separating Europe from Russia.

And Europe should remember that battles involving North Korean soldiers are taking place closer to Davos than Pyongyang, he adds.

Turning to recent deals signed by Putin with his allies, Zelenskyy says they are deals against Ukraine, against Europe, and against US.

Updated

Scholz: Freedom of speech does not cover support for extreme right

Olaf Scholz is then asked about Elon Musk, who appeared to give back-to-back fascist-style salutes yesterday, during celebrations of the presidential inauguration of Donald Trump.

Scholz replies that there is freedom of speech in Europe and in Germany, so anyone can say what he wants, even if he’s a billionaire.

However, he says sternly, we do not accept freedom of speech if it is supporting extreme-right positions.

Updated

Looking across the Atlantic, chancellor Scholz says we need to show “cool heads” in a world that sometimes “seems to teeter on the brink of a nervous breakdown”.

Not every tweet should trigger a debate, he says.

And he pledges to work with the Trump administration, saying:

The US are our closest ally outside of Europe. and I will do everything to ensure it stays like that, as it is in our mutual interest.

And more broadly, Scholz says Europe must become more competitive, to tackle the rise of serious competitors in all parts of the world.

He says:

If we want to preserve our prosperity, we need to keep our technological edge.

Updated

Scholz addresses Davos, says Putin must not win

Olaf Scholz, Federal Chancellor of Germany, is addressing the World Economic Forum now.

Scholz has taken a break from campaigning in the German election to visit Davos.

He begins by reminding delegates that the path to prosperity leads through strong and stable institutions.

He hit out at “black and white thinking” that promises simple solutions, but cannot deliver them.

Scholz says the world needs clarity and steadfastness, particularly on peace and security. We must protect the international order, he says, and the most important element of that order is the inviolability of national borders.

This is why President Putin must not be successful in the war he has launched against Ukraine, Scholz says.

And Scholz points out that Putin’s hopes of keeping Ukraine away from Europe, of avoiding a stronger NATO, and installing a pro-Russian puppet regime in Kviv have failed.

Ukraine is a EU candidate, he points out, Nato has grown, and the Ukraine government stands stronger than ever before.

The Ukrainian army is bigger and stronger than before the war, equipt with Western weapons, Scholz points out.

He gives much of the credit for this to the strength of Ukrainian people, but also points to international support.

And on the issue of possible peace talks, he says:

The Ukrainian people must have the last say about how the war ends.

Cryptocurrency supporters at Davos are optimistic about their prospects under Donald Trump’s second presidential term.

Speaking on a panel here in Davos, Coinbase CEO Brian Armstrong said crypto had faced a “hostile environment” under the previous administration, which will now change.

The new administration should make it easier to agree a path to agree new rules for treatment of crypto, he says.

According to Armstrong, crypto is still “in its infancy”, as only half the companies on the Fortune 500 have conducted a crypto trial.

He cites crypto’s payment growth, and the rise in crypto EFTs, but insists that “the Trump effect cannot be denied” – and probably drove Bitcoin to its record high yesterday.

Armstrong says:

To have the leader of the largest country come out and say he wants to be the first crypto president… this is unprecedented. It’s hard to deny it has had an effect.

Financier Anthony Scaramucci (who briefly served as Trump’s Communications Director in his first term) predicts that Paul Atkins, who has been nominated as the next chair of the US Securities and Exchange Commission, would go back to “an old-school framework which will be beneficial for the industry”.

Previously, Scaramucci says, crypto firms were “shooting in the dark’ when tackling regulation.

Scaramucci also claims that US senator Elizabeth Warren, and former SEC chair Gary Gensler had helped the Democrats lose the presidency, the house and the senate last November, through their concerns about crypto.

Scaramucci says he is very hopeful and optimistic about crypto’s prospects.

“This industry is here to stay, and there are companies who are going to accelerate…and unleash uncredible amounts of innovation.

But… South Africa’s central bank governor, Lesetja Kganyago, warns that crypto needs global rules that are clear and transparent.

Kganyago warns against allowing regulation to be set by the power of money.

If an industry decides to use money to knock one candidate out, or another one in, ‘that to me is regulatory capture,” he adds.

Updated

Away from Davos, Boohoo shareholders have backed the group’s founder and executive vice chair Mahmud Kamani in the latest blow to Sports Direct founder Mike Ashley’s attempt to control the struggling online fashion retailer.

Investors representing 63% of Bohoo’s stock voted to back Kamani or 99% if the vote of Ashley’s Frasers Group were excluded.

Frasers called the meeting in an attempt to oust Kamani who Ashley has said is an “egotistical founder who has an unhealthy grip on the board”.

Donald Trump’s decision to pull the US out of the Paris climate agreement, again, is a “very, very” destructive move, union leader Christy Hoffman tells us here in Davos.

Hoffman, general secretary of the UNI Global Union, fears it could undermine such international agreements.

She says:

Let’s see what other multilateral agreements he pulls out of. But that’s a serious step to encourage other countries to not take it seriously.

That’s a very, very destructive thing to do.

What signal does that send to the rest of the world about agreements like this?

China's vice-premier warns: no winners in trade war

Ding Xuexiang, vice-premier of the People’s Republic of China, has defended globalisation in a speech at Davos today.

Ding insisted that economic globalisation is not a “you lose, I win zero sum game”, but a universally beneficial process.

Touching on the threat of a trade conflict with the US, Ding says:

Admittedly, economic globalisation will bring some tensions and disagreements on distribution.

These issues can only be resolved in the process of promoting economic globalisation.

Protectionism leads nowhere. Trade war has no winners.

Greenpeace aren’t the only group protesting against the super-rich at Davos.

Last week the Fight Inequality Alliance projected the message: “TAX THE SUPER RICH!” onto a mountainside near a private airport near Davos, next to the faces of Donald Trump, Elon Musk, and Mark Zuckerberg

Another image declared: “LET’S DRAW THE RED LINE & STOP PAYING BILLIONAIRES’ TAX BILL!”

Jenny Ricks, general secretary of the Fight Inequality Alliance, says:

“We’re done watching another ski resort gathering of the 1% as the wealth of the richest continues to rise to grotesque levels.

Oxfam’s new report predicts there will be 5 trillionaires within a decade unless we heed the call to change course.

Meanwhile, people are losing their homes to climate disasters and struggling to cover their basic needs.”

Von der Leyen: must work together to avoid global race to the bottom

European Commission president Ursula von der Leyen has used her speech at Davos to urge EU countries to work more closely together, in the face of the fragmenting global economy.

“The cooperative world order we imagined 25 years ago has not turned into reality. Instead we have entered a new era of harsh geostrategic competition,” she told the World Economic Forum.

“We will need to work together to avoid a global race to the bottom.”

Responding to ex-ECB president Mario Draghi’s report on competitiveness last year, she said the Commission will soon propose new policies in three key areas - deepening capital markets integration; allowing big companies to work across the EU under a single set of rules; and creating an “energy union”.

“It is time to complete our energy union so that clean power can run freely across our continent .”

In what appeared to be a sideswipe at Donald Trump’s approach, Von Der Leyen said, “with Europe, what you see is what you get. We play by the rules. Our deals have no strings attached.” She said her new Commission would make its first foreign trip to India.

Von der Leyen also stressed the close trade and economic connections between the EU and the US, however, saying the EU would engage early with the new administration.

She said:

“We will be pragmatic, but we will always stand by our principles. We will protect our interests and uphold our values, because that is the European way.”

Updated

Greenpeace hold WEF protest to tax the super-rich

There’s drama inside the Congress Centre here at Davos, where two Greenpeace International activists have held a protest calling for wealth taxes.

Two Greenpeace activists unveiled a banner reading “Tax the Super-rich! Fund a Just and Green Future”, above the main lobby near the WEF Congress Hall (where the big speeches take place).

Clara Thompson, Greenpeace spokesperson in Davos, explains:

“As the world faces increasing threats to democracy through the collusion of wealth and power, the urgency to tax the super-rich is ever increasing.

Having billionaires in positions of leadership, governing with impunity, is a stark reminder of the dangerous intersection of extreme wealth and politics, and its impact on democracy, people and the planet.”

The security here at WEF is pretty tight – you need to be registered to get in, and delegates go through airpost-style scanners at the entrance points. So this is quite a coup by Greenpeace.

Updated

A majority of Davos delegates at a session on the US dollar reckon the greenback will still be the dominant reserve currency in 25 years, a quick poll showed.

That shows “a lot of optimism” that the world is going to still be together in one block in 25 years time, suggests finance professor Raghuram Rajan of the University of Chicago Booth School of Business.

Updated

David Beckham, who yesterday received a crystal award from WEF for his work with UNICEF, is speaking again this morning.

Beckham is talking about how his visits to countries such as Thailand, Nepal and India have opened his eyes to the situation facing vulnerable children.

It’s been “inspiring” meeting talented, driven girls around the world, Beckham says, warning many are being left behind because they don’t get equal access to education and healthcare.

Beckham says he’s focused on empowering girls to achieve their full potential, explaining:

“When you emplower a young girl, it uplifts them, their families and their communities.”

In a wide-ranging chat, Beckham also hailed King Charles as an “incredible man”, citing his grassroots works and his efforts bringing back lost arts [unfortunately for Becks, I don’t think the honours committee are here in Davos taking notes…]

Beckham also reveals he stand up everytime his wife Victoria leaves the table, as an example of the manners he’s tried to pass onto their children.

“I do get strange looks at times,” he admits.

Updated

Some CEOs are notably sanguine about Donald Trump’s return to the White House.

Mario Greco, CEO of Zurich Insurance, told CNBC this morning here in Davos:

I think so far, everything has been expected. His speech has been strong, maybe stronger than ever before. His will is clear. And let’s see next.

The world is in a transformation which is important and era setting, the digital transformation, AI, these are long term trends that are not going to change. Whoever runs any country.

But what about Trump’s decision to pull the US out of the Paris Accord? Isn’t that worrying for insurers, following the devastating fires in Los Angeles?

Greco says:

Look, I think we have to admit that the Paris Agreement has not delivered any of the plans, ambitions, targets that were expected. And it’s also true that we are looking for other means to achieve the reduction in the temperature that it’s badly needed. I mean that technology needs to help. Without technology, we’re not going to make this planet colder than it is today, or it’s going to be in soon. So no, I don’t think this is the big event, but it will be interesting.

I heard that he’s going to go next to Los Angeles. It’s interesting now to hear what he says and what he plans to do there, because that city needs, needs reshaping, needs restructuring.

Trump crypto meme coin has hints of kleptocracy

Donald Trump’s decision to launch a crypto meme coin last week is a sign that we have entered a new era, delegates here have heard.

Analyst Ian Bremmer says the move is “unprecedented”, and asks delegates to imagine the reaction if Indian prime minister Narendra Modi had taken such a mood.

Bremmer says:

If India were doing this, we’d say this was a kleptocracy.

[Reminder: The value of Trump’s coin soared in value after it was launched, only to reverse after a Melania coin was debuted]

On Trump’s crypto move, Harvard’s Graham Allison says:

“We are in a new world where that will be the new normal, for a while.”

Allison also compares the situation in the US today to the actions of the robber barrons – the wealthy, powerful and unethical businessmen of the 19th century.

He says questions about whether Elon Musk will use his influence to promote his companies miss an important point – it’s his feduciary duty to do just that!

Trump’s return to the White House is the biggest political comeback ever, says Graham Allison, Douglas Dillon Professor of Government at Harvard Kennedy School of Government.

Allison tells WEF:

“Trump has done something no person in the world has ever done before. A dead politician has risen”

Four years ago at Davos, Trump was dead and buried, Allison reminds delegates, adding:

“This is the biggest comeback in history, for a politician”

Trump’s new administration will come under inflationary pressure, warns Allison Schrager, senior fellow at The Manhattan Institute for Policy Research, but may also deliver higher growth,

A wide rollout of tariffs would lead to a move higher in the price level, Schrager points out

Another challengs will be higher bond yields, which mean the cost of borrowing will be higher.

Schrager is optimistic the new administration have a pro-growth plan, but predicts the deficit is going to go up too.

If Trump cuts corporation tax to 15%, that would be good for growth, she suggests – before pointing to the “vibe shift” in the US.

“There’s a feeling of positivity that is going to bring a lot of growth”

Updated

US -China relationship heading for 'dramatic shift' under Trump

Donald Trump is looming over delegates at the World Economic Forum in Davos today.

Ian Bremmer, president and founder of Eurasia Group, is predicting a “dramatic shift to the US-China relationship” in the next few months.

Bremmer tells WEF that he believes the US China relationship is the one where it will be most problematic to get a deal.

He predicts we are heading towards a trade war, and a more strategic decoupling of the two economies.

“China’s complicated,” Bremmer points out, saying that the only way US-China relations were stabilised recently was due to a large number of bilateral meeting between the two sides.

Bremmer says Trump wants to meet Xi, flatter him, and get a deal…but it wil be hard to get a deal that works for all in his administration, and which will please Congress.

Reeves heads to Davos on investment push

Chancellor Rachel Reeves is heading to the World Economic Forum meeting in Davos later today in a push to win new investment for the UK economy.

Reeves will be emphasising the UK’s political and economic stability and promoting the government as pro-business.

She is expected to meet business leaders including the JPMorgan Chase chief executive, Jamie Dimon, Goldman Sachs boss David Solomon, and Jo Taylor, president of giant Canadian pensions fund the Ontario Teachers’ Pension Plan.

Reeves said:

“Business leaders and investors need to know that the UK is where their businesses will flourish, so I’m meeting them face to face in Davos to make our case.”

Introduction

Good morning from Davos, where the first full day of the World Economic Forum is getting underway.

We’ll hear from a slew of global leaders, as the world digests the inauguration of Donald Trump yesterday, and the flurry of executive orders from the White House.

That includes Ding Xuexiang, Vice-Premier of China, where there may be relief that Trump has declined to flesh out his plans for taxing Chinese imports.

But while the much-feared trade war hasn’t kicked off, yet anyway, there’s anxiety over what the next few years will bring – with escalating armed conflict seen as the biggest risk facing the world economy.

Karen Harris, managing director of Bain & Company’s Macro Trends Group, points out that the last five years have been the most “macro-economically shocking in modern history”, starting with the Covid-19 pandemic and followed by the inflation shock.

Harris adds:

“As business and political leaders gather in Davos in 2025, one key question dominates: Will this tumultuous five-year period end with a gentle return to normal?

“The data suggests so. The IMF projects 2024 global growth at 3.2%, slightly below the 2010–2019 median of 3.5%, with 2025 growth at 3.3%. To our 2019 selves, these numbers might imply normalcy: the US and China driving growth, Europe sluggish, global output steady at 3–3.5%.

“Yet beneath these numbers sits fragility: alarming unemployment change in the US, deflation in China, stagnation in Europe, and a high degree of equity market concentration**.

“Additionally, the change of US administration also challenges this narrative. A focus on reducing trade deficits, primarily affecting China but also Europe, could disrupt the US’s role as a major provider of global demand. If the US undergoes such structural shifts, the EU could face intense competition with China for export market share. This complicates the notion of a back-to-normal soft landing. Instead, normal will be continued uncertainty.”

The agenda

  • 8.15am CET / 7.15am GMT: A session on ‘47th US Presidency Early Thoughts’

  • 9.30am CET / 8.30am GMT: Conversation with David Beckham

  • 9.30am CET / 8.30am GMT: Session on the US Dollar

  • 10.50am CET / 9.50am GMT: Special Address by Ursula von der Leyen, President of the European Commission

  • 11.20am CET /10.20am GMT: Special Address by Ding Xuexiang, Vice-Premier of the People’s Republic of China

  • 1pm CET / noon GMT: A session on crypto

  • 2pm CET / 1pm GMT: Special Address by Olaf Scholz, Federal Chancellor of Germany

  • 2.30pm CET / 1.30pm GMT: Special Address by Volodymyr Zelenskyy, President of Ukraine

  • 3pm CET / 2pm GMT: Special Address by Cyril Ramaphosa, President of South Africa

  • 5pm CET/ 4pm GMT: A Conversation with Isaac Herzog, President of Israel

 

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