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EUROPEAN MIDDAY BRIEFING - Stocks & Oil Sink as -2-

06/23/2022 | 05:35am EDT

Italy's Banca Monte dei Paschi di Siena SpA said Thursday that it would raise up to 2.5 billion euros ($2.64 billion), slash thousands of jobs and close dozens of branches as part of its multiyear plan to revamp its balance sheet, turning a page on a chapter that saw the lender undergo state recapitalization and the disposal of billions in bad loans.

The world's oldest bank said that it would aim to cut roughly 4,000 jobs through a voluntary exit scheme, a move Monte dei Paschi expects will create EUR270 million in savings a year from 2023 against one-off restructuring costs of about EUR800 million. It will also close some 150 branches, bringing its network to just over 1,200 branches.

France's Emmanuel Macron Calls for Compromise After Losing Majority in Parliament

PARIS-French President Emmanuel Macron said Wednesday he was ready to work with other parties to form a new coalition, after losing his majority in the French Parliament in elections this week.

The French leader said he was open to building an alliance with other political parties to form a new parliamentary majority. His party could also strike agreements with other political parties on individual bills.

Polio Virus Found in London Sewage Puts U.K. on High Alert

Polio has been detected in London's wastewater system, U.K. health authorities said, putting clinics on high alert for an infectious disease that hasn't been recorded in Britain for nearly four decades.

The U.K. Health Security Agency raised the alarm on Wednesday after it found several closely related polioviruses in sewage samples taken from a treatment facility in east London between February and May. That pattern of detection suggests that a form of the virus has been spreading locally, the agency said.

Rolls-Royce Offers $2,500 Payment to Workers as Inflation Bites

LONDON-Rolls-Royce Holdings PLC is offering U.K. staff a one-time payment of GBP2,000, equivalent to about $2,450, hoping the bonus will help ease pressure from union officials and employees over rising inflation while keeping a lid on the jet-engine maker's costs ahead of an uncertain economic future.

The move is one of many approaches companies are taking to address soaring inflation that has unions and workers in many parts of the world demanding higher pay. For months, private companies have been boosting salaries and wages and offering signing or retention bonuses, amid exploding post-lockdown demand and super-tight labor markets. More recently, surging prices for items from food to fuel have weighed on workers' buying power, pressuring employers to boost pay to make up the shortfall.

Farmers Stick With Bayer's Roundup, Undeterred by Supreme Court Decision

The U.S. Supreme Court this week denied an effort by Bayer AG to stem thousands of lawsuits alleging its Roundup weedkiller caused cancer among landscapers and residential gardeners. On Alan Meadows's Tennessee farm, it was business as usual.

As the top U.S. court declined Tuesday to hear Bayer's appeal of a 2018 jury verdict linking the company's herbicide to non-Hodgkin lymphoma in a California plaintiff, Mr. Meadows said he was spraying the chemical on his own 4,000-acre farm, which he said he has done since the 1990s.

U.S. Gains in Push for Exception to EU Sanctions on Russian Oil

A U.S. push to pare back one of the European Union's sanctions on Russian oil has tentatively started to gain traction within the 27-member bloc, with officials weighing whether to allow insurers to cover shipments of Russian oil if the price the oil will sell for falls under a cap.

After weeks of infighting, the EU in early June approved a ban on insuring shipments of Russian oil alongside a ban on imports of Russian oil that is set to go into effect this later year. Because many shipments of Russian oil are insured in the EU and U.K., Treasury Secretary Janet Yellen has repeatedly said she is concerned that the EU's plans could take Russian oil off the global market and further drive up prices.

European Parliament Backs Broader Carbon Border Tax

The European Parliament approved legislation to tax imports based on the greenhouse gases emitted to make them, a plan that is sending shudders through the global trading system.

The legislation backed by the parliament on Wednesday broadens a previous proposal for the tariff to include some chemical makers. It also sets a faster timeline for implementation than the earlier proposal, which was drafted by the European Commission, the European Union's executive arm.


Fed Chair Jerome Powell Says Higher Interest Rates Could Cause a Recession

Federal Reserve Chairman Jerome Powell said the central bank's battle against inflation could lead it to raise interest rates high enough to cause a recession, offering his most explicit warning this year.

"It's not our intended outcome at all, but it's certainly a possibility, " Mr. Powell said Wednesday during the first of two days of congressional hearings. "We are not trying to provoke and do not think we will need to provoke a recession, but we do think it's absolutely essential" to bring down inflation, which is running at a 40-year high.

Congress Unlikely to Heed Biden's Call for Three-Month Suspension of Gas Tax

President Biden called for a three-month suspension of federal gasoline and diesel taxes-a move that is unlikely to have the support needed to pass in Congress and one economists and business leaders say would do little to address record-high gas prices.

"I fully understand that the gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief," Mr. Biden said at the White House on Wednesday. "Just a little bit of breathing room."

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

06-23-22 0534ET

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